Practical Lessons from the Deep: Establishing Culture as a Competitive Advantage

By: Robert Haydock, CEO - AML Oceanographic

In my last post, I touched on how important it is to have an engaged team to deliver on our Brand Promise: We Make it Easy. Team engagement almost never happens without putting culture in the cross-hairs. In this post, I’d like to tell the story of our culture mishaps and mistakes, as well as our eventual success.

It’s a difficult moment when you realize that you are responsible for mismanaging something of tremendous value.

Such was the case with culture at AML. As CEO, it took me five long years to realize that organizational culture can be an unbeatable competitive advantage. It took another five years of systematic focus – blood, sweat, and tears – before we were able to establish the kind of intentional culture that delivers on that promise.

Culture as a competitive advantage needs a foundation; that foundation is core values. Naming core values is easy – deceptively easy – but making those same values alive on a daily basis is incredibly difficult. I learned that lesson the hard way. At AML, we bumbled through the process – two steps forward, one step back – for many years before we finally turned culture into a source of advantage.

Culture is built on core values that are alive. How do we know if core values are alive?

Posters on a wall – those visually arresting pictures of committed employees striving for lofty goals that you see in so many reception areas – are not an indicator of values aliveness. In fact, they probably demonstrate the opposite. So what is a reliable indicator of core values aliveness?

One such indicator: can all members of the leadership team name and explain the company’s core values at all times, without prompts or mishaps, in the same way? That makes for a good first step, but it is nowhere near the entire journey. What if every employee can do the same? Does that mean that culture is defined, alive, and likely to become a source of advantage? Possibly, but not likely.

A stronger indicator of values aliveness is when all employees enthusiastically recount stories and examples of their colleagues demonstrating the chosen core values. At AML, this happens daily during our morning huddles, with the monthly tally of such values nominations in the hundreds. It took many, many years for us to get to this state.

Change never happens without discomfort.

AML began the journey towards intentional culture when our leadership team picked six safe, “vanilla” core values. Henceforth, AMLers would be:

accountable
have integrity
be customer focused
constantly strive for higher
be open to new ideas
be process minded

Up went the posters! And what happened next? Nothing. Absolutely nothing. No sudden surge in revenue; no dramatic increase in customer net promoter score; no amazing competitive advantage.

Over the first two years, the announcement of our AML values had zero impact. Why? The answer was simple. I had failed to create an environment where there were rewards for living the values and consequences for ignoring them.

“That doesn’t align with our values” is a phrase fraught with undercurrents, the start of a conversation that nobody wants to have. To bring values to life, however, leaders need to be ready and willing to wade into difficult conversations at a moment’s notice.

Two years into our journey we realized that the journey hadn’t even started. The train had yet to leave the station.

Fit becomes mandatory.

In order to get traction, we declared that all employees were required to live all of the core values, and that values fit was a make or break condition of employment. We set out to create a company of employees with homogeneous core values: we would hire, fire, and reward based upon fit.

This time the, values were not vanilla: they were specific, and designed to reflect the recipe for success at AML. We also realized that six values were too many.

The updated version of our values – Values 2.0 – tightened the list from six to four. More importantly, we did all the difficult, uncomfortable things that are required to get lift off:

We educated.
We challenged.
We asked awkward questions.
We had difficult conversations.

For example, we forced the process of sharing values stories every morning in our daily huddle. As mentioned in my last post, “Practical Lessons from the Deep: Growing an Ocean Tech Company,” AMLers were at first incredibly uncomfortable with recognizing each other’s contributions in public. They were even more uncomfortable doing so in a way that tied that recognition to specific values. To many, it felt stilted and fake. When necessary, we would stand in silence for as long as it took for somebody to nominate a colleague for a display of core values. We even created a count of values nominations to drive focus.

We also incorporated core values into our performance review process. In every review, we asked our team members to self-rate on values fit using a traffic light system:

Slowly, we got traction. C players self-extracted, furthering alignment. We saw corresponding improvements in team energy, efficiency and effectiveness. Commitment to our goals grew dramatically. Most importantly, the laughter quotient grew exponentially.

Ownership is everything

Values 2.0 were a huge step forward, but we made a critical mistake. These values were again selected by the leadership team and not by the company at large.

Over a four year process, our team had aligned on a series of critical concepts related to what type of people we wanted on our team. We had made incredible progress, but our employees didn’t feel ownership for the values that had been selected. In retrospect, it was obvious: how can you own something that you’re not part of building?

We realized that our values – and thus our differentiated culture – would never be truly alive if the values were ‘imposed’ from above.

This time, the entire AML team was invited to participate in updating our core values. Very specifically, I was the only AMLer that was excluded from the process. I had – finally – learned to trust that the AML team was versed enough in values and culture to update our operating system without my meddling influence.

We established three roundtables, asking employees what they wanted AML to stand for. The process was slow, difficult, and at times challenging. We had to push back on impatience to ‘get the job done,’ knowing that unless every employee understood each core value in exactly the same way, there would never be alignment. AMLers were pushed to explain – in great detail – what their preferred traits looked like, tasted like, and smelt like.

Today, at the end of a five year journey, I can say our core values are both clearly articulated and incredibly alive. I know that every AMLer can provide myriad examples. I am confident that our recruitment process screens out candidates who don’t fit our operating system. I know we make expectations crystal clear and that the A players on our team are motivated to rise to the challenge.

And I know, without doubt, that our culture – and the people that form it – has become our number one competitive advantage.