Establish Core Cultural Principles
When starting a company or building a new division or team, it is essential to:
Ensure everyone rows in the same direction
Empower people (you cannot be everywhere at once)
Build trust
Enable opportunities for creative descent
Ensure feedback is received and leveraged
Core cultural values help to establish some common language which guide employees and managers towards outcomes in the interest of the firm. However, these should be selected wisely, embraced by ownership and changed highly infrequently to avoid confusion, distrust or a sense of hypocrisy.
Establishing Core Cultural Values (and sticking to them!)
The first and most critical step for any new organization with establishing cultural principles on which executive leadership agrees and are designed to drive collaboration, integrity, improvement, and trust. Core cultural principles cannot be a series of inspirational statements that are posted around the office. They must be engrained into the fabric of the organization through the hiring practices, regular team interactions, training, and performance evaluations. But most importantly, they must be embraced by senior leadership. Many companies adhere to the Jack Welch method of constantly culling what are perceived as “underperformers” from the organization at each performance review. While it may be necessary from time to time to eliminate positions or get rid of disruptive employees, creating an environment of consistent underlying fear of losing one’s job discourages learning, collaboration, innovation and loyalty while encouraging withholding information, covering up of errors and apathy. In construction, mistakes will be made, and those mistakes are, unfortunately, often expensive. Competing incentives between deal makers and construction invariably leads to conflict, distrust, and enmity. While healthy debate between knowledgeable professionals will often lead to the most optimal outcome, developing trust amongst those with different perspectives is critical.
Some examples of core cultural principles utilized by successful companies are as follows. There are far more examples than can be listed here, but these can provide a spark of inspiration for your own needs:
Bridgewater Associates – “Radical transparency and radical truth.” (All meetings are recorded, and everyone is encouraged to challenge anyone.)
Netflix – “We encourage independent decision-making by employees.”
Palantir – “We prioritize outcomes over optics.” (Focus on real-world impact rather than looking good.)
Google – “Focus on the user and all else will follow.” (Customer obsession as a driver of innovation.)
Tesla – “Think like a first principles engineer.” (Break problems down to their fundamentals rather than relying on analogies.)
Apple – “Simplify.” (Strip down to the essentials — design, communication, and function.)
IDEO – “Fail early to succeed sooner.” (Promotes rapid prototyping and iteration.)
SpaceX – “Assume responsibility. If you see a problem, fix it.”
Microsoft (under Satya Nadella) – “Growth mindset.” (Learning is more valued than being right.)
Atlassian – “Don’t #@!% the customer.” (Serves as both an ethic and a north star.)
Facebook/Meta (early years) – “Move fast and break things.” (Later changed to “Move fast with stable infrastructure.”)
Amazon – “Bias for action.” (Speed matters in business; many decisions are reversible.)
In addition, two examples we will share from other firms with which we have had exposure offer additional insights. One of the more challenging concepts we encountered was a company that embraced “Thinking Inductively,” which they interpreted as providing the answer first in any presentation, meeting or communication. The idea being that you start with the answer and then follow it up with your supporting argument. While effective for CEOs and senior leaders to whom these answers were presented, it was not necessarily an easy or intuitive concept for employees to embrace. For more information on this method, the following article provides a good summary.
Using Inductive Thinking to Communicate Strategically
A second example was a firm which claimed to embrace a core cultural value of “Debate & Challenge” the idea being that every meeting, decision or new idea should be rigorously debated to ensure that the optimal idea came out on top. In our estimation, this value was a failure in its selection and ongoing implementation. First, it provided an opening for endless debate as certain parties might never be “won over” to the winning idea. This value endlessly prolonged decision making and often frustrated employees. These debates also resulted in the losers feeling scorned and leading to reprisals or rejections of their implementation. In addition, it was not truly embraced by senior management, as often employees who had more outspoken opinions, though it was seemingly encouraged, were often dismissed for not being “team players.”
These are just a few anecdotes on what ideas may sound good in theory, but may not lead to the results for which one is seeking. Therefore, it is important to start with the types of conceptual values might lead to optimal outcomes and to consider each from the position of employee, manager and senior leadership.
Below are some examples of key cultural principles designed to engender trust and open communication. This is especially difficult in the world of real estate and construction, where small oversights or decisions can lead to massive cost overruns or missed opportunities due to risk aversion. For this reason, we recommend utilizing these (or similar concepts) as a starting point:
Be honest about what you know and what you do not
Deliver on what you promise can be done
If you make a mistake, own it immediately and inform all impacted team members
Mistakes will be made, utilize them to learn and continuously improve
Treat all ideas with respect, acknowledge strengths and tactfully offer constructive critique
Provide ideas on how challenges can be solved, not just why other’s solutions will not work
Address any conflicts that arise directly with that individual, exhibit the personal courage not to slander
Establishing a Culture of Continuous Improvement
Additionally, it is recommended that a culture of continuous improvement be fostered, including sufficient time taken for “post-game analysis” and incorporation of those lessons learned into a feedback loop which will aid knowledge transfer and ongoing training for project team personnel. One possible form this cultural practice could take would be requiring project managers to take an “open book quiz” at the start of each project. This practice, used by one of our most successful general contractors, ensured that they were sufficiently knowledgeable, not only in the project they are about to undertake, but also asks probing questions gained from the prior experience of the organization which they may not have considered. This aids in ensuring consistency of project management regardless of personnel turnover.
Developing Core Cultural Values
From here, ownership should develop the core cultural values they wish the organization to embrace. It is critical that this effort be strongly led by the owner or CEO based on their vision for the company with as minimal input from senior leaders. Ultimately, this responsibility falls squarely on the leader of the company. Core cultural values will be watered down when decided by committee. Additionally, this is the type of effort in which Human Resources often desires to assert authority. This support, while tempting, should be resisted. What every company needs to survive is dedicated employees who fundamentally desire to succeed in their roles. Too often HR inserts itself into the design of company culture, and the more it does so, the less employees will embrace those values.
Communicating (proselytizing?) the Core Cultural Values
Once the owner or CEO has developed their core cultural values, it is critical that executive and senior leadership embrace their final form. While employees should receive constant reinforcement of these principles through training and team meetings, senior managers and executive leadership must also commit to protect those who live by them. This means that if an employee is under scrutiny for possible dismissal, senior management and executive leadership should ask whether or not the employee violated one or more of the core principles, and if not should instead provide additional coaching, support or move the employee to a position which may better suit their talents. These core principles, once agreed to by executive leadership, must not just apply to construction staff as they are brought into the organization, but the foundation for a culture of trust with existing employees who will interface with this new division should begin as soon as possible.
Additional Sources of Idea Generation
Good to Great – Jim Collins
The Toyota Way – Jeffrey K. Liker
The Goal – Eliyahu M. Goldratt
Built to Last – Jim Collins & Jerry I. Porras
Principles – Ray Dalio
Execution – Larry Bossidy & Ram Charan
