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0:00:02.4 Freddy: Welcome back, Culture by Design listeners. It's Freddy, one of the producers of the podcast. In today's episode, we're going to talk about micro-cultures and the single most important variable for psychological safety. Today's episode covers a lot of ground and offers an exclusive look into some of the insights we are finding from our global survey database on psychological safety. Tim and Junior will also bring up the concept of cultural accountability and how you can keep your leaders culturally accountable.

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0:00:32.1 Freddy: I hope this episode gives you more data and business cases to use as you bring psychological safety into your teams. If you enjoy today's episode, leave us a review or share it with a friend, it helps us accomplish our mission of influencing the world for good at scale. As always, links to this episode, show notes can be found at leaderfactor.com/podcast. Enjoy today's episode on micro cultures and the single most important variable for psychological safety.

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0:01:06.0 Junior: Welcome back, everyone to Culture By Design. My name's Junior, I'm here with Dr. Tim Clark, and today we'll be discussing micro-cultures. Tim, how are you.

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0:01:14.6 Dr. Tim Clark: Doing great Junior, Good to be with you.

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0:01:16.6 Junior: Likewise. I'm excited for today's conversation. Culture is everywhere, it's all around us. We swim in it constantly. Today we're going to define it and explain the levels at which it lives, and we'll explain the most important level of culture, the micro-culture, and will back that up with survey data that's brand new coming out of leader factors culture diagnostic tool. So in my estimation, this episode will equip you as a listener with additional tools and insights to affect the cultures around you, not just to affect but understand. I think it's very important that we understand and then we can move into affect. And if you're working in this area on behalf of an institution, we'll tell you where some of the quick sand is, and we will save you a bunch of time. So Tim, let's jump into this. What is culture? 

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0:02:06.1 Tim: Culture is the way we interact. That's the way that we define it, four simple words. Now, that may seem overly simplistic to a lot of people, and you may be thinking, well, hang on a second, what about all these other things that are part of culture, your rituals and your rules, and your routines, and your language, and your attitudes and your values and your traditions and your customs and all of that. Right? But as we have said again and again, all of those things come out at the human interface when we're interacting. The interesting thing about culture, Junior, is that it's surprisingly difficult to be aware of our culture, to be able to analyze our culture and to change our culture. Infact, may I share an example? 

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0:02:58.1 Junior: Please.

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0:03:00.1 Tim: And I just thought about this the other day. So it was back in 2005 when David Foster Wallace gave a commencement speech at Kenyon College with what is now a pretty famous speech that is called, "This Is Water." And as we like to say, "Fish have water, humans have culture." The fact that we swim in it is obvious, and yet we're shockingly unaware of the culture around us. So in this speech, which is now famous, it begins this way, David Foster Wallace says, "So there are these two fish swimming along, and they happen to meet another fish swimming the other way, who nods at them and says, "Morning boys, how's the water?" And the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes, "What the hell is water?" That's the way that this speech begins, What Does It Illuminate? It illuminates the fact that we swim in culture, but we often are shockingly unaware of the nature of, that we are swimming in water, number one, and the type of water that it is. So we're going to explore that today. [chuckle]

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0:04:14.9 Junior: I love it. And I guess part of the aspiration today is to become like the wise old fish to understand culture, to acknowledge it, and then to see how we can affect it.

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0:04:24.8 Tim: Exactly.

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0:04:26.1 Junior: So let's go to the next level and talk about the culture formation hypothesis. So culture is the way we interact. We do that at different levels, and that rolls up into different cultures, different types of cultures, and we'll go through some distinctions. But here's the culture formation hypothesis, a pattern of thought or behavior in an individual is a habit. So I do things a certain way, I think a certain way over and over again, and that becomes habitual. A pattern of thought or behavior in an organization is a norm. So as a team or several teams think a certain way, do something a certain way over and over, we have a norm. A collection of these norms in an organization is a culture. You'll hear me use the word organization over and over, that's largely the context that we'll use today. Of course, culture exists anywhere there are humans. But we're going to be talking mostly about professional settings, teams and organizations.

