Are You Sure You Have a Great Workplace Culture?

"Good" workplace cultures have good people but no stars.

Unlike great cultures, good ones can't keep game-changing team leaders (managers).

Lousy cultures have miserable managers everywhere -- even on the executive committee.

While "satisfied" employees can be found in both lousy and good cultures, satisfied employees don't provide innovation or entrepreneurism.

Most lousy-to-good cultures are well-meaning. God bless them for that. They just don't know what to do. So they do what is easy -- they deliver "satisfaction" to the troops. Latte machines and volleyball and flex hours and so forth. These are fine -- but they have no statistical relationship to creating new customers. You have to believe any star team leader, on any given day, can create new customers and save the company with an idea or breakthrough.

Truly great cultures are different because they are loaded with star team leaders. You might ask, "Gallup, over your 40 years of studying lousy-to-great cultures, have you found a silver bullet?" Our Chief Workplace Scientist Jim Harter would answer, "Yes, the silver bullet is your managers (team leaders)." They, by themselves, determine if you have a lousy, good or great culture. They are the silver bullet.

Remarkably, 70% of the variance between lousy, good and great cultures can be found in the knowledge, skills and talent of the team leader. Not the players, but the team leader. This is one of Gallup's most profound workplace breakthroughs.

So you say, "What exactly do you recommend?" Our answer is, it depends on where your culture is today. If it's lousy, you should start over. Get out a clean canvas and announce you are reorganizing the whole company.

If you have a solid, "good" culture, you should significantly re-engineer it with all the best breakthroughs, tools and learnings.

If you actually have a great culture now, you can -- believe it or not -- boom it even higher above the lousy-to-good workplaces. For whatever reason, the great cultures seem to benefit more from new dynamic processes. For instance, great companies got more benefits, more quickly from Six Sigma and lean management than lousy cultures, where these methods basically didn't work.

Gallup recommends, first, change your team's leadership philosophy from the current command-and-control to one of high development, high purpose and strengths-based coaching. If you do these three things well, you will immediately experience more innovation and entrepreneurism, and secure your future.

Second, Gallup recommends making a structural change to what you require in a team leader (manager). Require them to actually coach their team members every week and touch base with them regularly. All the articles about the failure of annual reviews and the need for ongoing conversations are right and a good start -- very hard to do well -- but definitely right. Great team leaders love using the right tools and learning the new practice of management. They will learn things like high development beats high satisfaction. And high purpose beats workplace benefits.

Our third recommendation: Tell your executive committee and board you are transforming your culture from one of command-and-control to one of high development. When board members ask, "Why?" tell them exactly this: "The practice of management has changed. We are moving to a culture that attracts and holds stars. A culture that creates sudden massive innovation and entrepreneurship -- so we can win more customers."

Gallup is announcing today our official response to the shift in performance management, and what organizations need to do right now to re-engineer their current practices.

Our team of scientists thoroughly researched the topic of performance management -- conducting stakeholder interviews with top scientists and world-leading experts, along with analyzing our own databases of more than 60 million managers and employees worldwide. We put it all in a research paper called "Re-Engineering Performance Management." We did this so our clients could be up to speed on everything.

We're now offering state-of-the-art analytics, tools and advice so our clients can have a turnkey solution as they address the needs of the new global workforce.

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Jim Clifton is Chairman and CEO of Gallup. He is author of The Coming Jobs War (Gallup Press, 2011).