Culture Signals

The genius with this culture signal is how it releases customer service agents from having to reason about the tension between customer service and call length. The cognitive load typically associated with ‘Should I stay on this call or not?’ evaporates.

Why does Zappos celebrate wildly inefficient customer service calls? Why did FAVI brick up the window that allowed managers to see what was happening on the factory floor? Culture signals.

In this episode, Richard and Peter explain how culture signals work and how leaders can design their own culture signals to create the changes they want to see.

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Leading Organizational Transformation (virtual, instructor-led)

Episode Transcription

Richard Lawrence

How do you change the culture of an organization? Is it even possible?

In the early 1980s, FAVI was a traditional manufacturing company with a traditional manufacturing company culture. The French company, which makes brass parts for cars, had the command and control management you might expect. There was an adversarial relationship between factory workers and management. Neither trusted the other, and it was clear in FAVI’s policies, procedures, and even in the architecture of the factory. Management looked out over the factory floor from offices above. Management and factory workers had separate cafeterias. Factory workers had to check out the tools each day, that they needed to do their work—lest they steal them.


In 1983, FAVI’s ownership group brought in a new executive director, which is the equivalent of a CEO of an American company, named Jean-Francois Zobrist. Zobrist’s experience leading other organizations had convinced him that people who feel trusted do better work, and so he set out to convince employees at FAVI that he trusted them. He was fighting against decades of ingrained culture, so he knew that platitudes wouldn’t do the job. His first action was to just observe for three months before making any changes. This allowed him to spend time listening and really getting to know the people, and understanding the many different perspectives on FAVI’s culture. Then, his very first official action as CEO was to brick up that window where management looked out over the factory floor. Next, he eliminated special parking spaces, cafeterias, and retreats for management. He removed the time clocks where workers punched in and out. After all, if we trust management to do good work without being tracked on their hours, why wouldn’t we trust the factory operators? He removed the locks from the equipment lockers, and on and on. Zobrist sent strong signals to everyone at FAVI that trust wasn’t just a platitude, he was letting his actions speak much more clearly then a thousand impassioned speeches at company meetings could ever do.

It’s pretty easy to get people to adopt a cultural approach that is already well understood—say, “We care about efficiency in our factory so stay focused on your work.” But when your goal is to make your culture something unusual or unexpected, like at FAVI, it’s not enough to just talk about it. You have to demonstrate it in a way that people will say “Oh, they actually mean it. They’re not kidding around…”. We call that demonstration a Culture Signal.


To understand culture signals, we first need to talk about tradeoffs. You see, good culture signals aren’t so much about signaling what you value as they are about signaling what good thing you’re willing to give up to get what you value. “We value X so much that we’re willing to sacrifice Y to get it” (where Y is a good thing you might expect the leader to also want).


Everyone is used to hearing leaders talk about valuing customer service or quality or sustainability or safety or whatever. But employees are (rightly) skeptical that when push comes to shove, that value du jour will take second place to something like profit or efficiency. So, a good culture signal makes the tradeoff clear. It’s like Toyota saying, “We value quality so much that we’re willing to get worse at efficiency in the factory, so employees are expected to stop the entire assembly line if they see a defect. And we’ll celebrate when that happens.”


Or take Zappos. The late-CEO of Zappos, Tony Hsieh, gave one of the clearest examples of a culture signal in modern business. Hsieh had a strongly held belief that caring well for customers, even making emotional connections with them, was both the right thing to do and would be a significant differentiator for Zappos against other ecommerce retailers.

But how to signal that? CEOs claim to value customer delight all the time.

So, Hsieh started celebrating outlandishly inefficient examples of customer service calls. One of the best known examples was a customer service call that lasted 10 and a half hours and finished with a satisfied customer. And then there was the customer service agent ordering a pizza for the caller. Or sending flowers to the customer returning unused shoes from a parent who’d died.

Surely there were hundreds or even thousands of short, efficient calls with good customer service that Hsieh could have celebrated.


Hsieh, wisely, didn’t do that. Instead, he emphasized just how much he valued good customer service by trading off the standard metric for success in call centers: average handle time, or AHT, how long it takes to solve customer issues. Most call centers try to push that time down. Hsieh celebrated the opposite.

The genius with this culture signal is how it releases customer service agents from having to reason about the tension between customer service and call length. The cognitive load typically associated with “Should I stay on this call or not?” just evaporates.


A Culture Signal emphasizes a trade-off that might be new, unique, unusual, or which people might just be skeptical about. It should answer the challenge: “If you really mean it, prove it.” So the strongest ones are ones where people say “Oh, they’re not just talking about a change, they really mean it.”

So, let’s say you want to create your own culture signal, first you need to get clear on the tradeoff you want your people to make. What is the thing you most want to optimize for? Now, consider the other side. What good thing are you willing to get worse at to optimize for that other thing you want? It needs to be a good thing. “We want to optimize for quality, and we’re willing to give up shipping crappy products to do it!” is not a real tradeoff. But,“We want to optimize for quality, and we’re willing to double our costs”– that one is.


Once you figure out the tradeoff, ask, “How can I vividly demonstrate being willing to accept that tradeoff?” Sometimes, that means celebrating extreme examples, as at Zappos. Sometimes, it means making a vivid and hard-to-reverse change, like bricking up the window at FAVI. But the key move that makes a culture signal work is showing the tradeoff in action, not just celebrating the favored side of the tradeoff.


Got an example of a strong culture signal you’ve seen? Or maybe you’re stuck trying to create a culture signal in your org? Either way, we want to hear from you. Share in the comments on the Youtube version of this episode, message us on social media, or shoot us an email at


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