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0:05:24.1 Tim: Hey Junior, let me just make a comment here that it's interesting. So you're outlining the anatomy of culture as you talk about a habit, a norm, and then a collection of norms. One of the things that people don't often realize, they don't understand, is that when you bring humans together and they start interacting, culture begins to develop instantaneously in the form of norms, where they begin to interact in a way where they're sharing behaviors. Right? So they're sharing this pattern of behavior, that's a norm. Those norms begin to develop instantaneously when people come together for the first time and they start interacting. So it's not, "Oh, okay. This is gonna take a while to form." No, it begins immediately. It's astonishing how fast it starts to form.

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0:06:28.6 Junior: Yeah, thanks for calling that out. And pay attention to that. Next time you're with a group of people, see what norms emerge and how quickly they do, and it's especially helpful if you can just be a fly on the wall and watch other people getting together for the first time and start to see them engage. I was at a full-day workshop yesterday, and I observed this firsthand, and it was very clear to me the norms that were emerging as I kind of step back, played third party and observe what was going on. Fascinating.

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0:07:00.4 Junior: So we have habits, we have norms, we have a culture. Now, let's go into culture a little bit more. There are different levels or distinctions inside culture, and these can be a little bit amorphous, they can be a little bit ambiguous, and some of it it's semantics, but there are three categories that we're going to talk about today that I think will help frame the conversation. The first is macro culture or dominant culture. What's a macro culture? It's sometimes referred to as the mainstream culture, it represents the broader, more encompassing cultural norms and values that prevail in a big group, a society, a country, an organization. It includes the commonly accepted beliefs, the customs, the language, tradition, social practices that the majority of the population follow.

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0:07:51.9 Junior: Now, the majority here, I think is the important word, because we might have a macro culture of a million people, or of 10,000 people, the majority might be 6000, but what about the other 4000 that aren't in the majority. They're part of that macro culture, but their beliefs, customs, language and traditions might be a little bit different than the other 6000. And so we go another layer down. Tim, what's the next layer? 

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0:08:21.5 Tim: Next layer down is a sub-culture, Junior. So as you said, so a sub-culture lives below the macro culture, whatever that macro culture may be. And there can be several layers of sub-culture depending on the size and the complexity of the organization or the institution, and if you're talking about a society, then of course, there will be many sub-cultures. There's a lot of complexity in a society, of course, that's the most complex configuration of culture that there is. The point is, though, is that we have this distinction between the macro culture and the sub-cultures, and they exist at different levels, They share some of the same characteristics as the macro culture, but then they have a lot of their own characteristics, which distinguishes them from the macro culture.

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0:09:16.7 Junior: So the sub-culture, this is interesting because depending on the lens you're looking through, something might be a macro culture and a sub-culture. Right? 

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0:09:26.7 Tim: That's right.

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0:09:28.2 Junior: If we're looking at an organization, it lives inside a bigger culture, which lives inside a bigger culture, and so depending on your frame of reference, you could be part of multiple at the same time. So the next layer is a micro culture, and this is a culture of a group that's smaller than the macro, smaller than the sub-culture. This is the smallest level, it's the smallest level of culture. So Tim, you've talked about football teams, I think that this is a helpful analogy. Will you take us through that? 

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0:09:57.8 Tim: Sure. So a defining characteristic of a micro-culture is that it's based on direct human interaction, so there's direct connection, direct interaction. So when I was in college, I did actually an ethnographic analysis of our football team, the university, the Division 1 football team of which I was a member, but I also had a higher level cultural anthropology class, and we had to do a project, and so I did it on the culture of the football team.

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0:10:36.2 Tim: So let me go through the anatomy of culture on a football team. So you have the macro culture of the entire team, the entire unit that, the institution of the football team, then that breaks down into offense and defense. And they each have their own sub-cultures, and I won't go into all the details, but there are tremendous differences between the offensive sub-culture and the defensive sub-culture. And then we further break down into the smallest units of culture, the micro-cultures, which existed at the level of a position coach, and that coaches players. So let me give you an example or some examples from the offensive side. So on the team, there were, for example, four quarterbacks, those four quarterbacks have a coach, so the coach and those four quarterbacks represent a micro-culture, and then there were the offensive linemen.

