Culture is often a far too nebulous term. If you ask 5 different people what an organizational culture is, you will probably get 5 different responses. Sometimes, it seems to be something that people rely on intuition to identify. They may not be able to put into words what a good or bad culture is, but they have an intuitive opinion about the culture of the organization they are a part of. Maybe they will point out some characteristics they don’t like—the amount of micromanagement, not being able to work from home, and other similar complaints.
Unfortunately the symptoms of culture are often what gets addressed, with companies boasting of their great culture with fewer rules, company happy hours, or unlimited work from home options. Don’t get us wrong, those things are nice and could positively impact your team. However, these are primarily symptoms of healthy cultural practices, not underlying choices that will help transform your culture.
There are several dimensions of organizational culture that impact cultural change. But like many things, the impact of cultural practices goes both ways. If an organization makes poor organizational health decisions or forgoes making healthy ones, culture will not remain static—it will decline.
We recently examined a worksite accident that occurred on a construction site in Boston. The goal was to get an understanding of how the incident occurred and then establish an action plan that business leaders could employ to proactively prevent similar accidents.
Accidents don’t just happen on the worksite. Cultural accidents, where the practices and habits and organization has built comes back to bite them, can derail a company from their pursuit of goals, incur significant costs, hamper productivity and profitability, and damage their reputation.
In July this year the California Department of Fair Housing and Employment filed a lawsuit against software developer Activision Blizzard in the wake of a year long investigation into the organization. This investigation unearthed allegations of truly awful behavior across the company's multiple game development studios and offices. These allegations told the stories of multiple women who spoke of sexual harassment and assaults along with psychological trauma. They also claimed that leadership throughout the company did almost nothing to stop or limit what was happening. Here are some of the LOWLIGHTS that have come out throughout the investigation:
Members of leadership resigned as the organization became embroiled in the allegations and legal struggles of dealing with the investigation and its fallout. Employees have staged walkouts, sponsors like T-Mobile have pulled out from their gaming leagues, and the SEC has begun its own investigation.
How did Activision Blizzard end up with a full-scale catastrophe throughout their culture? No company sets out with serious cultural flaws as a goal, but too often, companies don’t take proactive steps to build a culture that is healthy and helps their people thrive. We sat down with our Chief People Officer, Kevin Dill, for a post-mortem of the incident and to try and figure out how businesses can prevent something like this from happening in the first place.
Kevin, thanks for being here.
Kevin: Happy to do it!
Let’s start with the history of culture within the software development industry, more specifically crunch culture. Crunch culture is essentially the idea that you work as long as you need to work to get something done by the deadline. That’s the expectation. If you won't do it, they'll hire someone who will.
Kevin: Sounds like a nightmare.
It results in a lot of unpaid overtime, where people are working 80 to 100 hour weeks, trying to hit deadlines. What feedback would you have for an organization like that where essentially the organization is saying “Work is all that matters”?
Kevin: Well first off, that would be a horrible company culture to work in, because? The first step that the leadership should look at is the key performance indicators for the people side of the business. They are looking at key performance indicators on the sort of business side of things—their profit loss statement, their strategic plans, deadlines, goals, moving development projects forward, or growing sales. Far too often, the people side of things gets ignored. I'm guessing they would see that there's a high level of turnover. And it might be easy to recruit since often these companies can offer great salaries and big bonuses or a really competitive compensation package to attract and recruit people. But it is unsustainable to work in that environment for very long. Eventually the stress and the competing demands just take over.
The body always keeps score and there's always a day of reckoning. Basically the stress that we absorb from our workload, for example, and all the demands and the noise in the system that we that we work in—our body's going to keep score of that and eventually it's going to break down. So we're not going to get good sleep, we're going to be anxious, we're going to be overreacting to things. There will be no cognitive ease which creates the ability to be able to be innovative and creative and inspiring, and be able to develop good products, good content, good services.
The first symptoms you will see will probably be due to mental stress. People will have a short fuse which just sort of cascades or dominoes into different problem areas like communication, trust, belonging, and morale. They won't have joy coming to work, so they lose a sense of purpose they initially started with, and eventually burn out.
Fascinating. Within the software industry specifically, there are actually laws in place that allow for crunch culture. At a certain salary they are exempt from any kind of overtime regulations. Baked into the whole structure of the industries this idea that they may pay you well, but then you are theirs.
Kevin: That's called treating people like human doings, not human beings. It really comes back to—what's the philosophy of the company? Do they care about people or not? Upfront they might say they do. They pay them well, they provide awesome facilities to create and code, allow flexibility and yada, yada. But they don’t really care about people. And that leads to issues employee employment issues such as discrimination and harassment, and wrongful termination, and a host of other problems.
If a company does care about their people, and want to see them thriving, what are some things you would coach the leadership of that company to do?
Kevin: Yeah, so the first thing is preparing the field for planting. And that means that the leadership has to be open and receptive to this concept and this philosophy that we don't want to treat people like human doings, we want to treat them like human beings. And sometimes they're blind to that. In other words, they overestimate the value of things like compensation and vacation days and the strategies they are using but yet, they're not developing their people. They're not working on the culture. One way that's pretty effective is to just show them data. Because a lot of times, the leaders are all about the bottom line. So we talk in numbers, in terms of how that hits their profit and loss statement. There's always a cost to onboarding people from recruiting and selecting to onboarding. There's always a cost to losing people. The costs really start to ramp up if they leave disgruntled and they file lawsuits against you for things like discrimination. And those legal issues can drag out for a long time—years even.
