In the 1990s, Robin Dunbar, an anthropologist, found a correlation between the size of a primate’s brain and the number of social relationships it can maintain. Humans are primates, so he extrapolated these finding to derive Dunbar’s number—150. This is the estimated number of stable relationships that any individual can hold. So much for 100,000 Facebook friends, Linkedin connections, or Twitter followers.
While researchers may debate the precision of Dunbar’s number, the basic notion that we can’t have an infinite number of close relationships is self-evident. What are the implications of this fact for building corporate culture or spreading conscious capitalism inside of an organization? Many scholars, like Malcolm Gladwell in The Tipping Point, assert that once an organization gets far beyond this figure, companies “generally require more restrictive rules, laws, and enforced norms to maintain a stable, cohesive group.”
A number of the CEOs I’ve interviewed have shared their reliance on modelling their corporate values as the primary (sometimes only) tactic they employ for imparting and maintain their culture. The proof is in the pudding, they say—”I’ve taken a hands-off approach to culture and focused on demonstrating the values. And, see, it’s worked for me.” On this week’s show, I discussed Dunbar’s number and its implications for modelling of corporate values.
Work It Up to 150
If your company is still small enough that you can see and touch everyone, use Dunbar’s principle for all it’s worth. Monkey see, monkey do. CEOs have the opportunity to exert maximum influence to establish and reinforce the company’s value system. INC magazine’s article 9 Ways to Reinforce and Live Your Company’s Core Values Every Day says the first approach is to live and lead by example: “Leaders are always being watched. Setting core values, and then failing to abide by them, is worse than not establishing core values at all. A solid core values system is especially important in difficult times. It’s rather easy to adhere to established desired behaviors when things are going well. When a company hits a bump in the road however, is when it’s most important to stand by what you believe at your core.”
On CEO Exclusive, Scott Arant from American Health Imaging advocates leadership behavior as the primary tactic he employed in building one of the largest independent imaging groups in the county. They’ve relied on modelling core values, compensation, and hiring as the pillars of a culture that has been recognized in their industry.
Have a Transition Plan for the Next Tier
So, what happens when you hit the proverbial employee 151? Things change. You can’t remember everyone’s name. You start seeing people you don’t recognize in the break room. You start feeling a little disconnected. Companies that are committed to maintaining core values take these queues as an opportunity to institutionalize their culture.
A significant number of CEOs have preached about becoming ruthless about hiring for cultural fit. “Once the company culture has been defined, ideally every action, strategy, decision and communication should support the cultural beliefs. Including all HR mechanisms from recruitment and hiring processes to performance review systems. So why is culture fit so important for recruiting and retaining great talent? Hiring employees that don’t mesh well with the existing or desired company culture leads to poor work quality, decreased job satisfaction and a potentially toxic environment. This results in turnover which has high costs–both hard and soft,” says INC Magazine in The 1 Thing All Great Bosses Think About During Job Interviews.
In addition to recruiting, most companies start one or two marquis programs that exemplify their culture and help them stand out. More programs to reinforce culture are added as the company grows. Case studies of other companies that can become a catalog of options for specific values one may want to push. For example, if “Giving Back” is a core value, company programs like the ones we’ve discussed with Fabrik, Modo Modo, World 50, American Global Logistics, or Gas South can provide templates for other culture-centric companies.
Who is the steward of the company culture? In many mid-market companies, that responsibility will most often fall to the CEO or be spread across multiple executives. In larger companies, “Chief Culture Officer” is a new position that has emerged. According to Forbes, “The job [of the chief culture officer] is to cultivate a strong culture, especially as business and employee needs cause the culture to evolve. It’s no coincidence that the chief culture officer position is growing in popularity now—more and more organizations are realizing the importance of culture and the role in plays in creating a quality experience for employees and customers. In fact, studies have shown a clear connection between culture and things like a company’s reputation, financial performance, and attitude of its employees.” While a single employee for culture might be a daunting investment, the idea of making culture an important part of someone’s job holds value even in smaller companies.
Seamlessly Shift to Metrics, Systems, and Processes
At some point, the organization grows far beyond the limits of Dunbar’s number. If a company has thousands of employees, no one person—even the leaders—can have a meaningful relationship with a significant portion of the population. The top leaders can coach and spread their values to their inner circle and they can carry the value to the next group and so on, right? Yet, like the kid’s game of Telephone, the message and values often get diluted. At this point, successful organizations introduce metrics and systems to tighten things up.
Metrics around culture are hard to come by. The best analyses I’ve seen have been developed by the Barrett Values Centre. The Culture Values Assessment and Cultural Transformation Tools establish a baseline for a company’s existing values and then (most importantly) measure alignment and dysfunction. The truth will set you free!
Larger businesses where modelling is not as effective must rely on processes help people make adjustments after misalignment with the desired culture has been identified. Two respected colleagues, Adam Schorr and John Wallis have developed a model with 15 approaches to driving culture. These tactics provide a rich body of tools to ensure that any company of any size can align with the values to which it aspires.
No matter how committed or earnest any individual CEO might be, he or she cannot maintain a close bond with an unlimited number of people. Those deep relationships are the ones where one has the most influence on values and culture within a closed group (like a business). Modelling as an approach for instituting core values is essential, but has limits. Know where and how it works and use it well.