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0:11:44.0 Tim: The offensive lineman, that's a little bigger group. There were about 12 offensive linemen, 12, plus they had actually two coaches. So now we have two coaches plus 12 offensive linemen. How about the receivers? The receivers, we had about eight receivers and they had their own coach, and so they represented their own micro culture, so do you see how that works? The team, offense and defense, and then positions, position players with their position coaches. That's just one example of how culture breaks down from macro to sub to micro.

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0:12:24.9 Junior: Very helpful. And those sub-cultures can form based on various factors, so in this case it was structural, you had the quarterbacks based on their role there together. But it's not just based on role, it could be other things, shared interests, hobbies, profession, ethnicity or religion, generation, geography, a whole bunch of things that could dictate the level of micro-culture or sub-culture that exists. So for our intents and purposes today, when we say micro culture, we are most of the time going to be talking about a single intact team as compared to department or an organization. Why are we going to do that? Because humans interact, professionals interact day-to-day at the level of the micro-culture, that's what has the most effect on their behavior, and that is what they most affect as individuals. It's where you live. And so what micro cultures do you spend time in? And think about that for a moment. Which micro cultures do you spend the most time in? Is it a micro-culture at the level of a family, a partnership? Is it a micro culture at the level of social group, a really small group of friends that has some shared interest, is it... Are these long relationships, are they temporary? It's interesting, once you look at a day in your life, you unpack it and point at all of the micro-cultures that you stepped into throughout the day. Very interesting.

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0:14:03.3 Tim: Yeah, we go in and out of micro cultures, don't we Junior? In the course of a given day. So micro cultures, there are many, they have permeable membranes. We go in and out of them. As I said, this is the level at which we live life, and so if you want to do an interesting exercise, just document a day in your life and write down, identify the micro cultures that you spend time in, and it could be that you spend time in 10 different micro-cultures in the course of a given day. That's fascinating. Each one of those is different.

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0:14:43.3 Junior: Yeah, each one of those has a very different set of norms, some might be similar, but chances are, if you go to 10, that you're going to have a huge spectrum of norms that dictate the behavior of the people inside those micro-cultures. Now, the micro-culture is the level at which we have the most leverage, it's where the most interesting things happen, and why do we think it's the most important? Because the data also says it is, and we're going to get into that.

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0:15:13.9 Junior: So let's jump into some of the data that has helped inform our opinion about why micro-cultures are the most important and actionable places inside organizational culture. So for the last three years, almost four years, we've been surveying organizations around the world across industries, thousands and thousands and thousands of people using the four stages, culture diagnostic. What do we measure? It's a 12-item scale that measures psychological safety across the four stages. Now, what we started doing in addition to gathering data across those 12 items, was to gather demographic data, and this is where a whole bunch of interesting stuff started to happen. So we started to gather data on geography, tenure, age, function, ethnicity, performance rating, a whole host of demographic variables that the organizations volunteered and said, we want to gather data across these demographics.

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0:16:25.6 Junior: So this is an unwitting to the participants. It's something that the organization said, Hey, we wanna include this in our analysis and roll it all together in an anonymous way and see what the data says about these demographics. Then we created all of the reporting tools to be able to do this, all of the analytics necessary to get value out of that data, and what we found was incredibly interesting. So if you took the average person and said, "Hey, which of these variables, do you think most affects psychological safety?" And you gave them this list, geography, tenure, age, function, ethnicity, let's throw in gender, let's throw in team assignment.

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0:17:16.4 Junior: Which of those do you think they would choose? A lot of those are pretty compelling and logically, you can make a case for a lot of those. Well, tenure, that's going to affect your experience quite a bit, your age, your ethnicity, that's definitely going to affect things. Your geography. Yeah, it could be one of those. Guess which one it is? It's none of those, it's team assignment. It's team assignment. The primary driver of culture at the micro-level is what team you're on. Isn't that interesting, Tim? 

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0:17:46.5 Tim: It is. Well, Junior, let's go down a layer. Why is that? 

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0:17:50.5 Junior: Why is that? 

