I find that one of the great joys of leadership is when you get a question from someone in your organization that forces you to stop, think deeply, and become even more clear on a complex, high-impact topic.
Why is that joyful to me? I take it as a powerful sign of an environment that attracts people who are smart and people who care, and that makes them feel not just safe, but rewarded for contributing as their whole selves.
It doesn’t matter whether it’s here at Charles Schwab, or as I’ve seen at so many independent Registered Investment Advisor (RIA) firms we have the privilege to serve—but building and fiercely protecting a healthy, high-performing culture is one of the most important functions a leader fulfills.
The question I got recently was on the very topic of culture. I was asked by Jason B. in our Workflow Solutions group to respond to a quote attributed to the late Tony Hsieh of Zappos:
"Culture is like concrete. When it's first laid out, it is malleable and can take many shapes. However, after some time, it will harden and then it's very hard to change.”
Not only is this a great question, it’s also a topic I’ve thought about a lot. For more than 17 years, I’ve been working with Schwab Advisor Services, our business that relies on a strong culture to serve more than 15,000 independent RIA firms of every size, which in turn work very hard to cultivate their own cultures. Here’s what I’ve learned over the years about culture.
Culture is people
If you define culture as a set of processes or a list of values on the wall, then sure, culture can seem like that quick-drying cement. Heavy, rough, and drab.
But I believe culture is defined by people and the behaviors that a given community chooses to consistently engage in. Both the community and their behaviors should always be growing and evolving—it shouldn't be static.
In Advisor Services, and at Schwab overall, people have always been at the center of our culture which is a natural byproduct when they’re seen as our most important asset.
What it comes down to is that culture is ultimately about valuing diversity, because giving people the freedom and the responsibility to influence the culture in their own unique way is integral. There are many ways to do right by the people you serve, and we want to take advantage of all of them.
When diversity is missing or people treat it as a box to check, that’s when culture becomes hard to change.
Culture is purpose
There is one way I do feel that culture should be like concrete and that is purpose. Purpose is what activates the strength of people. In a great culture, everyone knows that methods and perspectives and life experiences may differ dramatically from person to person, but the goals do not.
That shared purpose is what activates the strength of diversity. We assume best intentions from one another. We begin to celebrate the strengths that others have that we don’t.
For us, that purpose is looking through clients’ eyes. It helps us to feel fulfillment in our work. It ensures that no matter how we approach our work as individuals, the destination remains the same. It’s the measuring stick for recognition and the anchor for our strategic discussions.
Now, purpose only becomes sticky if leaders take a “show not tell” approach. They need to invite more varied perspectives and backgrounds into the room. They need to use that purpose to explain the rationale behind their decisions. They need to live it in a way that makes it clear no-one is above serving the client.
This isn’t new, and it isn’t complex. Consistency and integrity have always been key. That’s not to say it’s easy. It’s not.
As I look at the evolution of our culture, everyone has gotten better, myself included. That’s easy to do when you rally around your why – and that’s something every one of us does so well. Our clients are the center. That’s our rock.
Culture is power
There’s a famous quote by Peter Drucker: "Culture eats strategy for breakfast." The implication is that the culture of a company determines its success regardless of how effective a strategy may be.
Without a compelling and inviting culture, there’s a ceiling to what you can accomplish. Money only motivates people to hit a mark. Culture draws on what naturally motivates us all and removes that ceiling. It’s the difference between doing our jobs and taking pride in our work.
Something I love to point out about the RIA industry is how well advisors have built trust and relationships with their clients. Relationships are truly the greatest competitive advantage of the RIA model.
Great culture at your firm sets the stage for great client relationships. Great culture is the thing that can set you apart from the crowd. That’s because it’s the one thing that no-one else can ever copy or steal.