In a recent strategy meeting we attended with the leaders of a Fortune-500 company, the word “culture” came up 27 times in 90 minutes. Business leaders believe a strong organizational culture is critical to success, yet culture tends to feel like some magic force that few know how to control. So most executives manage it according to their intuition.
We’ve found that answering three questions can help transform culture from a mystery to a science:
1) How does culture drive performance?
2) What is culture worth?
3) What processes in an organization affect culture?
In this article, we address each of these to show how leaders can engineer high-performing organizational cultures — and measure their impact on the bottom line.
How does culture drive performance?
After surveying over 20,000 workers around the world, analyzing 50 major companies, conducting scores of experiments, and scouring the landscape of academic research in a range of disciplines, we came to one conclusion: Why we work determines how well we work.
One 2013 study illustrates this well. Researchers asked almost 2,500 workers to analyze medical images for “objects of interest.” They told one group that the work would be discarded; they told the other group that the objects were “cancerous tumor cells.” The workers were paid per image analyzed. The latter group, or “meaning” group, spent more time on each image, earning 10% less, on average, than the “discard” group — but the quality of their work was higher. Reshaping the workers’ motive resulted in better performance.
Academics have studied why people work for nearly a century, but a major breakthrough happened in the 1980s when professors Edward Deci and Richard Ryan from the University of Rochester distinguished the six main reasons why people work. We built on their framework and adapted it for the modern workplace. The six main reasons people work are: play, purpose, potential, emotional pressure, economic pressure, and inertia.
The work of many researchers has found that the first three motives tend to increase performance, while the latter three hurt it. We found that the companies most famous for their cultures — from Southwest Airlines to Trader Joe’s — maximize the good motives, while minimizing the bad ones.
Play is when you are motivated by the work itself. You work because you enjoy it. A teacher at play enjoys the core activities of teaching — creating lesson plans, grading tests, or problem solving how to break through to each student. Play is our learning instinct, and it’s tied to curiosity, experimentation, and exploring challenging problems.
Purpose is when the direct outcome of the work fits your identity. You work because you value the work’s impact. For example, a teacher driven by purpose values or identifies with the goal of educating and empowering children.
Potential is when the outcome of the work benefits your identity. In other words, the work enhances your potential. For example, a teacher with potential may be doing his job because he eventually wants to become a principal.
Since these three motives are directly connected to the work itself in some way, you can think of them as direct motives. They will improve performance to different degrees. Indirect motives, however, tend to reduce it.
Emotional pressure is when you work because some external force threatens your identity. If you’ve ever used guilt to compel a loved one to do something, you’ve inflicted emotional pressure. Fear, peer pressure, and shame are all forms of emotional pressure. When you do something to avoid disappointing yourself or others, you’re acting on emotional pressure. This motive is completely separate from the work itself.
Economic pressure is when an external force makes you work. You work to gain a reward or avoid a punishment. Now the motive is not only separate from the work itself, it is also separate from your identity.
Finally, inertia is when the motive is so far removed from the work and your identity that you can’t identify why you’re working. When you ask someone why they are doing their work, and they say, “I don’t know; I’m doing it because I did it yesterday and the day before,” that signals inertia. It is still a motive because you’re still actually doing the activity, you just can’t explain why.
These indirect motives tend to reduce performance because you’re no longer thinking about the work—you’re thinking about the disappointment, or the reward, or why you’re bothering to do it at all. You’re distracted, and you might not even care about the work itself or the quality of the outcome.
