Recently I’ve asked top-performing advisors this simple question: To build a high-performance team, which of these three factors is the most important:
- The right team members – hiring people who are talented, motivated, hard-working and collaborative;
- The right incentives – putting in place the optimum combination of rewards and recognition; or
- The right culture – communicating clear norms about what is expected and giving team members the scope to experiment and fail.
Many advisors say that the most important driver is hiring outstanding talent or having the right reward structure, but a new book builds a compelling case that what makes organizations like Google, the Navy Seals and San Antonio Spurs truly excel is the third answer, creating the right culture.
Why team culture matters
Author Daniel Coyle has written best-selling books on topics ranging from the drivers of outstanding performance (The Talent Code) to the Tour de France. At a recent talk he discussed the research on what creates winning team cultures, which he outlined in his latest book The Culture Code.
He began by pointing to research from the Harvard Business School, in which companies with strong cultures outperformed those with average cultures by a factor of seven over a 10-year period. And he talked about baseball’s Cleveland Indians, for which he is a special advisor. Despite spending $400 million less than the Yankees and Red Sox on their payroll, over the past five years the Indians had a superior record and in 2017 had the longest consecutive win streak in 100 years.
Coyle argues that a positive culture is the most powerful predictor of winning performance. That’s begun to be broadly acknowledged – as witnessed by the “no jerks” rule at many tech companies. No matter how technically capable someone is, if they’re incapable of being a team player the cost of having them on board outweighs the contribution.
In his talk, Coyle said that there is little debate about what organizations with strong cultures look like: For any group to operate effectively, it needs to connect, to share accurate information and to operate cohesively in a clear direction.
The question is what makes people behave in those ways. To try to understand what drives the right culture, Coyle spent two years at varied organizations that are recognized as having winning cultures, looking for commonalities that drive their success. His conclusion: Much of the conventional thinking about what it takes to create a winning culture is unhelpful and is either too vague or flat out wrong. Instead, he identified three traits or rules shared by organizations with winning cultures.
Rule one: Create safety
The first rule is to create a safe space for team members to experiment, to make unconventional suggestions and to fail. When it comes to successful teams, Coyle said that “safety isn’t the frosting on the cake, it’s the whole cake.”
As an example, Coyle talked about Project Arisotle at Google, an initiative to identify the very best practices of top-performing teams. My article, Google’s Lesson on Making Your Team Excel, outlined that the key determinant of strong teams was not the talent or motivation of team members but rather their feeling safe to openly talk about issues, problems and ideas.
Coyle went to talk about how a sense of belonging to a group correlates to feeling safe and how to create that bond. One way is to be genuinely curious about team members’ backgrounds, interests and motivations. Coyle talked about an experiment that the outsourcing firm WIPRO conducted with its one-hour orientation for new employees in its call center. One group of employees got the conventional short introduction about WIPRO and a talk by a star performer. The second group replaced some of that with questions about the new employees, in which they got to know each other better.
Seven months later, turnover in the second group was half that of the first. Coyle hypothesized that this was due to the signal that the new employees in the second group had received that they were important and belonged to a cohesive group. As Coyle put it, “Belonging leads to more productive work but safety leads to a sense of belonging.”
Coyle pointed to coach Gregg Popovich of basketball’s San Antonio Spurs as an example. The Spurs have made the playoffs in 27 or the last 28 seasons and are on track to make the playoffs again this year, despite losing their best player, Kawhi Leonard, to injury for all but nine games. Coyle talked about how intense Popovich cares about his players and the things he does to create a bond, including having the team eat all its meals together when it’s on the road.
Coyle talked about some of the ways a leader creates safety on a team:
- In the first five seconds of interactions, make being open and creating a sense of safety your #1 priority.
- Use an “open face” in which you smile, make eye contact and display curiosity.
- Practice the 2x rule – send signals of connection and safety twice as often as you think necessary.
- Create opportunities for informal conversations – the company Pixar built extra-wide hallways so that people who encountered each other could have a quick casual conversation.
Coyle also identified the biggest hurdle when it comes to open conversations – the fear on the part of many employees about speaking. He said that the most important words that a leader can say are “I’m terribly sorry, I really screwed that up.” Coyle also pointed to how the Navy Seals used after-action reviews to create a safe environment for feedback, suggestions and criticism. After each mission, all of the Seals who participated in an engagement meet as a group to talk about three questions:
- What went right?
- What went wrong?
- How will we operate differently next time?
This New York Times article elaborated on what Google learned in its quest to build the perfect team.
