Coming to the End of Culture with Daniel Snell #94

After all, all art is experience.

Hello and welcome back to The Company Doctor. This week we're joined by Daniel Snell, co-founder of Arrival and a true expert in cultural transformation. Daniel's work helps businesses unlock performance by building cultures that serve productivity, not just platitudes. Gary and Daniel talk about what really drives success in the post-pandemic workplace, how to embed mindset shifts that stick, and why ignoring culture Culture could be your biggest strategic misstep.

Hey Daniel, thanks for joining the Company Doctor podcast.

Welcome. Thank you. Thank you for having me and thank you very much for inviting me to be on and I look forward to this conversation.

Yeah, we've been really looking forward to it and today we're going to talk about the coming to the end of culture. So there's some really interesting stuff. We've had quite a few conversations about culture, but I know that people are going to really find your take on it really interesting. I guess the best place to start, Daniel, is can you give us a brief introduction to yourself? Tell us what makes you, you.

Yeah, so I founded or co-founded an organization called Arrival. We're a management consultancy that have organizations focus on productivity, performance, and growth, and we also have a social impact arm. So we've spent the last 20 years supporting young people from low-income communities in partnership with business to deliver on their performance, growth, and agenda that this country much needs.

That is great. I love the combo. And there's some stuff I'm going to definitely dig into. I've got lots of questions for you.

We have our 20-year anniversary this summer. So do you?

Yeah. Are you doing a party?

We are. I'll send an invite.

Excellent. I wasn't pushing, but thank you very much. Pleasure. My first question is really, I was reading a lot about you and In a recent article, I think it was in Workplace Insight, you talked about companies are prioritizing purpose and feelings over potentially over performance. I'm really interested to dig into that and get your thoughts about it.

Yeah, so my hypothesis based on 20 years of working with some of the UK's best-known organizations and globally, is there is a reason why businesses struggle, particularly in the UK context, on productivity and performance and growth. And I believe it's because post-2008, effectively there's been cheap money in the system and low interest rates, which has removed the need for performance and productivity. And in that space, I guess organizations first lost focus And then they lost over time the capability to link what they do and how it drives performance. And so in that space where there hasn't been a need for productivity and performance is filled with cultural conversations around, as you said, purpose, meaning, and ultimately feelings. You know, companies are bombarded or people working in companies are bombarded with questionnaires and surveys about how they feel about things. Well, feelings, in my experience, are a terrible indicator of anything to do with performance. It's usually the other side of feeling uncomfortable. Do you deliver great results? It takes a lot. And I also think during that process, what managers focused on and the capabilities that they have also would have delivered product of a new performance have also waned. And so we get to this point where lots of organizations focus or overfocus on strategy at the cost of actually execution and culture. So I guess where I'm coming from, from a people context, is that just focusing on strategy at an executive level will never deliver you the results you want. It also has to be supported by a kind of cultural and execution component. But I feel like a lot of that capability is now gone. And so to make it even harder, I think in the last sort of 10 years, people have recruited for what that cultural paradigm was, inclusion, feelings, meaning, purpose, not on what it takes to be a high performer or productivity or growth. And so we're in this sort of double bind where It's very hard to change the culture. This is based on endless conversations with executives that I do in my day job and their frustration that they can't turn their organizations around quickly to establish high-performance cultures for all the reasons that I've set out.

Yeah. No, I'm interested to dig into it because at some level it could be seen as quite controversial. And I was wondering how you got there. Did you have an epiphany? Did you wake up one in the middle of the night and think, you know what, I think I've nailed this? Yeah. How did you get there?