So I always start by looking at the cost of people in very black and white terms. We know through research that when you invest on the people side of things and treat them like human beings, not human doings, that you can actually increase your revenue between 5 and 10 times. Many leaders will say they are doing fine. And I asked them, would you like to do better?
With their eyes open, the number one thing I would focus on is culture and defining a vision of the kind of culture they want to have. Then we look at the dimensions that will drive that culture. There are several strategies you can employ to build healthy communication, relationships, and trust that will be dependent on your company and the culture you want to create. One important focus point is fun. Often equated with humor and games, fun has to exist in a healthy way that creates psychological safety. There's a difference between empowering humor and humor and fun that harms and makes fun of people. Leadership will play a huge part in modeling what is acceptable behavior and leading the vital dynamics of fun and joy throughout the company.
I think that's a good transition to discussing the train wreck that occurred in the Activision culture. When we look at some of the lowlights we mentioned before and the way that leadership has played a part in all of this, what are your thoughts?
Kevin: What initially stood out to me is that this is straight up bullying from leadership. And the second thought I had is just how widespread throughout the company the issues are that it's going to spoil the whole well. When the whole well is spoiled, it's going to be harder to attract very talented people, because of the reputation you have. I always think about this, in terms of what I call the cultural line. And you can either be above the cultural line or below it. And what I mean by that is, your culture can be above reproach, you treat people with dignity and respect, and kindness and caring, or you can treat them below the cultural line, which is exactly what you're talking about harassment and bullying, and a hostile work environment, and poison, and toxicity in the culture and a climate of distrust. So it's kind of easy when you think about that cultural line, and take a look at major actions they take and put them above or below the line. If you have, say, two things above the cultural line, but you've got 15 or 20 things below the cultural line, it's going to be a train wreck. It serves as a rapid assessment of overall health of the culture and organization.
It sounds to me like Activision needs a sweeping change of leadership. And they need a sweeping change of direction in terms of their culture. And with the resignations maybe that is starting to happen. But they also need to focus very purposefully on their people. It's interesting that most companies have strategic plans for the company business objectives but they rarely have strategic plans for their people.
Obviously in this situation they are in the middle of a massive cultural accident. What would you say though, to a leader of a company that wants to prevent something like this from ever happening in the first place?
Kevin: I've actually worked with companies in this situation who want to be proactive, and we develop a strategic plan for their people. It's a people plan. And in that people plan, we focus on a couple of different cultural dimensions. So one of those would be celebrations. How do we celebrate with our people? What do we celebrate? Do we celebrate birthdays? Do we celebrate life events, like marriages or unions? Do we walk with them when there's a death in their family, or there's an illness in their family or some tragic event?. Another area is called traditions. And so what kind of traditions do we want to create here? An example of a tradition would be eating lunch together. Traditions create belonging and connectedness. Another area would be growth and development. So what is our plan for developing and growing our people? Does each person have an individual growth plan? And as the manager works with them on that plan, are there classes that they're taking, books that they're reading, and training that we're providing them? Another key area is praise and recognition. So how do we recognize our people on a frequent basis? Because oftentimes, we overestimate the amount of recognition and praise we give, and we underestimate the power of it. Is there a timeline that managers and leaders meet with their subordinates on a regular basis to provide them feedback, and within that feedback provide recognition and praise? I could go one but that is a starting point of four quick and simple dimensions of a people plan, that give a company quick and meaningful steps to take to avoid a cultural train wreck.
When something does start to go wrong or employees come with a complaint to leadership, how can leaders handle that better than Blizzard Activision, who essentially dismissed and minimized their team?
Kevin: People have to be heard, and they want to be heard. If somebody goes to the HR department and files a grievance, there needs to be a process that the company goes through to vet it and legitimize it. And if they follow the process, they'll figure out whether this is true or untrue. Going through that process is the number one thing, and then number two is actually doing something about the outcome. If it is true or if it is false, action needs to be taken by leadership to deal with the situation. Instead of dismissing it, people need to know there is a process and we're going to follow the process and deal with the issue in order for them to trust leadership. I would also recommend providing training upfront to make sure there is more awareness of what harassment , bullying, and discrimination look like and how they can impact the company.
Some companies out there might be thinking “hey my company is totally fine, our culture doesn’t seem to have major issues, if something comes up we will deal with it”. What would you say to the leaders of those companies?
Kevin: I would tell them that a lot of times, we're blind to things. It's called problem blindness. We think, and we feel that our culture is healthy, but we don't really know. So let's find out. And so that's where our index comes in, where we can actually take a measurement on our culture, and really find out the data on culture and gain some insight. As humans it can be easy to overestimate things or underestimate things. Data takes this kind of squishy fluffy thing called culture and brings some concreteness to it. Let’s get proactive and get some black and white information to either verify that what we feel and what we think is accurate, or to bring up insight into areas we thought we were doing good at, but actually are a real pain point we need to work on.
Well Kevin, thanks for your insight into this cultural accident in the software industry and breaking down some ways companies can avoid it. We appreciate your time!
Kevin: Happy to help!