Build culture in layers from behaviors up, then audit it

1. Culture is a system you run

In this view, culture is not a poster, and it is not even your values: values mean nothing without something in place that enforces them. Culture is the way a business enforces, recognizes and hands out consequences. Most founders, in this view, treat culture as a matter of mood or of values; here it is treated as a matter of systems: you need a system to tell people what matters.

So the working questions are about what the business does, not what it claims:

• Which behavior earns a reward, and which earns a penalty?
• What has consequences, and what goes without them?
• What do people get recognized for?

What counts, in this framing, is what the business reinforces and enforces. What it says counts for very little.

A definition built on the rules that decide what gets reinforced, with the reinforcer spelled out, is section 1 of SOP 257 — Name the rules your sales culture reinforces and tolerates. A shorter wording, the rules for good and bad behavior in a company, opens SOP 88 — Pay and rank reps on show rate.

2. Why a list of values does not work

What founders tend to do. A lot of people write down five values, put them on the website and on a poster, bring them up in hiring and again in onboarding, and then hope hard that people live by them. Some of you will recognize this and some of you will not. If it fits you even slightly, you could do better: you might not be doing this badly, and you might not be doing it brilliantly either: you sit between the two, and there is always room to move toward the end that helps the business grow.

What happens instead. None of those steps decides the culture. What you do decides it; people pay attention to that and give little weight to what you tell them. They absorb a culture from what goes on around them.

In one example, a team is told something of this kind: at an event, what is said on stage counts for less than what goes on around it: whether people are greeted as they come in, whether anyone shakes their hand, knows their name, or knows something about their business. If none of that has happened, credibility is lost once someone stands up to speak. A business works the same way. In another example, a newer teammate saw the owner clear up a small mess at a team gathering when, as he said afterward, nobody was watching, and later he was the one clearing up after a meeting. People copy what they see.

What you put up with sets the bar. A culture ends up as whatever you put up with, and the worst conduct you let pass sets everyone's standard. You cannot be permissive. Try it now: think of whoever on your team is the worst. That, in this view, is your culture.

Hiring and firing for fit. Anyone in one company, it is claimed, would tell you that hiring and firing for culture is harder than anything else. In this view it also matters more than anything else. In one case, an owner saw that several people plainly did not fit, told the leadership team they had to go, and let them all go at once. Afterward, by that owner's account, everything got better. The point is that you enforce a culture through your actions.

That what you tolerate is what your rules are is section 3 of SOP 257. That the people you hire, promote and let go send a message almost louder than anything you say, and that people, in general, watch what you do far more than what you say, is section 8 of SOP 168, on repeating the values as a company grows. That a trained team is kept performing by culture, and that a lazy team reflects the culture its leader set, is section 7 of SOP 243, where selling is treated as a skill that can be trained.

3. The four layers

Four things together create a culture. They are numbered 1 to 4, with the behaviors as layer 1; the mission, layer 4, is the top, where most founders are said to begin:

Layer	What it holds
1. Observable behaviors	What people do from day to day: the way they communicate, reach decisions and treat one another
2. Rituals and systems	Recognition programs, meeting rhythm and feedback loops, which are the structures holding behavior in place
3. Declared values	The three to five principles you say you run on; unless they agree with layers 1 and 2, they are empty
4. Purpose or mission	The reason the company is there beyond making a profit; the vision that brings people together

Most of you, it is expected, will recognize layers 3 and 4: a mission, a sentence you say to people, three to five things you claim the company lives by. Layers 1 and 2 are the ones people find puzzling, and they are the two usually missing, especially in a company trying to scale.

4. Build from the base, and build all four

Most founders begin at the top: they draft a mission statement and settle on values, and are then puzzled that nobody cares and nothing sticks. A second mistake sits beside that one: founders who begin at the bottom and then cannot see why nobody believes them. The answer here: you build from the bottom upward, and you still need all four layers. Having one without the others does not work.

5. What each layer asks of you

The layers here run from the top down.

The mission, as one sentence. What is the company for, apart from profit? Put the answer in a single sentence. What makes this hard for people, in this view, is the belief that the sentence must be flawless. Begin with wording that means something to you and that you like saying, and do not turn it into a grand statement.

Values: how you get there. The values have to line up with the mission. The mission answers where the company is headed and for what reason; the values answer how it gets there. In one example, an owner checks the values this way: being the reverse of any one of them would not take the firm where its mission points.