Certainly the feedback on our insights has landed very well at an investor executive level. And, you know, I've had some, you know, it's obviously hitting a rich vein of recognition. I think my frustration was the conversations that I was getting pulled into and people were talking about didn't seem to connect with what actually drove productivity. And so we'd have these constant conversations about things that didn't seem to be connected or have any direct linkage with decision-making, focus, customer centricity. So what I've observed is a lot of organizations look inwards now. We've lost the need to look out. And of course, the world is always changing, so your customer is always changing. But if you're not always looking out and addressing your market, and you're always just focusing on how do we feel internally and what do I want and how do I feel comfortable and how can I be ensured a pay rise next year, then we're going to lose sight of what it takes to remain competitive. And so I would find myself in these conversations, which were bamboozling to me. And I did a big piece of research 3 years ago where I interviewed a whole range of global executives. And I think the first realization was that nobody really understood how to make D&I work. Everybody had different definitions. There wasn't any kind of universal singularity, and there was no way of understanding whether they were applying it successfully because it meant different things in different places. You can't apply any singular mechanism when you are working on a global platform, because it just doesn't make any sense. And so I realized that culturally we were starting to go down a route that wasn't unlocking what I had initially called the diversity dividend, which is the commercial and performance opportunities of having different teams that were well managed, focusing on the things that could drive greater productivity and performance. It'd become about a performative agenda, not a commercial performance agenda. And it just seemed like to talk about that seemed problematic. And just generally because our investors, you know, we've got some very significant investors in Arrival. So I have these kind of conversations all the time. There's just a general challenge of having businesses become productive. And when you speak to leaders, they have one approach. And when you go down into the organization, they seem very confused. And interestingly, I'm sure you saw that Gallup report, is actually most people are not happy with their culture. So we've invested an absolute ton of resource and time in the last sort of 15 years creating a kind of more understanding, inclusive, benign, feelings-based culture. But actually, that's not what people want. It feels like there's a, it's a sort of bottomless journey really to where are we going and who's managing it and what's the intention and what's it aligned to?

I get what you're saying because, you know, I work like you with a lot of companies and there's a lot of focus on changing the culture, improving the culture. But a question for you, and I think people that are listening because our audience is probably a business-to-business audience, I would say, would be, well, okay, if I buy into that as a concept, What do I, what do I do with that? You know, what's the practical approach to bring this to life then? If that, if that is the case and is true, what do I do?

Well, you have to align your organization and everything within it and everybody within it to a strategy that's going to win. That sounds really simple, but that doesn't often happen. What happens is an executive team will come up with a strategy and then tell the organization what they expect or tell them the strategy. But because organizations and the people in it don't know how to contribute to that strategy in a meaningful way, once you get down into the organization, people don't do that. They get distracted by a range of different things and it becomes very dissipated. And so people don't know how to contribute and don't know how to manage for that focus. So if you imagine an organization as a pyramid, At the top is the executive team and the strategy. The whole organization needs to be plum-lined into that strategy and all of the processes, systems, people, focuses need to be aligned into that strategy. And this is the most important part. Everybody knows how to contribute to it and that managers are able to create the right environment and unlock the best contributions, the contributions that drive greater performance, removing everything else, distractions, things that are not directly linked or connected to that strategic growth agenda. Everything else has to be removed.

But tell me, how do you do that? You're just like changing the wheels on a car that's moving 100 miles an hour. From your experience, how do people do that? I understand what you're saying, but how do you do it?

So for instance, you would, define what the intention of a project was or a meeting or a decision point, and you would have a clarity around what good would look like. And then you would explain how you want people to contribute to that. And if people were unwilling or unable to contribute to that, then you should free them up to contribute elsewhere in the business that's going to bring real value. I think because the market situation is change, Gary, because that benign environment has gone, people are going to have to be able to clearly articulate and demonstrate the linkage between their salary and what they do and how it drives the strategic agenda. Because if you can't do that, you're in a real pickle because, you know, we're just about to go through a kind of cost efficiency phase accelerated, I imagine, by AI. And therefore, I know this is ridiculous for old-timers like you and I, but it would've been obvious what you were working on and how it was driving something. But now, because of this kind of cultural paradigm, it's flooded with complexity where performance or whatever is often seen as a bad thing or an unpleasant thing.

Accountability.

