When was the last time you thought about your firm’s culture and performance metrics in the same conversation? Do these two areas normally go hand-in-hand for you, or do you see culture as a human resource issue and metrics as a management issue?

First and foremost, culture is a leadership imperative. Leaders set the tone and carry the mantle of culture in their actions and words – they drive culture from the top down.

Furthermore, culture and performance are never mutually exclusive. While some think of culture as soft things like snacks, ball games, and work/life balance, it’s much more comprehensive. What we focus on strategically, what we measure, how we communicate, etc. are fundamental elements of culture. Let’s not limit our thinking of culture, let’s expand it. Culture should be inextricably linked to our strategy and directs us in how we will meet our strategic goals.

When our basic culture is cast as esoteric “feel good” elements but we incentivize and measure success using financial performance metrics, we send a very confusing message to our team. Instead, let’s make it clear our culture is one where high performance is expected and rewarded. One Fortune 100 company transformed its culture by declaring themselves to be financial performance oriented. To many that sounded wrong. But look at what the focus did: It made their customer service team more focused on pleasing customers and their retention rate went up; it made their leadership focus on ways to reward high performers and their employee retention rate went up. Satisfied customers and satisfied employees became a key driver in their transformation. Not all firms can do what they did, but the clear point is they embraced performance as an essential and transparent cultural element.

It’s important to remember: Your culture is uniquely yours. You don’t need external justifications for it.

Conversations on culture are some of the most candid that I will ever have with a firm. Often, partners tend to pigeonhole culture into “we don’t want this” vs “this is what we do want.” When a partner says they don’t want to be like XYZ firm, I ask what they mean, and I find they are defining themselves based on the perception of other firms. When I ask them if they would like the financial performance of XYZ firm, usually they agree that yes, they would.

When I work with firms on finding the proper intersection of culture and metrics, we first identify:

  • What you want in your firm in terms of both culture and performance.
  • What you don’t want in your firm based on these same elements.
  • Consider both the opportunities and ramifications of these decisions.

While I earlier stated, “your culture is uniquely yours,” let’s not forget these decisions provide both opportunities and challenges to our strategy.

Take this concept a step deeper with an example: A firm is seeking a positive work/life balance, and the partners are willing to accept financial performance below that of their peer group. If the firm is also looking to merge in a firm or be merged with someone else in the next five years, how do those financial results affect those strategic conversations? It can be a positive or a negative. These critical assessments, however, are important leadership discussions.

As leaders, being conscious of how we measure financial success and how that filters into culture and performance can help us avoid becoming another bait-and-switch recruiter. Millennials and Generation Z are taking over the workplace, and there is no tolerance for hypocrisy in these generations. It’s not that you would misconstrue your culture maliciously to gain a candidate, but if we are drawing professionals in based on work/life balance, but then not offering a compensation structure that supports that, we are setting ourselves up for failure with these generations.

Identifying what a firm wants, articulating that into the firm’s performance strategy, and then understanding the pros and cons of those decisions allows us to set the tone and expectations for our firm’s culture and performance. Linking culture and performance is an opportunity to distinguish your firm. These conversations are essential and allow firms to sharpen their focus. If you want to start the conversation, please let me help.