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0:17:51.5 Tim: Why is that? It is a team assignment by an order of magnitude beyond any other demographic variable. So listeners, please, please make note of this, team assignment is by far a more powerful variable in understanding variants, in understanding the nature of the culture and the nature of the experience that you'll have. Why is that? Junior, do you want to jump into that and help us understand that a little better? 

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0:18:23.0 Junior: Yeah, so let's talk a little bit more about the analysis. So we assess psychological safety based on those 12 items. And then we correlate those scores and the variability of those scores to these other variables, all of the demographic variables, and we're saying, what effect does geography have on the scores? What effect does function have on the scores? And we're looking at variability. So each one of those demographics that we mentioned, geography, tenure, gender, function, etcetera, has less effect on the variability of psychological safety scores, than the variability that ties back to distinction between teams or the manager. Why? Is Tim's question. Because that person sets the tone for their micro-culture, their little bubble, their little piece of the world for better or for worse, and what's really interesting when you start to see the data is you could have two teams that are in structure, identical. Identical, same number of people, same geography, same function, same responsibilities, same tenure, same everything else, and then you shift one variable, the manager, and you massively change the scores.

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0:19:43.2 Tim: Yeah.

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0:19:43.7 Junior: Or at least have the potential to massively change the scores. And that's what we see all the time. These two teams that are sitting right next to each other, they're in the same office, they both have six people, they're both in accounting, they both do the same thing, but yet their psychological safety scores, one might have just massive red zone and another has massive blue zone. Incredibly unhealthy, incredibly healthy. So why? The intact team doesn't absorb the general or the average macro culture in the day-to-day. They might be influenced by it in a general sense and over time, but they don't adopt it and let it dictate their day-to-day norms. And think about this, just your own experience, test this as a hypothesis, see if it holds water in your experience. Would you say that the culture you've experienced in the workplace has been mostly dictated by your direct supervisor? Would you answer yes to that question, or do you think it's one of those other variables? Well, we know what it is based on the data. But based on your experience... Based on my experience, I'll say, absolutely.

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0:20:49.8 Tim: Yeah.

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0:20:51.7 Junior: Absolutely, it's somewhat... The micro-culture can be somewhat or very much divorced from that macro-level culture and operate with a tremendous amount of independence and with a lot of isolation for better or worse.

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0:21:04.8 Tim: So Junior, I think we have a hypothesis that we've been testing and I think we have validated... We have confirmed the hypothesis, and the hypothesis is that the leader of a team, the direct supervisor at the micro-culture level is the primary cultural architect for that Micro Culture. Now, of course, as you say, there are other factors that influence that Micro Culture that shaped that micro-culture, that have an impact on that micro-culture, but the biggest factor, the biggest single factor is the modeling behavior of that direct supervisor, because remember the distinguishing characteristic of a Micro Culture is that this is where you have direct interaction with other people. If you think about a sub-culture, you may have some direct interaction some of the time, but you're going to have a lot of indirect interaction, and then at the macro-culture level, its culture at a distance, right? Now, does it cascade down and have an influence on you? Sure, it does. Based on the prevailing norms across the institution, but it's indirect. It's not direct interaction. If you're on a team, you don't have direct interaction with everybody else, by definition, and the sub-cultures, you may have a little bit of direct interaction, for example, when you are a member of a cross-functional team or maybe you're working on a project or something like that.

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0:22:49.3 Tim: But outside of those experiences, it's not direct interaction. How about your micro-culture? Very different. Your micro-culture is where you live professional life, it's where you have direct interaction with other humans every day, so you can see how the direct supervisor... That direct supervisors modeling behavior is the single most important factor in culture formation, that's what we found. Junior, anything that you'd add to that? 

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0:23:27.4 Junior: I would add a little bit of the why. Why do they dictate so much the micro-culture? Because largely they hold the keys of reward and punishment when it comes to vulnerability, that's, the accountability inside an organization goes up, so the members of the team are accountable to their direct supervisor. That interaction, that hierarchy is the mechanism by which that culture is largely dictated, and so if I ask a question on my team on active vulnerability and the supervisor punishes that active vulnerability and says that's a stupid question, they're dictating the culture in a way that the peers can't with each other.