Yeah. But we are getting to a, we, we're getting to a point where people have gonna have to again articulate what they do and how it drives directly the benefit, you know, whether it's sales or performance or efficiency.

You're saying there's a consequence for—

Yeah.

But the question as a side question, 'cause it's conjuring up a question for me that I need to ask you. What's your thoughts about behaviors and how important is it to reinforce these behaviors to make that work? Because I understand what you're saying, but someone's got to be accountable for driving this. Yeah. And is it, what's your thoughts about behaviors?

Well, to the accountability, ultimately it's the executive, right? And that was my point. Executive on the whole, and this is obviously not true everywhere, but executives are preoccupied, over-indexed on strategy because it's glitzy and it's shiny and you can control it over the cost of actually execution and making sure that the culture and the productivity is actually happening. So they then have to enforce that managers are able to unlock those contributions, train them, remove them if they can't. The behaviors that they're looking for have got to be embedded with the sort of behaviors that are going to drive productivity, better decision-making, focus, pace, all the things that are going to increase the quality of decision-making, but also make sure that their focus is in the right place, and demonstrated at the right time in the right way.

Do you think it's important though to reinforce those? I appreciate you need to have the right behaviors, but that's easy to say, not easy to do. Do you think it's important to have a way of reinforcing those in the business to make sure it works?

Yeah, it's essential. But going back to my model, what that does is it forces out distractions. So it obliges people to behave and contribute in a particular way. So for instance, we're back in this particular project. What is the intention of the project? What decision are we trying to do? How are you contributing to that? If you can't contribute to that or bring the right behaviors, that's going to become quite apparent. And so, for me, the design, the architecture of the program, or rather of an organization and how it's designed, is actually going to drive the right behaviors ultimately.

And if I said to you, people are happier at work, are more engaged, true or false?

I don't think the evidence is there for that. A, what is happiness? I don't know what it is that causes happiness. I think it's a state of mind that can be kind of influenced on a whole range of factors. Probably not a wise set of factors to think about how to run a business. But then what's the correlation between happiness and greater productivity, performance, and growth? Clearly it's not there. And by the way, I'm not saying let's go back to the bad old days. I'm not saying that. I'm not It's what— I'm not trying to be anti-anything. I'm just trying to state an obvious point that organizations are not focusing on the right things in the right way at the right time. They're not having their people focused up on the right things in the right way in the right time, and they don't know how to contribute it. So, if you have a clear singular focus or focuses for a business and you're clear about what it is you want people to contribute to that and how and when, then you've got a fighting chance. Because the amount of times I've worked in organizations and I'll speak to exciting young talent who said, I'm leaving because no one's asking my opinion on everything. I'm out talking to customers and nobody's listening to me. I want to contribute, but no one cares. Or if they do listen, they're burdening it back on me to do something with it. Why should I stay? And so, The downside of not creating a meritocratic high-performance culture is that your best people leave, or they can't contribute effectively to your growth agenda, and therefore they get frustrated, or you just miss out on a ton of contributionary value and talent value because they don't know how to contribute, or your business isn't designed to contribute effectively.

That makes sense. And can you give me an example, Daniel, where someone has addressed this cultural challenge in the way you're suggesting and it worked and maybe with somewhere where it didn't. Yeah. Well, just bring it to life.

Yeah. Yeah. So I've pretty much worked in every country on the globe now with a leader in some shape or form. So I've been in every single context and situation more or less in every market. And I know this always delivers. So because it's universal and it can be universally applied, as soon as you start to think about externality and how to effectively contribute to the strategy, you're going to get uplifts in performance because that's what your talent want. Hence that article that you came on, you know, people, great talent don't care about foosball or, you know, beer or pizzas. That's not really their driving focus. They want to be recognized for their contribution. They want to be a part of something that moves forward. That makes a difference. That they're in a successful business and they're part of that agenda. Because if you don't and there isn't that clarity, what happens is people get distracted or they get distracted by distractions and then it becomes political. And then people further their career by influencing, not by delivering against a meritocratic singular focus. And they realize that getting ahead is, it's the smarter thing is to manage your manager and try and work with them to get job security or a promotion rather than delivering against a kind of clear Focus.

