Culture is one of the most misused and overspun words in the business world. We blame company culture when things go wrong, praise it when they go right, and curse it when dysfunction bubbles and it causes us to buy, acquire or give the belief that we can grow. We also use culture 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 company culture that makes or breaks a business? We explore the topic of company culture, the evolution of the concept and the challenges of getting your culture corporate right.
In the early 80s, corporations, family businesses and private equity firms started leveraging the idea of company culture as a growth strategy. Corporations started to change shape, social expectations of work, home and technology, and the Internet started making waves. The one constant attribute of profitable businesses was culture. Culture is the ideals, expectations, values, beliefs, attitudes and morals of a collective group. The more synchronized the culture, the more successful that groups were at accomplishing their goals.
Investopedia writes a great article about how company culture played a role in the success of big-name companies. If you want to put their theory into practice, be smart about how you create a corporate culture.
Company culture is set by the board and/or executive leaders, fostered by management and realized in support staff. Most boards and executives get engagement and brand confused with culture. But culture defines how a group will behave, the brand is the visualization and engagement reflects if people care about it.
The most common misuse of culture is as a marketing story or part of recruiting. Company culture is not a marketing play. It is impossible to fake and should not be used as 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’ll set your company up for unnecessary turnover before a new employee even starts. Eliminate the oversell and create a clear job profile.
Business success is not solely dependent on company culture. It requires a beautiful symphony of external factors like market, product timing, and political, socio-economic 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 brings it all together. The highest performing businesses (no matter the size) are successful because there is a clear alignment of motivation, process and attitude among 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, manage, fix or rebuild your corporate culture requires a lot of expertise. It also requires an uncomfortable honesty that can make decision-makers squirm! In general, people associate culture with demographics. age, race, ethnicity, income level, etc. But they have little to do with creating a successful culture. If you want to blame your culture issues on the younger generation or vice versa, you’re heading for failure.
If you are a business leader looking to buy or acquire companies, or you just want to learn how to troubleshoot company culture, evaluate these following three scenarios:
You will know you are on the right track when:
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 your business to sell.
The warning signs should be alerted when:
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 too far. There is a thin line between fixable and broken, don’t miss it.
You will release your company culture is in a mess when:
Fixing corporate culture is not easy and it depends on who you are. Here is what you should consider:
Your options are to go gang-buster and clean your culture house, prepare to sell to the highest bidder or head towards bankruptcy. Each option requires a plan. There is no easy way out and the road to recovery is ruthless.
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