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0:24:17.5 Junior: And so if you look at the ratio of influence, I don't know exactly what this is, but it's not going to be equal peer-to-peer and peer-to-supervisor. That deferential, that difference is very important. And so maybe the supervisor is accountable for 80% of that Micro Culture, but it's not equal, and I think that's a really important point. So think about the accountability structure, think about the reward punishment mechanism for vulnerability, and pretty quickly, I think it becomes obvious why that supervisor plays such a role. Now, here's a truism from Tim, teams don't outperform their leaders, they reflect them. Teams don't outperform their leaders, they reflect them.

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0:25:05.3 Junior: What does this mean? A lot of things, but it does mean that leaders will always be the cultural bottleneck, and so we don't have teams that have really, really healthy peer-to-peer relationships, and then have really toxic managers, and then also state high psychological safety when they're assessed. It doesn't happen. It doesn't happen. And so you really do see the cultural competence of that leader reflected in the data of the team, and I don't think that this can be overstated, what we're saying here is that the manager, the leader, dictates the culture for the micro-culture, that can't be overstated. It has a lot of implications, some of which we'll get into today.

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0:25:58.1 Tim: Well, Junior, there's also the positive side of that premise, so as you said, the leader will always be the cultural bottleneck at the micro-culture level, right, at the level of a team. The leader can also be the cultural accelerator that really moves it forward, that transforms the prevailing norms on that team and helps that team accelerate to another level, to another place. So isn't that the good news too? 

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0:26:34.9 Junior: Well, there's an interesting element of multipliers in here, and this is where so much of the leverage lies that I think is really interesting. So consider this scenario, you have a team of 10 people, nine of the direct reports have a really toxic. The peer relationships are really bad, and they get a new leader who's incredibly healthy, that leader can very likely turn around the norms of that team, and turn that team into a healthy team. Now consider the flipside, 10 people on the team, 10 peer relationships that are really, really healthy, and you transition the leader out and put in someone really toxic.

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0:27:20.8 Tim: Yeah.

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0:27:21.5 Junior: What happens to the team? 

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0:27:23.3 Tim: Yeah.

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0:27:25.3 Junior: Toxic.

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0:27:25.4 Tim: Toxic.

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0:27:25.6 Junior: Cultural non-performance. So you see the importance of the leader and just how much influence they have, and so it's an interesting opportunity for us to be very introspective about the teams that we lead, our cultural role in leading those teams, and we have to acknowledge, which we'll get into in a bit that each of us is a cultural architect and we will be dictating the norms for the micro-culture of which we are a part. That's a really important thing.

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0:27:56.2 Tim: Yeah, and Junior, I'll just add one other thing. This isn't to say that the other members of the team don't have a big influence on the culture, just because you're not the team leader, you're still a cultural architect in your own right? You have that responsibility. What we're saying, however, is that if you occupy the leadership position, you have a heightened role, you have scalable influence by virtue of your positional authority. We can't ignore that, and it really does come out in the data Junior, as you mentioned.

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0:28:33.7 Junior: Yeah, and it's a somewhat depressing tale, depending on how you look at it, but for me, the way that I see it, it's tremendously optimistic, gives me a lot of encouragement because I know where my leverage lies. I know where I can go to get a predictable outcome.

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0:28:49.7 Tim: Yeah.

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0:28:51.3 Junior: And if I have finite resource, and I wanna be very intentional about where I spend it, and here's where some of the, will save you some time comes in, if this is your job, focus on the leaders. Focus on the leaders and the micro-cultures. If all the work we do just happens at the level of the macro culture and we're trying to affect this big institutional amorphous culture, we're gonna have a really difficult time getting that to translate and cascade all the way down to the bottom of the organization.

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0:29:23.1 Tim: It's very true.

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0:29:25.9 Junior: So let's get into some of the practical, let's get into how do we build better leaders, how do we solve some of the cultural problem if it is unhealthy, if it's less than desirable, I think that... Here's an important distinction, we've talked about this a little bit before. There are two types of competence, technical, we do this pretty well most of the time, cultural, we usually don't do this very well. That distinction is very important. We must build cultural competence in our leadership, not just technical competence, but Tim, is that... What are the patterns that you see here with organizations and the ratio of attention between technical, cultural? Help me understand some of the patterns.

