The power of culture

Culture,” said Peter Drucker, “eats strategy for breakfast.” As law firms navigate choppy post-Brexit seas, their culture will be a great determinant of whether they dock safely or hit the rocks. The millennial generation thinks differently about employment. Not for them dreams of the gold watch. They prize mobility and flexibility. Professional development matters as much as money. They need to feel that their views matter, their organisation is a force for good, and through it they can make not just a living, but a worthwhile contribution to society. A great culture is no longer a nice-to-have. It is fundamental to competitiveness.

It is tough to create. As Frederick Palensky, for almost 40 years CTO of 3M said: “Cultures are built up a brick at a time, over decades. You need consistency; you need persistence; you need gentle, behind-the-scenes encouragement in addition to top-down support. And you can lose it very quickly.”

Culture has been well defined as “how we behave when no one is looking”. It is a reflection of the values we live by, not just talk about. In recent years, I have been lucky to work with many different firms, from members of the global elite to young start-ups. Despite their differences, building a great culture means similar things to them all:

Transparency

We commit to an organisation when we feel well informed about its strategy, its challenges, how it is performing, and that our views on the way it is run matter. Autocrats may succeed for a time, but they stunt their own growth and sooner or later implode. I give you Sir (for the moment) Philip Green, a man who the Sunday Times reported on 31 July carries only £50 notes and who ended one meeting that did not go his way by throwing a stash across the table shouting, “I’m Philip f****** Green!” Undeniably, he was correct, though it may turn out that his chosen descriptive verb would have been better expressed in the past tense. By contrast, the best leaders put clarity, candour and some humility at the top of their agenda.

Walking the floor

A hallmark of all great leaders is that they spend as little time as possible behind their desks. Regular face time with colleagues, scheduled and unscheduled, and genuine interest not just in what they are doing but what is going on with them personally is incredibly powerful. They meet regularly with key groups and individuals, keep them well informed about what is happening in the business, invite their ideas and ask what they can do to help. They listen much more than they talk, and act decisively on what they hear.

Collegiality

Like the yeti, true collegiality in law firms is much talked about, but not often seen. As I have said before, “collegiality” is often a euphemism for tolerance of mediocrity, and unwillingness to confront the need for change, either in the direction of the business or individual behaviour. Conversely, star performers are often prone to selfishness and possessiveness. This is one of the most difficult challenges leaders face, and it needs real determination to create a culture of “My firm first, me second”.

David Maister suggests that firms write their own constitution, setting out the values to which all must commit, including: “We will make all decisions based on putting the clients’ interest first, the firm’s second and individuals’ last. We do not accept people who fail to operate in this way. We will, individually and collectively, operate with a ‘stewardship’ mentality towards the firm.”

Such a constitution would be valuable to any business, but it may be especially potent in our world, where adherence to binding written obligations is so fundamental. Even mobile millennials ought to have no difficulty in committing to leaving the business in a better state than they found it for those who follow.

Fairness

Nothing is more corrosive than the perception that a business does not treat its people fairly. Appraisal and reward is a hot topic, as firms move from traditional lockstep to more merit-based systems. This is a complex area, to which I hope to return, but the principles are straightforward:

• The system must be clear. What are each individual’s objectives? How is success measured? Who makes the judgments and by what process?
• There are many ways to contribute and all must be given due weight. Short-term billing performance is not the be-all and end-all.
• For people in management, it is team, not individual performance that matters.
• Evaluation should be continuous, with mentoring and support as needed, not a retrospective once a year, which can often be formulaic and, frankly, pointless.

Is your firm a place to feed your soul, or just earn your corn? If you hesitated even for an instant, your culture, and hence your future, may be a bigger issue than you think.