Class Takeaways — How to Lead Through Workplace Culture

Glenn Carroll: Hi, I’m Glenn Carroll. I teach a class at the Stanford Graduate School of Business, entitled, Leading Through Culture. I’d like to talk to you about five key takeaways from this class.

1. Managing Culture vs. Traditional Management

In traditional management, the manager observes the worker, measures his output, coaches him and gives him feedback, and tells him how to do it better. In cultural management, you build the system, you trust the system, and you sit back and let it happen. The hardest times for a manager in a culturally managed system is in times of crisis because in times of crisis, the impulse is always to grab the wheel and to try and direct things, to get in charge. But in a strong culture system, you just have to trust that the system’s been built properly and that things are going to work out.

2. Strong Cultures Make Management Easier

In his book, No Rules Rules, the CEO of Netflix, Reed Hastings, tells a story about how when Sheryl Sandberg, the COO of Facebook, followed him around all day to see how he managed. At the end of the day, he quotes her a say, “the amazing thing was to sit with you all day long and to see that you didn’t make one decision.” Reed smiled and said, “I felt great because that’s exactly what we were aiming for.” The reason he could do this is because Netflix has a strong culture, and the culture has people who are making decisions very similarly to the way that Reed would’ve made them himself, but he didn’t have to make them.

3. Cultural Content

The third key takeaway is that you can build a strong culture around any set of beliefs, values, or practices. This is what organizational theorists called cultural content and cultural content is irrelevant for whether you have a stronger or weak culture. Don’t believe it. Consider the fact that I could name examples of strong cultural organizations from businesses of all kinds, manufacturing, retail, service, finance, you name it. Religious cults, schools, terrorist cells, urban gangs, SWAT teams, military special forces. The content is irrelevant for whether the culture is strong or weak.

4. Building Strong Culture Is No Mystery

Most managers use three key levers defining the culture, setting up incentives and launching training and communication programs. But in fact, there are something like 20 different levers that are available for a manager to use. They include things like, making the organization transparent, homogenizing the groupings, broadening the job definitions, instituting job rotation. This list of levers is long and can be used in many different ways. It’s a mistake not to use or consider at least the full set of levers.

5. Culturally Selective Hiring

So, the fifth key takeaway is about the most impactful managerial lever. It is culturally selective hiring. You can always do it. You need to be hiring. You probably need to be growing. To do it requires lots of time and interviews. Cultural selective hiring is often criticized today because if it’s not done right, it can introduce a lot of bias and discrimination because when you select on cultural traits, you also get a lot of other things that are more homogeneous than you might like. The issue though, can be resolved if done properly. And the important thing to remember is the culturally selective hiring works and it is the most impactful thing to build a strong culture quickly and effectively.

I always did well in school, but I was also a little bit of a troublemaker, or at least, I hang out — I hung out with the kids who were troublemakers. You could ask my colleagues or my deans. I still cause trouble occasionally in their minds, I’m sure.