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0:30:14.9 Tim: Well, if you look at the development efforts of most organizations, they spend the vast majority of their time on the technical aspects of leadership, on technical skills, process structure, technology, policies and procedures, things like that. Now, that's really important, it leads me to the distinction between the two kinds of accountability, right Junior. There's performance accountability, and there's cultural accountability. Performance accountability focuses on the outcomes that we're looking for for the business, and we track that using our KPIs, our performance metrics, and we're good at that. We measure people's performance that way, we evaluate them that way, we often do most of the rewarding on that basis, so we're very good at performance accountability in most organizations.

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0:31:17.7 Tim: How about cultural accountability? How about the other side of the ledger? Cultural accountability refers to how you get things done, how you interact to produce the results that you do. In many organizations, we hardly even pay attention to cultural accountability unless there's some egregious violation, people are being very destructive in the way that they're treating others, but most of the time we don't... And we don't have metrics, we don't have key performance indicators by which we measure cultural accountability, and often when someone violates the values or the established norms of the organization culturally, we kind of nod it off, we wink and we don't really hold them accountable.

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0:32:14.6 Tim: So this is a question you can ask yourselves, how well do we do cultural accountability in our organization versus how well do you do performance accountability in your organization? Right. That distinction is pretty eye-opening in most organizations, and we can see pretty quickly that we're deficient on the cultural side of accountability.

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0:32:42.9 Junior: I think it's really helpful language, because if you ask most organizations, they're just going to use accountability as a blanket term. And when you ask them, Well, what are people accountable for? They'll probably say, performance.

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0:32:56.0 Tim: Yeah.

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0:32:58.7 Junior: We have this general idea of accountability and this general idea of performance, and what we are saying is there's a language change, a language addition that needs to be made, and we need to get a little bit more specific. So in accountability, as Tim says, performance accountability, cultural accountability, how are we doing in cultural accountability, how are we doing in performance accountability? Just that language edition, I think is really, really helpful. And if you look at all of the accountability mechanisms, if you then followed up your, what are you accountable for question with what metrics do you have to ensure accountability? What mechanisms? People would probably say, Well, we have these, these KPIs, we have these numbers. And what is that? It's almost all going to be technical, it's almost all going to be performance accountability, as Tim is saying, and so having that layer of cultural accountability becomes very important, which is why it's a big reason we measure psychological safety, we have quantifiable evidence of how we're doing in cultural accountability.

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0:34:17.0 Junior: So let's move on to the next one. So that was kind of build better leaders, address their technical and their cultural competence. Next, we have work top-down and bottom-up in parallel paths. So if you look at culture, eventually it breaks down all the way to the habits of an individual person, right? That's the building block and the norms that happen when you get multiple people interacting. It eventually has to come down to that level. So if you have, let's say an organization of 20,000, do you think that it's going to be enough to just work top-down and work at the top of the organization and hope that over time it will cascades all the way down to the bottom. Tim, is that a reasonable approach? Or do you think it's lacking? 

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0:35:08.9 Tim: Well, as you said Junior, it's necessary, it's a very important part of cultural transformation, but it's not sufficient because what you're doing then is you're making this heroic assumption that if you communicate down and you cascade down maybe training and even modeling behavior for that to go with that you're still making this rogue assumption that people are going to cross this threshold of conviction and begin behaving differently and believing differently. That's too much of a stretch, right? You're not going to get there. So this is where the bottom-up effort has to be run in parallel with the top-down. Isn't that right, Junior? 

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0:35:56.9 Junior: Yeah. If we have a choice within an organization, we're going to do both. We'll always start at the top, but it's very important to have some of these other efforts that are going on bottom-up. So Tim, tell me a little bit about the modeling behavior of leaders at the top of an organization, because it seems to me that that buy-in at the top is very important, and it will probably stall if we don't get it. So what have you seen with the executive teams that you've worked with? What type of opinions have you seen? Is it generally healthy? Are there some just patterns, I'm interested in understanding what you were seeing at the top of really big organizations and what's working, what's not.

