Culture is probably the most mis-used over spun word of the business world. We blame culture when things go wrong, we praise it when things go right, we curse it when dysfunction bubbles and it causes us to buy, acquire or give the belief that we can grow.  We also use it out of context to make great stories for social media, recruiting and PR. Is it really to blame for all our business circumstances? If so, what is it about culture that makes or breaks a business?

 

In the early 80’s corporations, family businesses and private equity firms alike started to leverage the idea of culture as a growth strategy.  Corporations started to change shape, social expectations of work and home and technology and the internet just started making waves. The one constant attribute of profitable business was found out to be culture. Culture is the ideals, expectations, norms, values, beliefs, attitudes and morals of a collective group. The more synchronized the culture the more successful the group was found to be at accomplishing the goal. Investopia writes a great article of companies we all know now and how culture played a role in their success.  If you want to put their theory into practice, be smart about how you create corporate culture.

 

Culture is set by the board and/or executive leaders of the business, fostered by management and realized in support staff. Most boards and executives get engagement and brand confused with culture.  Culture defines how a group will behave. The brand is the visualization.  Engagement reflects if people care about it.

 

The most common mis-use of culture is as a marketing story or part of recruiting. Culture is not a marketing play. Culture is impossible to fake. Culture should not be an offering in the recruiting process. Culture shifts on a dime and if you aren’t transparent about the work and the results of the work you could be setting your company up for unnecessary turnover before someone even starts with you. Eliminate the oversell and create a job profile.

 

Business success is not solely dependent on culture. It requires a beautiful symphony of external factors like market, product timing, political and socio-economic factors and internal factors. No matter how you decide to break down the internal factors as individual functioning silos of the business it’s the culture that makes it come together. The highest performing most successful businesses (no matter the size) are successful because there is a clear alignment of motivation, process and attitude amongst the board, CEO and the executive team.

 

Some businesses struggle with culture because they don’t know HOW to create it.  Understanding HOW to create it, manage it, fix it or rebuild it requires a certain expertise but most importantly, it requires uncomfortable honesty that usually makes decision makers squirm. It doesn’t help that in general, people associate culture to demographics. Age, race, ethnicity, income level, etc. have very little to do with creating a successful culture. So, if you want to blame your culture issues on the younger generation or vice versa, you are already setting yourself up for failure.

 

If you are a business leader, looking to buy or acquire companies or just want to learn how to troubleshoot culture, evaluate these three scenarios:

 

How do you know when your culture is “right”:

  1. Goals are getting accomplished
  2. The churn of leadership is appropriate for the goals of the business
  3. The team is focused on revenue not organizational problems

 

What do you do:

 

Keep after it. Don’t get comfortable. Financially sound companies must stay on top of their A-game. That is true whether you want to be the best neighborhood restaurant, dominate your industry or build to sell.

 

How do you know when your culture needs urgent care:

  1. Goals are taking longer than normal
  2. The churn of top performing leadership is high, or your life-timers are happily staying put
  3. The team is focused a disproportionate amount on organizational problems

 

What do you do:

You have a come-to-Jesus moment. If you are on the board or the executive running the ship, take this opportunity to evaluate the business. Do you want to fix it? What if you are the problem? Think about hiring someone to help before it goes to far. There is a thin line between fixable and broken, don’t miss it.

 

How do you know when your culture is broken:

  1. The financial performance is stale or declining
  2. There is dissension in the executives and the board
  3. The team is fully engaged in problem identification and not solutions.

 

What do you do:

Fixing corporate culture is not easy. My response depends on who you are. If you are in a support role, create your pepelwerk profile and be ready for the exit package or look for a better job fit for your skills. If you are management, tell your executives the truth. If you want to save your job and your company, now is not the time to be bashful.  If you are the CEO get your head out of the sand, hire a professional, be real with your board and your executive team. Your options are to go gang-buster and clean your culture house, prepare to sell to the highest bidder or bankruptcy. Either one requires a plan- there is no easy way out and the road to recovery is ruthless.