Creating Rewarding Business Cultures

Xactly Media
Xactly Media
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The Xactly Media team closely follows the latest trends in Sales, Finance and Incentive Compensation Management to bring you newsworthy perspectives and actionable insights to drive your business success.

Xactly is big on motivation and, most importantly, getting motivation right. That’s why we are excited to have Adrian Gostick, coauthor with Chester Elton of the New York Times bestseller The Carrot Principle, speak with us and our user conference CompCloud.

Gostick and Elton’s newest work, All In, delves into a groundbreaking 300,000-person study to uncover what makes successful business cultures.  They’ve been featured on the Today Show, in the Economist and beyond.  They’ve also founded a global training and consulting firm, The Culture Works.

Now, here’s what Gostick had to say about motivation and the successful work cultures that engender it in a recent interview with Xactly.

Why did you start looking into motivation?

Chester, my coauthor, and I were working for a consulting company. Chester was doing some really innovative stuff with Johnson and Johnson and some other companies. And we wanted a way to take some of the things that we had learned about employee motivation and put them out there for people to use. That’s when we came out with The Carrot Principle.

We’ve branched out to team motivation with the Orange Revolution.

This latest book, All In, was really motivated by our clients. It was something they wanted.

You can add a lot of thank-yous to environment but it doesn’t always work. That’s because if the culture doesn’t work than nothing works.

How do you know if a company has a broken culture?

For the book All In we had unprecedented access to a 300,000-person study from Towers Watson. This was recent data, surveys done during the recession on what great cultures did.

There are a lot of cues that you’ve found a lousy culture.

Often times, there is backstabbing and idea stealing going on.

Dysfunctional cultures often have a very strong emphasis on short-term results and not on long-term goals.

You’ll find that employees don’t know what is going on and people aren’t celebrated for their successes.

One of the biggest cues is that good people are leaving.

When good people leave that is obviously a problem. What other sorts of business problems do companies with broken cultures have?

What we found in the research is that those dysfunctional cultures have lots of problems. In fact, those companies with dysfunctional cultures have lower customer satisfaction scores.

If your employees don’t believe in the culture then that is going to translate to your customers.

So many companies say, “Our first priority is our customers.” But smart organizations focus first on their people.

So happy employees make happy customers?

It’s not just happy employees. It is very hard to get a CEO’s head nodding about happy.

They are looking for employees who are engaged, energized, who care and who are enabled.

So dysfunctional cultures are long-term problems, they increase turnover and reduce customer satisfaction. That will get a CEO’s attention. How can a dysfunctional culture be fixed?

From the research, we found 7 characteristics that were common in the companies with the best cultures according to employees.

1) Companies with the best cultures define their “burning platform.” By that I mean they see the threats on the horizon.

2) They create a customer focus. This is different than putting customers first. This means that each person has an idea of who their customers are and what their customers needs.

3) Then we develop agility. In this economy agility has become important. If you think of the burning platform as watching out for threats, agility is its corollary. It’s anticipating opportunities that are coming down the road.

We want to work where we are able to respond and anticipate changes.

We heard from employees: “I’m doing the work of two people. I have my head down trying to get the job done. I sure hope my leaders are looking to the future because I can’t.”

4) In the great cultures that we studied there was a “share everything” policy. We found open communications and high levels of trust.

I can imagine that it would be hard to trust your leaders are looking to future while you are wearing two hats if they aren’t communicating well.

Yes. All of these pieces do go together. It is amazing how many cultures we go to into that handle information on a need-to-know basis. And, too often, it turns out that they don’t think people ever need to know.

5) Step five is a new idea, too. A lot of managers aren’t sure about this one. But it is simple and important. You have to partner with your talent. The days of the autocratic rule are long gone.

Our people have has much expertise in their areas as we do in ours. In the very best organizations there was higher levels of growth. They found opportunities and ways to bring out the best ideas from people.

This means they feel a connection to the business. They are invested.

6) We root for each other. Every good culture we studied had higher levels of camaraderie and very low levels of those feelings of backstabbing and idea stealing that I talked about earlier.

A lot of people say they don’t want to single people out for recognition. But those bad things do evaporate when you make sure we do recognize success.

7) The final common characteristic we found was clear accountability. It can’t be all warm and fuzzy.

And it’s not really just a strong level of accountability. In the good environments that we studied, accountability was a positive thing.

In some environments when the boss says,  “Give me minute of your time,” people are terrified. But where accountability was positive it was different.

They knew if they hit their goal they would be recognized. In those environments people thought: “I have goals. My boss is aware of them. I know how to accomplish them.”

If a company wants to put these in place, what sort of rewards or incentives should they look to in order to make that happen? We are big on incentives around here.

That’s an interesting question. What we found in the research is there are two types of recognitions.

One is top down. That is so important. It shows that as managers, we are paying attention.

We also found a heavy preponderance of peer-to-peer recognitions in some of the best cultures that we studied.

For example we worked with Zappos, the online shoe retailer. They have seven formal recognition programs. Six of them are peer-to-peer. They are doing things every single day to recognize each other. We went to American Express where they basically stopped the production floor every single day to celebrate someone.

It’s amazing what these programs can do for companies.

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Want to learn more? See Gostick speak at CompCloud, check out the books he and Elton have co-written or visit his website www.adriangostick.com


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Creating Rewarding Business Cultures

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