And outside of yourselves, obviously, is there a role model, like a business that's really done this well that we should look at?

I think generally speaking, I think where my insight can be applied is everywhere. I know the UK market better. There are factors that drive greater productivity or growth in certain organizations, and there's some flawed thinking in that. So let me just take you back 20 years when the tech scene started to explode and they were having incredible growth based on small numbers of staff. The kind of leverage capability of unlocking a global digital play is much more significant than if you're burdened by a very significant cost base of people or shops or logistics or supply chain stuff. Everybody thought, wow, We should be tech businesses. And they started buying tech, but they couldn't apply it to their model because they were burdened by costs or different people with different capabilities. And instead of trying to figure out how to streamline their organization or reinvent themselves, what they actually took was the kind of false narratives coming out of California, which was beanbags, pizza, and pier. So it's easier to kind of apply that performative agenda of Californian gobbledygook spiritualism than it was to actually figure out how to reinvent themselves and become a digital business. Which is not, you know, it's clearly impossible if you're a retail operation. That's not what you do, you do retail. And so, you know, the market in the last, since quantitative easing and the recession of 2007, 2008 has hit everybody really. Now there will be outliers because they're leveraged digitally or their private equity has obviously had a boom run. But just generally, it's been hard for organizations in the UK for all of the reasons that we've set out. And the thing that I'm trying to address is the real anchor in many of these organizations is how they think about culture. Because the danger for executives to dismiss culture and say, well, that's not my role, that's the job of a CPO or an HR director, is it sort of, in their mind, frees them up of the responsibility of the culture and how the organization operates. But that execution bit of ensuring that the business is a high-performing organization is absolutely centrally their role.

Yeah, totally agree.

So is.

Let me just switch gears a little bit because this is really interesting conversation. There's changing patterns in how people work, obviously since COVID particularly with remote and hybrid working. What has this done? Has it had any effect? Do we need to adapt? What's your thoughts on how that impacts what you are championing?

Well, working from home works for some people in some organizations and it doesn't work for others. The bit that missing is how does it work? Like some organizations saying, bring everybody back. But my hunch is that's because they don't know how to utilize the people that might be working from home. And because they're not sure of what's going on in their organization, management capabilities and all of that, they just hit the panic button and bring everybody back in. And on the flip side of that, people working from home, what are they doing? Are we really convinced that they're really delivering great value working in the way that they should be all the time, or are they watching Netflix? So, my point is if you're of a level of maturity and have self-drive, working from home within a digital world is probably not a bad thing. Where it really has an issue is on development of young people who need to be able to look over the shoulders and observe how more experienced people manage things. So, that whole management point we're talking about, how to manage teams, how to manage meetings, all of that is falling out of our capabilities because people aren't observing it. Right? It's happening on Zoom. What's the follow-up of a kind of conversation online? Who's holding whom to account? What does good look like? When's the decision? Who's accountable? Who's transparent? How are we applying RACI? Yeah. You know, what are the deadlines? Why are those deadlines? How can you articulate how this links to the strategy? How can you articulate how it's linked to the customer or the market? If you can't articulate those things, almost certainly the linkage is not there. And so when I work with a client, I'm saying, your job as CEO is to go down into the organization, stop people and say, what are you working on? Tell me about it. How's this support the strategy? And if they can't articulate clearly the linkage between what they're working on and what the organizational objective is, there isn't a linkage, which therefore means it's yet another cost burden and distraction.

That's true. And what about the effects of AI, blessing or a curse on culture?

