In early 2019, WeWork seemed poised to take over the world. Described as “the next Alibaba,” the coworking unicorn startup was valued at $47 billion and gearing up for a highly anticipated initial public offering.
But as stories of poor executive judgement and a hard-partying corporate culture began to leak,1 the company came under so much public scrutiny that it was ultimately forced to pull its IPO filing. By September 2019, WeWork’s CEO resigned, and the company’s valuation had plummeted to $8 billion.
Culture matters today more than ever. The benefits of a great culture—increased profitability, better-performing employees and happier customers—are proven to lead to higher long-run stock prices.2 As the WeWork story shows, the costs of a bad culture, especially when made public, can be catastrophic.
But while every CEO and CHRO knows that culture should be a priority, they often struggle to create the type of robust, motivated and adaptable workforce that helps them stay ahead of the increasing pace of change.
The insights and data in this article are drawn from my direct experiences working within the criminal justice system, several tech and software companies, and now as a Partner Happiness Executive at Humu. In my initial conversations with executives of large organizations, the most common issue that comes up is how to build—and reinforce—a strong, unified culture, while still granting employees enough flexibility to prepare for and quickly respond to large-scale shifts.
At Humu, our solution is to use tiny interventions called nudges to empower every employee to build better habits, work smarter and connect with their colleagues. Our approach is proven to increase productivity as much as 10 percent over six months and lift retention 8 to 12 percent. Based on our work, and on my experiences, here are three ways any leader can work towards creating an adaptive culture.
1. Avoid over-indexing on structure.
Structure is critical to steering large, diverse organizations. Employees need a broader plan and clear roles and responsibilities to make progress and collaborate effectively. But too often, leadership leans so heavily on establishing—and clinging to—strict structures and systems that they stifle innovation. Without providing opportunities for employees to experiment and learn, organizations prevent their people from thinking creatively and risk losing their competitive edge.
The Dangers of Too Much Structure
I started my career in the detective bureau at the Davenport police department. My role involved processing arrests and observing interrogations, which meant I often worked with repeat offenders. I was shocked at how many had been model inmates in prison. In an environment where they were told when to eat, sleep, exercise and take a shower, they seemed to thrive and be on track to turn their lives around. But once they were released, they would struggle to adjust to their newfound freedom and end up back in the system a few months later.
It became clear to me that even though these individuals often had the best of intentions, they hadn’t been prepared to enter a world that required them to think and act for themselves. Their ability to follow rules without question helped them in prison, but became counterproductive when they stepped outside of that environment.
If norms dictate that there is only one “correct” way for employees to act, those same individuals will have a hard time responding to change by innovating or doing things differently.
The same problem exists in large organizations that enforce rigid rules and processes. Researchers at MIT found that though a strong culture is usually associated with higher performance reliability, during times of disruption or change, strong cultures lead to lower performance reliability.3 This makes intuitive sense: if norms dictate that there is only one “correct” way for employees to act, those same individuals will have a hard time responding to change by innovating or doing things differently.
The second pitfall of over-indexing on structure is that it’s impossible to create a process or system that works for everyone. People are intensely complicated. Whether you’re the leader of a small organization or an enterprise with hundreds of thousands of employees, you have no way of knowing what specific actions each manager should take in a given moment to make their team effective.
People also differ in how much autonomy they prefer. At Humu, we encourage managers to learn their reports’ individual preferences. Leaders who have ongoing conversations to learn where their team members might want more guidance, and where they want to and feel capable of using their judgment, can better offer the type of support that will help their people succeed.
2. Provide autonomy where it makes sense.
The executives I speak with often know there are benefits to raising employees’ voice and offering ample opportunities for their people to learn and grow, but worry that relaxing things too much will lead to chaos. Their concerns are not unfounded. It is entirely possible to over-index on autonomy.
In contrast to high levels of structure within the criminal justice system, healthcare organizations or call centers, many companies over-index on autonomy so much that employees are left feeling unmoored and unmotivated. I’ve heard employees say things like, “It doesn’t matter, everything will be different in 6 months anyway.” These frequent changes can impede customer delivery, as clients are handed back and forth between team members so often that it begins to impact the quality of the work and the relationships.
The Three Components of Autonomy
The key to creating an adaptive culture is to strike the right balance between structure and autonomy. At Humu, we quantify—and help our customers nudge people towards—behaviors that support an environment in which people are given enough direction to move forward, and enough leeway to do so in novel and maximally effective ways.
Our research shows that autonomy comes from three places:
- actual autonomy,
- how you interact with your peers, and
- how you think about your work.
Organizations often think their only option is the first one, which can be hard to grant, especially in environments that require a lot of structure (e.g., retail, or an operating room where specific procedures must be followed for safety reasons). The best leaders don’t forget to focus on the second and third.
Change Interactions and Mindsets
How do you help employees better work together or view their work differently? This was what one of our customers, a large financial institution that was struggling to create a better culture in its call centers, wanted to know. Leadership was open to the idea that more freedom would benefit their employees, but weren’t sure how to build autonomy into such a structured environment.
The key to creating an adaptive culture is to balance structure and autonomy to create an environment with enough direction to move forward and enough leeway to do so in novel ways.
