The value in developing a company’s leadership culture

One of the joys in what I do is seeing some exceptional local organizations make the most of limited resources. I also have the opportunity to meet thought leaders in various business disciplines who know how to leverage those limited resources. When I find such individuals, I invite them to either speak at the Neeley School of Business or at local meetings of The Alternative Board or I mention them in this column.

Such was the case in meeting John A. King and Melissa Smith of the Keller-based Next Foundation (www.nextfoundation.org). King, founder, is a best-selling author, business consultant, executive coach and keynote speaker. His Next Foundation is a premier leadership training firm, working with organizations to increase productivity and longevity by creating a culture of leadership at every level in an organization. King will be a speaker at the HR Excellence Forum at Texas Christian University on Jan. 29, 2010.

Here is some of what they shared with me.

Want front-line employees who take an ownership role in the customer experience? Want to minimize recruitment and retraining costs by maximizing retention? Solution: Grow leaders at every level by designing a business culture that with every interaction, every meeting, every change in policy, you are purposefully crafting a leadership culture in your organization. 

If you do not actively create the culture it will develop by default — usually less effective, less proactive — certainly less than optimal — affecting customer development, employee retention and, ultimately, your bottom line. 

Business culture happens by design or by default. In a landmark study by John Kotter and James Heskett, described in their book, Corporate Culture and Performance, they revealed that during a 10 year period, companies that intentionally managed their cultures well outperformed similar organizations that did not.  The numbers are staggering:

There are five clear, measurable indicators of a healthy leadership culture. In a nutshell, “Leaders must create a safe place for ideas to grow and develop with an open forum for input.”

1. Passion

Leaders are motivated by factors other than compensation. Team members understand the mission of the organization and are motivated by their connection to it. They are passionate.

Leaders encourage pursuit of individual team members’ goals. Teammates hold each other up, not drag each other down.

2. Accountability

Leaders give those around them the reason, courage and purpose to change for the better. That is called accountability. It must be explicit in every interaction. It may get ugly at times, and everyone may be uncomfortable, but this kind of discomfort is necessary for growth.

Inner accountability is the force that creates a sense of integrity. External accountability is the force that makes everyone work with integrity.

3. Consistency

Leaders who approach every interaction dedicated to acting consistently build trust within a team. Consistency of purpose and vision is the strongest antidote for discouragement, and keeps team members engaged. Consistency soothes the open wound of office politics. It is the quality that will prevent accusations of favoritism. It is the anchor upon which team members will come to rely.

4. Transparency

Leaders who are transparent and encourage this trait signal the team has the freedom to be open and give instructions and receive feedback. Mistakes are allowed to happen in the open, failures are important because that way everyone can learn from them. One of the five foundational values at Toyota is embracing failure as a mechanism for learning. They recognize that you have to fail in order to progress, and consider that one of their top five core values.

All growth and development is a by-product of process and stress. The manure of today is the fertilizer of tomorrow. Rewarding peoples’ attempts encourages vulnerability. The only difference between a lump of coal and a diamond is time, heat and pressure.

5. Stability

Leaders are essential to stability. Passion, accountability, consistency and transparency all combine with stability to create a culture for growth and excellence. It means that consequences and rewards are the same every day, regardless of situations or personalities.

It means that the vision you had for the company yesterday is the same vision pursued today. Efforts are the same, yet the fruits will be multiplied.

If you are interested in learning more about how to instill such a leadership culture within your organization, and how you may be able to access federal stimulus dollars to pay for the training to training and coaching to do so, contact the Next Foundation at 877-484-8186. 

Ed Riefenstahl is the Fort Worth area managing director of The

Alternative Board. He also founded and leads Neeley & Associates Consultants at TCU's Neeley School of Business.