Rule two: Share vulnerability
The second trait shared by outstanding cultures is openness and vulnerability. As Coyle observed top teams in operation, he saw that vulnerability creates trust, closeness and cooperation.
When Navy Seals go through an after-action review, they expose themselves. When leaders confess to the things they got wrong, they make themselves vulnerable. And when advisors ask their teams about suggestions for the one thing which they should stop doing to improve performance, they make themselves vulnerable.
Coyle also said that while this may be scary and painful at first, just as the mild soreness after a tough workout is a sign that your muscles are getting stronger, some mild discomfort is a sign that you are pushing yourself out of your comfort zone and helping your team get stronger.
Coyle had some specific advice for leaders who want to increase trust within their team and are prepared to make themselves vulnerable to make that happen:
- Be prepared to be vulnerable first and often.
- In giving feedback, aim for warm candor, stay away from brutal honesty.
- Separate conversations with team members about their performance from conversations about next steps and development. When giving feedback, get people to concentrate on the feedback rather than being distracted about where the conversation Is leading in terms of progression or compensation.
Rule three: Tell a common story to capture your purpose
Coyle finished by pointing to Johnson & Johnson’s response to the 1982 Tylenol crisis as an example of the critical importance of shared stories in helping teams excel. Here’s an excerpt from an article about that crisis:
In 1982 a consumer products company's worst nightmare became tragic reality for Johnson & Johnson. In the space of a few days starting Sept. 29, 1982, seven people died in the Chicago area after taking cyanide-laced capsules of Extra-Strength Tylenol, the painkiller that was the drugmaker's best-selling product.
Marketers predicted that the Tylenol brand, which accounted for 17 percent of the company's net income in 1981, would never recover from the sabotage. But only two months later, Tylenol was headed back to the market, this time in tamper-proof packaging and bolstered by an extensive media campaign. A year later, its share of the $1.2 billion analgesic market, which had plunged to 7 percent from 37 percent following the poisoning, had climbed back to 30 percent.
What set apart Johnson & Johnson's handling of the crisis from others? It placed consumers first by recalling 31 million bottles of Tylenol capsules from store shelves and offering replacement product in the safer tablet form free of charge.
"Before 1982, nobody ever recalled anything," said Albert Tortorella, a managing director at Burson-Marsteller Inc., the New York public relations firm that advised Johnson & Johnson. "Companies often fiddle while Rome burns."
James Burke, the company's chairman, was widely admired for his leadership in the decision to pull Tylenol capsules off the market, and for his forthrightness in dealing with the media. In a news conference only a month and a half after the tragedy, he gave a full chronology of what the company had done. "He looked in complete control," said Tortorella.
Under James Burke’s leadership, J & J responded much more quickly and decisively than anyone had thought possible. Coyle attributed this success to the four years before the crisis that Burke had spent travelling everywhere that J & J operated, talking about the values that J & J embraced. That shared story allowed J & J to recover from what could have been a death blow.
Great teams over-send messages about their shared narrative in a purposeful fashion, according to Coyle. When he talks about the Navy Seals referring to themselves as “the quiet professionals” or using the expression “The only easy day was yesterday,” he makes the point that these phrases aren’t intended for inspiration; rather they are designed for navigation.
Coyle outlined the steps he saw great teams using to capture stories that create a sense of shared purpose:
- Begin by looking inwardly at the things that make your team unique. Get your team to think about the activity and behavior that gets rewarded. What happens on your team that would be unlikely to happen on other teams?
- Identify the most important elements of your stories and tell those stories non-stop.
- Continually seek and share examples of interactions that support your purpose. At your Monday team meetings, take two minutes to talk about something that happened in the last week that reinforces your purpose and supports your story.
- All of your team’s interactions should be consistent with the purpose in your story. In particular, think about how your response to problems or unexpected challenges emerges from your shared story, just as was the case with J & J’s response to the Tylenol crisis.
Coyle concluded by saying that that great cultures don’t happen by accident; they happen because an organization’s leaders have made putting the right culture in place their very highest priority
For more about motivating your team, you may find these articles valuable:
Key Steps to Motivating Your Team
Why Team Bonuses Hurt Performance
Feedback That Motivates Your Team
Five Steps to a Passionate Team
How High Expectations Can Hurt Your Business
How One Advisor Boosted His Team’s Performance
The Perfect Team Meeting to Start Your Week
Two Simple Questions to Motivate Your Assistant
Four Steps to a Top-Performing Team
Dan Richards conducts programs to help advisors gain and retain clients, and is an award winning faculty member in the MBA program at the University of Toronto. To see more of his written commentaries, go to www.danrichards.com.
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