Rituals and systems. In a culture these come about either on purpose or by accident, and they are running in your business whichever it is. The question is whether you know what they are and whether you built them deliberately. They include recognition programs, meeting cadences and feedback loops: structures that reinforce behavior.

The comparison here is training a dog. When a dog leaps up at you and you shoo it off, that is a feedback loop, a small bit of friction, a tiny consequence, and so the dog stops jumping. Give it a treat each time it sits and that is a feedback loop too; it wants more treats, so it sits more. Some people's dogs run wild; others behave very well. The same shows in people: someone whose dog behaves well comes across, in this view, as someone who would lead well, because they are stronger at training people and at enforcing systems.

Observable behaviors. What people do on an ordinary day: how they communicate, how decisions get made, how they treat each other. This layer is called the values amplified.

That a lot of cultures begin to come apart once a company reaches a certain size, because they formed by accident and not by intention, and that what already works should be put into operation, is section 7 of SOP 173 — Choose a human-resource information system.

6. Audit your layers

This is set as a three-minute exercise. Write the answers down.

1. Layer 1. List the three behaviors seen most often across your company, whether they are good or bad.
2. Layer 2. Which of your systems push those behaviors along, and which push against them?
3. Layer 3. Set your stated values beside layers 1 and 2. Do they agree?

The kind of behavior to write down. Some examples show the range: a lot of people arriving early, answering fast, speaking plainly without jargon, and being very hard on themselves, which is not necessarily a good thing every time.

Systems that reinforce, and systems that push back. One firm has a rule that ties a small standard for a shared space to a consequence for everyone: when someone breaks it, the space closes for the day, and it opens again once someone owns up to it. It is used there to reinforce one of that firm's values, and honesty besides.

For each of your three behaviors, ask whether a system reinforces it, or works against it when it is a behavior you do not want. Some of you have common behaviors you dislike and nothing that pushes back on them, so they go on and you allow them. Then you are a permissive leader, or the leaders under you are permissive: people who hold back from defending the culture out loud, fearing what speaking up would say about them and the bad feeling it brings, and more worried about their own comfort right then than about upholding it.

7. Read the gap

When your words and your people's actions point different ways, the trouble is not the culture; it is enforcement.

Be brutally honest here. An example, offered as a joke: if honesty is your stated value but the only people you reward are the ones who agree with you, your real value is flattery. The distance separating your declared values (layer 3) from the behaviors you see (layer 1) is the job ahead of you. Write it down.

Who is mirroring you. Looking at the behaviors a company lists, it is telling, in this view, to ask who is reflecting the leader's own behavior, since a company is often its leader, magnified. With your list in front of you, decide what you want to enforce and what you do not.

Finding where you yourself hold the business back, and what the team copies from you, is SOP 263, which looks at the founder as the limit on the business and at the team as a mirror.

8. What this page does not decide for you

• Which values. The example firm's values and mission are not covered on this page. Finding the values you really hold, and making them non-negotiable, is SOP 260.
• The three minutes. They belong to the exercise. This page gives no figure for how long a full audit should take.
• How to close the gap. Enforcement is named as the problem and the gap as the work; acting on particular people is SOP 259, and recognition is SOP 261.

9. The checklist

Step	What to do
1	Ask what your business rewards, punishes and recognizes, and what carries a consequence
2	Name your four layers: behaviors, rituals and systems, declared values, mission
3	Build from the behaviors upward, and make sure all four layers exist
4	Put the mission in one sentence that resonates with you; do not wait for a perfect one
5	Check that the values describe how you will reach the mission
6	Write down the three most frequent behaviors in the company, good or bad
7	For each, name the systems that reinforce it or push back on it, and note any behavior you dislike that nothing pushes back on
8	Hold your stated values against the first two layers
9	Treat any gap as an enforcement problem, write it down, and decide what you will enforce
10	Ask who on your team is the worst; in this view, that is your culture

10. What this page does not cover

Sorting the people you have by how well they hold the values and how well they perform, and how to act on each group, is SOP 259. Which values you hold, and how to find them, is SOP 260. Recognizing people for living the values is SOP 261 — Build a recognition rhythm that rewards values, not results. Writing a vision large enough to take in what each person on your team wants for themselves is SOP 262.

Employment law is not covered on this page.