What’s remarkable is that when you drill into the three components of autonomy, you find they are rooted in specific behaviors that can be changed with minimal effort, at every level of an organization. In fact, the smallest interventions often have the biggest impact. When Wharton Professor Adam Grant arranged for workers at the university’s scholarship fundraising call center to meet with scholarship recipients for a few minutes, he found that helping people better understand how their work positively impacts others doubled their productivity.4
We applied the same principles to help employees within the call centers. Over the next six months, we nudged everyone to make tiny changes that we knew, based on academic research, would help them better work together and reframe how they thought about their work. For example, we encouraged managers to start small by giving team members a choice whenever possible, prompted individual contributors to reflect on calls that went really well and to write down one successful strategy they could use again and even share with their colleagues.
By helping employees embrace mindset shifts and find small ways to increase their autonomy in a very structured environment, we were able to drive productivity up by 8 percent over six months.
3. Drive lasting behavior change.
Of course, it’s one thing to understand the types of behaviors that lead to an adaptive culture, and another to actually motivate people to take action. Behavior change is hard: more than half of New Year’s resolutions fail by January 31.5 And if the majority of people fail to achieve goals they set for themselves (almost three-fourths of New Year’s resolutions are about losing weight, and it seems safe to assume people do really want to become healthier6), it’s not hard to imagine that motivating them to change their behavior in a work setting is even harder.
I also have a deeply personal relationship with the difficulties of driving lasting behavior change. As a child, I watched my parents struggle with severe addictions. At times they lived in shelters or were even homeless, and my siblings and I were eventually put into foster care. Throughout each up and down, I found myself fixated on how to change the behavior of my parents.
Individual Change Relies on Environment,
The key to driving a lasting culture shift, according to behavioral scientists, is to change the entire environment. The Framingham study, which measured the health of roughly 5,000 people over 70 years, showed that the best way to get someone to quit smoking is to have them spend more time with nonsmokers. In other words, it’s to change the environment in which they operate.7
This is also why most existing learning and development initiatives fail.8 In the traditional workplace, employees often leave training or an all-hands meeting feeling inspired, but when they go back to their day-to-day, everything is the same. Their behavior doesn’t change because there’s nothing reinforcing new habits.
The key to driving a lasting culture shift is to change the environment. The idea is that people don’t feel alone in driving change, and that new behaviors are rewarded and positively reinforced.
In the call center, we didn’t ask one manager or one individual to take action. We nudged every single person, including leadership at the company, to start doing things a little differently. The idea is that people don’t feel alone in driving change, and that new behaviors are rewarded and positively reinforced. The result is that people who receive nudges take action on the things they ought to do about 250 percent more frequently than those who don’t. This leads to all kinds of beneficial outcomes: employees are happier, more productive and motivated to create great experiences for customers.
General Best Practices
My recommendations below focus on how any leader can start to create an environment in which goal clarity and flexibility coexist. The key to creating an adaptive culture is not to immediately implement all seven, but to carefully consider—and then start acting on—what’s viable within your unique organization.
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Tie day-to-day work back to the bigger picture. Highlight how work by the team or organization helps people, which often causes people to experience their work as more meaningful. You can facilitate this by connecting team members with the beneficiaries of their work or by sharing customer stories.
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Champion a growth mindset. At every opportunity, underscore that skills are learnable, and not based solely on innate talent—which has wide-ranging benefits, including employees who are more empowered and committed to the organization.
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Give people the tools—and freedom—to job craft. Encourage things like job shadowing/rotation to boost relational job learning (i.e., increased understanding about the interdependence or connectedness of one’s job to others) and to help employees explore interest in different roles.
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Give feedback, rather than instruction. Outline a clear goal, but instead of providing detailed direction, let employees direct their own work (within given parameters) and make yourself available for feedback or for answering questions when they need.
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Encourage inclusive behaviors. In your next team meeting, share why it is important to you personally that all employees are treated fairly. Call on everyone to take an active role in boosting inclusion to increase the likelihood that majority group members step in to improve workplace equality.
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Make sure employees feel heard and considered. Show that speaking up in a respectful and productive way is always welcome, even when it challenges existing beliefs or decisions. Make it clear you are receptive by following up on suggestions, letting people know when ideas have results in positive change, and avoiding retaliation.
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Provide as much personalized support as you can. This is admittedly hard to do without technology, but at Humu, we consistently see that the tiniest of interventions, delivered to the right person at the time when it’s easiest to act, set up entire organizations to be more resilient and better positioned to face the challenges of the day.
Any workplace can benefit from putting structure into place while still giving employees as much autonomy as possible. The recommendations above might seem small, or even simple, but they can unlock your teams’ full potential—and help you create an adaptive culture that will keep your people working for you (and growing with you) even as the tides of the labor market shift, or as the skills you ask them to develop change over time.
Stephanie Crouppen is Partner Happiness Executive and the commercial lead for Diversity & Inclusion at Humu. She can be reached at stephanie@humu.com.
References
2 Alex Edmans, “28 Years of Stock Market Data Shows a Link Between Employee Satisfaction and Long-Term Value.”
Harvard Business Review. 2016.