THE IMPORTANCE OF DEFINING AND ALIGNING CULTURE
Sendero Analysts Katie Schreiber and Scott Simari recently sat down for a Q&A session with Sendero CEO & Founding Partner Bret Farrar to discuss the importance of values, the hidden dangers of employee engagement programs, and how to create sustainable company culture.
Scott Simari, Analyst: You founded Sendero over 13 years ago as a company focused on core values. Why do you feel values are so important?
Bret Farrar, Founding Partner & CEO: Values are important because they set the framework for the business. They undergird everything about your business.
Scott: Once you’ve defined your values, what’s the next step?
Bret: The thing about values is on the surface they are only stated – you write them down and say “these are our values” – but values are internal. You can’t look at someone and know what their values are. What you can see are behaviors, which are an external manifestation of internal values. Behaviors define how you interact and how you work.
It is important to articulate values that define a set of behaviors commonly encountered in your business. Those behaviors will serve as a set of expectations for everyone in your company about what is acceptable. Truly great companies start with why they exist – then “what they do” and “how they do it” serve as proof for their “why.” The goal is for the “what” – your business’s reason for existence – and the “how” – your core values and behaviors – to align seamlessly. When these elements align, it creates a great experience.
Scott: Sendero has the alignment of “what” and “how” down. What are some things companies can do to ensure alignment?
Bret: Alignment starts from behaviors at the top. If all you do is state your values and do nothing more, they ring hollow. It is important that senior leaders in an organization take ownership of this area and weave the behaviors into everything their company does – from performance management, to recruiting, to assessing client satisfaction, and more.
You show what you value through a variety of activities, whether that’s your meeting cadence and what is discussed, or what you measure your employees on. Expressions of gratitude by our employees on our company’s All Hands Calls is a weekly behavior that shows something that we value as an organization – gratitude and recognizing the work others are doing. Each time we plan for the coming year, we evaluate each recurring meeting in the leadership cadence to make sure we reflect and amplify what we believe and what we value. There are so many other things, but those examples give you an idea how to create alignment.
Katie Schreiber, Analyst: We are going to switch gears and talk about the balance between business and culture. Do you feel culture should reflect your business? If so, why?
Bret: I am a big proponent that business and culture do not stand alone, they work best interwoven. So, I actually believe it goes both ways – culture should reflect business and business should reflect culture. People have a risky tendency to think culture is just about employee engagement, so they develop employee engagement programs. But when you see employee engagement or culture as the focus of the year or flavor of the week, there is a danger of creating something that doesn’t mean much and doesn’t last. You run the risk of creating a program that, as they say, is like ‘putting lipstick on a pig.’ In my opinion, you don’t build a business then later ask, “How do we apply culture?”. To create something that is sustainable and lasting, you build culture as you build the business. They go hand in hand.
Katie: Once you’ve built that culture, how do you ensure that it has staying power?
Bret: I believe you have to measure culture results as much as you measure business results. For performance management at Sendero, we measure business and culture results equally. This is important for multiple reasons: one is that you need to have the balance of doing business correctly, but also going about it in the right ways; another is that I believe that you have to measure what you value. It is always tempting to measure just the business side because it is easy to quantify – you can use revenue, profitability, and other metrics. The problem is that if you only study business-side metrics, people perceive that as all you care about, all you value. When you balance and make sure you are not only doing the business correctly, but also doing it in the right ways, you can be assured you are doing the right thing.
Katie: We know you have a personality so energetic it needs no caffeine. What is exciting you right now?
Bret: I am most excited about my son’s progress in soccer. I have been teaching him how to juggle and when he started, he could only use his right foot and didn’t have much control of the ball. But after working everyday he is able to do 120 reps on his right foot and has broken or tied all his other records. He is seeing the progress and is excited about it, so it is exciting for me as well.
To watch more of the interview and learn more about Bret’s take on culture, how he found his purpose, and how he feels about Sendero’s recent Glassdoor award, click here.