Again, I think it's a bit like working from home. If you have the capability and you've been blessed with enough kind of in-work experience to manage yourself and manage other people, it's a blessing. Like I've saved, I saved, I don't know, between 10 and 15 hours worth of commute time if I'm working from home, somebody might say, versus, and I can use that really effectively, versus I'm sitting there and I haven't got a clue. What to do next and how to do it. And there's no one to turn to because everybody's jammed in on online conversations that are maybe going nowhere and pretty meaningless. AI, I think, is an acceleration of that. And so, you know, when I have conversations about AI, for me, it falls into a number of different camps. So obviously AI is accelerating really quickly and gonna be a massive disruptor for a range of reasons. The thing that seems to separate people who can use AI effectively and those that can't is the prompt questions and how you apply it. Are you applying it to a kind of, can you use the software well to give, unlock an added value insight approach? Someone was telling me that because this 40-people management team had been asking the same question of AI, they came back with exactly the same slide presentation, all 40 of them. Because they just asked a kind of top-level question and they got all the same answer. Well, in which case, all of those 40 people now are in danger of getting removed, aren't they? 'Cause they can't bring any value that AI can bring. So how are you using it? How are you applying it? You know, and it sounds like AI's got to the point where it can do the coding for you. So coders are now commoditized. They were sort of like, coders were the most important people on the planet for a while, and now they're commoditized. You can just simply get AI to do the coding for you.

You just need to be a prompt engineer for a living, probably.

Yeah.

And this is good. So listen, I'm really keen to help people listening get your wisdom, particularly to do with cultural change. And so from your experience, I see you as a philanthropist and an entrepreneur. I think you won an award with Big Venture Challenge winner, I think you were.

Years ago.

My God, that's too far back. A long time ago.

Yeah, yeah.

Thinking about people listening, give us 3 quick tips. If you could only do 3 things to get the right outcomes from cultural change, what would they be?

Culture has to be in service of productivity and performance of growth. If it is not driving those things, then it's the wrong culture because you will just get distracted by a range of different points of views that will never find alignment and they aren't aligned with the intention of the organization. It'll be dominated by the loudest voice or whatever's critical at that moment. And that is a cul-de-sac. And obviously that's going to upset some people who are very passionate, aligned with a lot of the kind of messages that have come out of companies in the last 15 years. But those are no longer equal or fair. And the only way to address those is to have a truly meritocratic environment where whomever you are and wherever you are from, you're recognized on your contributory value, not your position, power, or influencing. That becomes meritocratic. So if you are contributing significantly wherever you are in the organization, you have a right to rise and be rewarded and recognized for that contribution, not based on anything other than your contributory value. And we have to get there. Otherwise, it's a Gordian knot. And all the leaders I speak to are tying themselves or have tied themselves in knots trying to please everybody. But if you please everybody, you can't focus on performance. And then eventually, you're running the risk of the organization going out of business or being M&A'd or whatever. So that, be very visible as an executive by talking to people and engaging and communicating clearly what you want and how you want them to contribute with your strategic growth ambitions. Your job partly is to set the strategy, but also to walk around the shop floor talking to people and not telling them off, but recognizing and rewarding the right behaviors and the right decisions and the right focus and the right results. Because I'm a much bigger fan of carrot than I am stick. If you want really good behavior change, really recognize and reward the right behaviors and then you'll You'll see it happen, but you must also be that person yourself. You can't just tell the organization and then behave in a different way. You can't look down the organization and scream at your managers or become frustrated at the managers because they don't tightly manage performance in teams if you yourself don't do that. You have to model exactly what you want everybody in the organization to do.

Otherwise you're not authentic, I agree with that.

Yeah, and my third one is, Be external in everything. Be able to articulate. It has got to be external. You've got to actually reach your customer. What do they need? What do they want? Because everything is constantly changing, whether it's digital or just age or demographics or resource or whatever. Everything is always evolving. If you don't keep an eye on that all the time consistently, you lose sight of it.

That's brilliant. I've got, listen, I've got, we've got time for one last question and it's a big one. It's a double-barreled question coming your way, young Daniel, if you were looking back on your career, knowing what you know now, what would you have done differently?