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0:36:40.0 Tim: Well, I think it goes back Junior to the distinction that we often make between doing culture by default and doing culture by design. If we're doing culture by design, then every member of the executive team understands very clearly that they are a cultural architect, that they are radiating influence, they're modeling, and they are rewarding certain behaviors, they're punishing certain behaviors, and they cannot abdicate or delegate that responsibility, they get that. And so the organizations that are able to do this very successfully, they are in lockstep at the top of the house, they are in alignment, and when we say alignment Junior, we don't mean mostly aligned. Mostly aligned is actually incredibly dangerous. It sounds good, right? When you say to someone, We're mostly aligned, that sounds pretty good. It's actually very dangerous because mostly aligned at the top translates into severely misaligned when we get down to the bottom of an organization, especially with a large complex organization where there are several layers in the hierarchy, so we need to be totally aligned at the top. We need to be in lock step, and then we consistently and uniformly model and reward the behaviors that we want.

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0:38:22.0 Tim: That cascade becomes powerful and that becomes kind of the momentum and the energy that is able to spread throughout the organization, but as we've just mentioned, that's still not going to be enough, we need the bottom-up effort to complement the top-down effort, and then we can effect real cultural transformation.

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0:38:49.3 Junior: The Culture by Design idea at the top is particularly important, and here's another tidbit for saving you some time. If you're gonna try and go affect the opinion, the prevailing norms at the top of an organization, you better come with some data, and we've seen this over and over again. We won't go to the top of an institution and attempt to do this without some data, it's important that you can back up what you're saying. And so during a lot of what we call the executive experience, when we work with organizations, we bring in the culture diagnostic data and show the organization where it is, we show the organization its pockets of blue zone, it's pockets of red zone.

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0:39:42.8 Junior: Those areas of the organization that are doing very well, those that are struggling, where are the areas of greatest opportunity? And so instead of going in with really blunt instruments or no instruments and just saying, Hey, this is really important, and expecting people to align with us, believe it, and then behave accordingly. We go in and we say, Hey, this is the current state. This is what's going on inside the organization, this is what's going on quantitatively. Here's what's going on qualitatively, and here are some things that we think we could do to make an improvement, and then you can go in with very sharp instruments and target pieces of the organization that most need help. So one of the things we'll do, we'll do an org chart view of the culture diagnostic, and we can show the sponsor of the program, "Hey, here's where we need to spend some time, don't go waste time over here because there's a piece of the organization over here that you aren't looking at, it's absolutely screaming for attention," and so being really well-equipped from a data perspective is necessary in order for us to have high leverage and use our resources wisely. If we don't do that, I think we're wasting a lot of energy.

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0:40:57.2 Tim: Junior, I wanna add something to that. So data is the most powerful weapon that we have to overcome objections, to put in the face of our strongest detractors to help them understand the baseline where we really are, because often leaders especially... Well, often at the executive level, they are projecting their own experience on the rest of the organization and they don't realize what's really going on, but one thing that I wanted to add is that, as you said, we measure at the team level. Now we can aggregate that data, we can slice and dice it, we can do cross-tabulations in a bunch of ways to show different views of the data, the most powerful view every single time is when we show the results and we put them into a heatmap that's color coded at the team level. Say we've surveyed 100 teams. When we show that to the executive team, its breath-taking, why? Because when we show them the results for 100 teams and its color coded, they're finally able to see the local variance, the variance that exists from one team to another team to another team, and that local variance is breathtaking.

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0:42:32.5 Tim: It is absolutely incredible. It reveals the micro-cultures that exist in the organization and just how very different they are, one from another. Often we'll see measures of psychological safety where one team has double or triple the level of another team, that local variance is just absolutely astonishing. But if we didn't have that data, then we would look at... We might look at the organization and say, Oh, thinking at the macro culture level, well, here's an institution, and they have a certain level of psychological safety, it isn't remotely true. You have to go down to the micro-culture to see the local variants, and that variance is astonishing. So I wanted to add that because that's the moment of truth when the executive team looks at that data, they see that local variance and it is breath-taking.

