On April 28th we hosted our annual Great Starts Breakfast Series. There was a full room of CEO’s, CFO’s, CHRO’s, VP’s, Director’s and others engaging in a fascinating discussion centered around culture, which is a “hot button” in many of the organizations we work with.
Who better to help us facilitate a discussion on culture than Gustavo Grodnitzky, Ph.D., author of the book, Culture Trumps Everything.
Dr. Gustavo effectively built the case for social capitalism cultures, which deliver higher levels of performance compared to classic capitalism. The research on this performance improvement is impressive and is sited in numerous studies from groundbreaking research from the book, Firms of Endearment: How World Class Companies Profit from Passion and Purpose to the Dow Jones Index, S&P 500 and more.
Why does social capitalism deliver higher performance?
Social capitalism balances the needs of all stakeholders, including employees, not just shareholders. Companies that remain in the old model of “bottom line first” will not meet the demands of the employee today. The modern employee wants to be heard, engaged and inspired to build and learn. We are dealing with employees who expect all aspects of the Happiness Paradox to be fulfilled (Pleasure, Engagement, Relationships, Meaning, and Accomplishment).
Can this be proven with data?
For those “data driven” leaders, Dr. Gustavo effectively laid out the profit paradox, which he considers “the money slide” of his presentation, to convince your C-level team that social capitalism is a more profitable strategy. Data over the last 10 years shows that social capitalism has far greater profit margins than classic capitalism. The results are staggering. In January 2014, Social Capitalism companies had a profit percentage of close to 160% compared to the 45% that Classic Capitalism companies had.
Who has successfully demonstrated social capitalism and shown strong profits?
Companies’ small and large as well as inspired leaders are bringing passion and purpose to their cultures. A few examples include Zappos, Gravity, IDEO, Patagonia, TOMS Shoes and Starbucks.
Companies like WD-40, led by Garry Ridge, a purpose driven CEO, have created a highly engaged “tribal culture” of people who have a sense of belonging and commitment that is rare. Our client, Jet Propulsion Laboratories has clear purpose and energizes workers with unprecedented innovation and their “left field” lab embraces experimentation and learning from mistakes.
How do employees adapt to social capitalism?
Culture trumps psychology and biology (because culture trumps everything) – a fascinating concept that is compelling as you reflect on how the shift might be made to a more balanced social context.
Gustavo introduced Epigenetics which literally means "above" or "on top of" genetics. It refers to how these factors affect of the expression of our DNA, turning our genes off or on. Our cells react to our environment, how we live and how we manage stress. We create cultures that support or are toxic to human life. Our primary drive as humans is to connect to and understand others and belong (have a cause). How can you promote this in our work culture?
Gustavo challenged us to move away from individual attributions and begin to think about the impact of context on individuals. Introverts can behave just like extroverts in the right context. Low performers can perform well in the right context. In the same respect, extroverts can behave just like introverts within certain contexts. High performers can tank in certain contexts despite their success elsewhere.
Many people in the room resonated with the Trust model presented. Experience over Risk equals Trust. We were asked to write down the names of three people you trusted and three you didn’t.
Is this trust exercise important?
(The answer is yes.)
Those we trust display Reliability, Openness, Competence, and Concern. Those we don’t trust either all share the same absent behavior or a variety. If they share the same absent behavior, you may have a hot button. A hot button suggests you may over-emphasize a certain attribute when evaluating your trust in others. If you look at the list and don’t find one or all of the four components are particularly valuable to build trust, you may have a blind spot. Blind spots suggest you have under-emphasized a quality essential for trust and this blind spot may create an obstacle when you are trying to have others trust you.
What can you do now to impact my organization?
Given that the primary drivers of connectedness are relationships and cause, you want to ask your employees a few questions to help to move closer to cultivating the culture your leaders’ value and believe in. Start by asking your leaders and employees how they define your cause? Do they define it in the same way?
Our Thoughts…
As Gustavo says, “Culture is a garden”. The garden requires time and a bit of work, but can grow some beautiful flowers and profitable produce! (What Gustavo calls “Quintessence”).
New models of business and culture are being created and led by inspiring Orange County CEO’s. There are new “playbooks” that help people and business thrive. Game changing companies are mavericks of culture. Are you creating a work environment that supports your purpose and empowers your employees so that everyone enjoys success? Why not go for it - let us know about your journey.