Business Culture: Do You Need It?

Successful companies enjoy long-term success MM910001094not just because they have a competitive price, a desirable product, or dominant market share but because they have intentionally developed and fostered a winning culture.

Every company has a culture: some chaotic, many are political, others dysfunctional or confused.  Those that are successful have winning cultures. If you want to compete successfully, the culture you develop in your business will impact your success, profitability and ability to perpetuate the business.

Sounds good but do you need a business culture to be successful? What is a successful culture?  How do I develop one?

What is a successful culture?
Every organization has a “culture” so it is not something you can avoid. Culture is primarily the product of those leading the organization and, secondarily, those hired into the organization.  Culture is the combination of the values, principles and practices of the organization and how values and practices are executed by the organization.

Company leadership is responsible for its culture. They determine what culture is appropriate to support the goals of the company and lead everyone toward the desired culture. A desirable culture does not occur by itself.  Creating a desirable culture is an intentional process that includes communicating vision and strategic goals, establishing values, designing business systems, setting recruiting standards and motivation to name just a few important culture fundamentals.

A successful culture then is one that is inline with the goals and objectives of the company. An organization can demonstrate a commitment to the values and principles of the company in how they carry out their duties on a daily basis with each other, stakeholders, suppliers and customers.

Culture and Business Success
The question is “How important is culture to business success?”  Is it worth the effort to invest, craft and develop a winning culture?  Some report the difference between companies that have cultures aligned with their business goals out perform their competitors by 200% or more.

Developing Your Culture
Your business culture requires the same attention and priority as an investment in the business plan (strategic plan), financial performance and business development.  It is not unlike developing a product where significant attention is given to the ability of the new product to perform at or beyond performance expectations, thereby meeting or exceeding customer expectations.

A product is generally an inanimate object, business culture on the other hand is people centric.  A product may have specific dimensions and quantitative measures whereas culture, composed of employees, has subjective and qualitative attributes.  Company leadership must evaluate each person’s ability to support and contribute toward culture objectives.  Training, mentoring, personal development or job reassignment may be necessary to bring individual abilities inline with the needs of the culture.

Personalities and Culture
Individual personalities may define the culture of a small emerging startup but once established, the success and perpetuation of the business will rely more on the overall culture and less on a few strong personalities. Those businesses that rely on the strength of strong personalities are handicapped when these people leave the company. Necessary decision-making and business processes are under developed in these open positions.  Next level performers are not used to taking responsibility.  The sum total is that the business performance slips.

The following are examples of successful business cultures.  You have most likely traded with one or more of these companies and value the customer experience that you enjoyed as a result of the service or product that you purchased.  These cultures did not come out of a box or off the shelf, but are the result of an intentional effort coupled with a firm vision to createa positive customer experience.

Company Culture
Les Schwab Tires Known for good grooming and hustle of the staff and clean, well-maintained facilities.
Apple Innovative leading edge technology products that improve people’s lives
Google Innovative software products and services designed in an open “startup” culture that emphasizes the ability over experience and happiness (offices that might be described as adult playgrounds) of the individual.
DreamWorks Animation Provides high quality entertainment combining high technology with an employee environment that emphasizes the creative talent of the artist.

 

Monitor Your Culture
Once your culture aligns with your goals, do not assume you are done.  Culture is susceptible to internal and external factors that must be regularly monitored. An abrupt increase in employment can dilute your culture and water down commitment to values and practices.  Aggressive recruiting by competitors can extract key culture individuals that effectively demonstrate cultural traits to other employees and customers.  Company leadership must be sensitive to what changes are occurring in the organization and impact on the culture of the company.

Summary
So, “Do you need a business culture?”  You will have “a” culture no matter what you do, but will it be appropriate to meet your business goals? Do not let your culture evolve by accident.

Gather your brain trust of senior people plus random employees and design the culture that best fits your business objectives and establish a plan to implement it and measure progress.  Reward those that demonstrate through their performance and compliance with the culture objective.  When necessary remove those that stand in the way of reaching your culture goals.

Yes, you do need culture!

Those businesses that have executed their culture strategy are more likely to have a positive culture that results in high employee satisfaction, motivation, and performance – and customer satisfaction.

Your competitive position and business performance is greatly enhanced by a winning culture.

Comments

  1. Great post Mike! You are absolutely right. “Culture” happens but “Great Culture” that promotes good business requires constant attenton. I consider our company culture as the # 1 reason for Westhill’s success, in a tough industry, for almost 40 years. Charlie

  2. Thanks Charlie for your comment! Building the right culture is not easy. Getting a team to embrace the values and principles for your business requires constant attention. correction, encouragement and motivation. It will not develop correctly without an intentional effort by the owner and leadership team.

    Congratulations to you and your leadership team for staying the course, holding to your cultural values during a time of great transition in the definition and practice of a good work ethic in our society.

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