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0:43:39.2 Junior: So now imagine that you've added that as your cultural accountability mechanism, now you're a little bit more dangerous. So the next thing that we wanna talk about is integrate psychological safety into your promotion and your selection criteria. What are we selecting for often in organizations? Technical competence. We're promoting based on technical competence, and we do that all the way from the individual contributor level at the front line of the organization to the top, and often the best way to move up that organizational ladder is to be technically competent, to be good at your job because that's what the organization is promoting for, but what happens culturally, there could be misaligned incentives, there could be really dangerous incentives by promoting exclusively for that criteria. What about cultural accountability? Where does that come in? And so what we say is that you should never hire a leader, you should never promote a leader if they don't have a demonstrated track record of creating psychological safety. If they do not have that, huge red flag, huge risk. If you haven't seen them interact or see proof of really healthy interaction, proof of really high psychological safety, that's just a liability that you can't handle, you should not bring that into the organization because it can wreak havoc.

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0:45:13.2 Junior: And so one of the most interesting things we see when we talk about building leadership bench is in the org chart view of the culture diagnostic, you can see, let's say a pocket of the organization, and let's say that one of the leaders is going to turn over and you have four leaders beneath that leader that are up for promotion. If you didn't have the culture diagnostic data or some sort of cultural data, some sort of cultural accountability, you can make a really rough decision and it could hurt the organization pretty badly, and so equipping yourself with that data, at least being aware of that, trying to find something to justify the decision culturally is really important.

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0:46:00.6 Tim: And thankfully Junior, we're starting to see this more and more in organizations where they are incorporating psychological safety as a selection criterion for promotion to management, that really needs to be part of the analysis. Yeah.

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0:46:16.5 Junior: So those are our three recommendations for you to build better leaders through looking at two types of competence, technical and cultural, having accountability mechanisms for each, working top-down and bottom-up in parallel paths and integrating psychological safety into your promotion and your selection criteria. So the level of the intact team, the level of the micro-culture is really, really important when we're talking about healthy cultures in organizations. So what are the SparkNotes from today's conversation? Here's a little bit of a summary. Patterns of an individual, habit, patterns of an organization, norm. A collection of norms, Culture. Culture is the way we interact. What level of culture is the most influential, macro, sub-culture or micro culture? Micro culture. So what do we do? We build the cultural competence of our leadership, we don't select or promote leaders without seeing a demonstrated track record of building psychological safety, and for yourself, I wanna spend some time here. Acknowledge and then appreciate the fact that as a leader, you have the most influence on the culture of your team, own that, acknowledge it as an opportunity and work to become better. Tim, what are your final thoughts as we wrap up today? 

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0:47:45.3 Tim: Well, I come back to the premise that you're a Cultural Architect, and that the micro-culture is where we live life, personal life, professional life, we swim in and out of micro cultures all day. This is where we live life, we need to be more aware of that and more deliberate in doing culture by design, and not by default.

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0:48:12.2 Junior: If you haven't listened to our Leading with Character and Competence series, I would highly suggest you'll do that. That will help with your personal development across a lot of these issues that we've talked about today. I would also encourage you to check out the LeaderFactor Culture Diagnostic. We'll put a link to that in the show notes. I didn't mean to be pitchy in that today, but the data that's coming out of that instrument is very interesting, it's the best way to ensure cultural accountability in your organization. So thank you everyone for your time, your attention, we appreciate your listenership. If you liked today's episode, leave us a like, a review and share it with someone you think might find it valuable. And lastly, if you haven't taken the new Ladder of Vulnerability Self-Assessment, do it. It's free. We will link to that in the show notes as well. Take care, everyone. We'll see you next time, bye-bye.

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0:49:08.3 Freddy: Hey Culture by Design listeners, this is the end of today's episode. You can find all the important links from today's episode at leaderfactor.com/podcast, and if you found today's episode helpful and useful in any way, please share it with a friend and leave a review. If you'd like to learn more about LeaderFactor and what we do, then please visit us at leaderfactor.com. Lastly, if you'd like to give any feedback to the Culture by Design podcast or even request a topic from Tim and Junior, then reach out to us at info@leaderfactor.com or find and tag us on LinkedIn. Thanks again for listening and making culture something you do by design, not by default.

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