I would've got after it earlier. I've achieved lots. I've been invited to Downing Street. I've won all sorts of awards. I have a fabulous family. I've achieved a lot, but I probably didn't have the experience because my parents weren't in business, I didn't quite know what was going on and why. Exactly. Yeah. And so if I'd trusted myself and gone after what it really takes to deliver quicker, then I would have had more time to do more. But I have done a lot, so I'm not—

You've done loads. I have done a lot. There's a second part to the question, so I'm interrupting you because I want to get this other take on it, which is I know you, you're on a mission to help young people. Yeah, you and I are aligned on that.

Yeah.

What advice would you give your younger self? It's kind of looking through the lens of younger people that you're helping anyway.

Yeah, I think trust yourself, but also ensure what you're doing is aligned to where you want to go. It's a clarity, I think. I think— I don't know about you, but when I was in my early 20s, I wasn't terribly clear on where I was going, or I I was, but perhaps it wasn't very grounded. And then there's a gap between that that gets flushed out. Everybody's on a kind of track. I remember realizing at some point in my life that Alex Ferguson was never going to call me and ask me to play for Manchester United, partly because I wasn't very good. Oh, really? Yeah. Partly because I wasn't very good and partly because I was too old. But it's that track and that track is applied to everywhere in life. If you don't do what it takes now to be on that trajectory, you miss your gates later in life and it's very cruel. So particularly those young people that I work from inner city communities, they don't understand any of this, right? They don't have a navigational process. There's no way of helping them understand what the working world is like or how to get on or how to become a CEO or anything like that because they can't turn to parents or a network to say, which university do I need to go to? How do I get work experience? How do I get my foot through Goldman Sachs door or whatever it is, they just drift versus people who are tuned in, whose parents or network have all of those experiences that can navigate them through it. So for me, you can't convince me, I've never been convinced on this, that talent just doesn't sit on a bell curve. So whether it's low income, gender, ethnicity, wherever, you're gonna have some amazing talent here and you're gonna have some poor talent. You're gonna have everyone else in between. And so, just because you're from low-income schools doesn't mean that you're not amazingly talented. You just have to be able to understand how to apply yourself in a very focused way, in the right way at the right time to get through those gates. Otherwise, you're making it harder and harder with every year to play catch-up.

Fantastic. Got some really great insight and a great way to finish. Daniel, really appreciate you coming on. I think you've really given me some food for thought, things I hadn't really thought about. I do a lot of work with companies on culture, but the title, Coming to the End of Culture, I think you've shaken the tree a little bit and given people some other thoughts.

Yeah, if I can jump back in there, I just feel like we are literally coming to the end of an epoch where we got focused on a kind of culture which was fit for the particular time that we were in, because there wasn't really pressure to deliver. We've now come to an end on that. Everybody's talking about growth, productivity, and performance. Culture as it's currently understood is a drag and anchor on that, that has to be resolved, which means how people think about their job and how they contribute to the organization is about to have a handbrake turn, if your audience weren't already aware of that. It's time. We are here. You know, I'm deep into conversations with senior executives of some of the best organizations in this country, and it is coming. And so you have to be able to figure out very quickly, if you're listening to this and you're in a management role or a colleague, how are you going to effectively contribute in a way that drives the strategic ambitions of the organization? Because if you can't directly articulate that, you're in trouble. Brilliant.

What a great way to finish. Well, handbrake turn. Daniel, thanks so much for coming on the Company Doctor podcast. It's been great.

Thank you for having me, and, and, uh, really nice to meet you and your audience. Yeah, Likewise.

Thanks so much.

Thanks for listening, and a huge thank you to Daniel for his insight and for joining us on this episode. Arrival is marking its 20th anniversary this year with a special event featuring a stellar lineup of speakers. Find out more about the event and keep an eye out for the upcoming book on organizational culture over at wearearrival.com. That's wearearrival.com. Thanks again, and we'll see you next time.