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Research Triangle Business Advisors

August 2013 Newsletter

 

The term “company culture” means different things to different people. If you ask 10 individuals to define company culture you will probably get 10 different answers. Common parts of the answers will likely be that it has to do with keeping employees happy or a comfortable environment. The sad thing is that many employees are not looking for happy at the job – they are more interested in things like challenge, advancement, camaraderie, and generally building their legacy. Therefore developing and documenting your company culture is not a simple task because of the diversity of your employee base. However, that company culture can help you build more synergy and productivity in your workforce which fuels your company growth and success.

 

Bob De Contreras

919-280-1307

Bob@rt-ba.com

www.rt-ba.com


Building A Great Company Culture

Often organizations are challenged to keep up with rapid changes in the economic environment, demographics, and technological advances. Cultures evolve whether businesses are aware of it or not, and in some instances an unhealthy culture can create serious consequences such as

  • Inability to attract and retain quality people

  • People not working together

  • Apathy and lack of enthusiasm for the business

  • Quality and service challenges

  • Lack of initiative and responsibility

So the question is: How do you build a great company culture? A structured approach to developing your culture would include the following:

Values. Values let the outside world know what your company is all about. To come up with your company's values it makes sense to get everyone's input, as they will need to embody them and live by them. Take a good look around inside your company and see what the current values are. If they are not what you desire, create values that will guide the people and the company toward success. For example, if your company isn't the best at responding to clients you wouldn't want to state a value as "we communicate when convenient".  You may want to create a value like, "timely communication." That value would attract those that expect timely communication and over time, it will become self-managing, while helping your employees and company to reach their full potential.

Strategy and Size. Organizational development consultants say a “good” culture is one that supports the company’s business strategy. So, for example, a large company with many products and services might need a culture where people’s roles are tightly defined. This would be good for production, but there wouldn’t be as much room for innovation, nor flexibility on how employees do their job. On the other hand, a company where innovation is essential to its growth would need a culture where employees are allowed to create and try new things. Therefore a successful company culture must consider company strategy and size.

How we operate. After considering strategy and size, a company needs to flesh-out the company culture with “how we do things around here.” This includes things like business goals, who we hire, how we manage, and our work values.  To determine these items, company management needs to answer questions like, how we make money, what commitments we make to clients, what sets us apart from our competition, and how we retain top performing employees.

Personality. “Personality” is also a part of company culture. If your sales people are calling on high level bank executives, they need to look like they just stepped out of a Mercedes – even if they don’t own one. Likewise, if their target customer is a Lowes Home Improvement or the farmer’s market, they should look like they just stepped out a Ford pickup truck. It should go without saying, that many large companies will have both large and small clients and therefore need to hire both types of personalities. In that way, the company strategy tempered by personality, defines the culture.

Purpose of perks. So, we are seeing that company culture is not about employee happiness, business perks, or relaxed management style. It’s about supporting the company’s employees by using these perks to support them in doing whatever the company does best. The cultural attributes should be targeted at what is required to drive company success and growth in a competitive market.

Cultural change. For fast growing small companies or large companies, the culture has to change as the business strategy or market characteristics change. For example, the culture of a start-up company might look like: 16 hour workday, brainstorming sessions, lots of experimentation and innovation. But, as the company becomes more mature with a large market share and established products, the company culture focuses on preserving what’s been built, through a culture that smaller/newer companies hate: bureaucratic leadership, immovable structure, policies, procedures, and rules.

Multi-cultural. Organizational consultants say a leader should determine the company strategy by sitting down and asking “what is the company’s promise to a customer?” Is it to create the best product in the market (superiority)? To be the predictable, systematic service provider (confidence)? Or is it to help people and organizations fulfill their potential (improvement)? If a company has more than one customer promise, then it must have more than one culture.  The temptation to merge promises and therefore cultures should be avoided – have them be separate operations/divisions in the company; each with its own culture. For example, designers and engineers need to be able to forget about the company’s stock price if they’re going to create products that could revolutionize industries and meet a superiority promise. But the sales force or production departments can’t forget about stock price. They need to operate based on rules and structure to ensure the company meets its confidence promise to shareholders.

Sustainability. Startup company founders are so focused on getting their products to market, they often don’t think about what it will take to sustain their companies as they grow. It’s a “slap in the face” when all of a sudden the startup gains traction and has to hire a workforce, get them aligned behind the product, and sustain its evolution. That’s when company culture – policies, norms, procedures, rules and structure – really start to matter for the company’s survival.

Management style. In addition to hiring practices, reward systems, and values, company culture should include what leadership styles best suit the products or services delivered by the company. In the startup company, culture changes are made based on the needs of the clients. As the company grows, management teams should be using more democratic, collaborative leadership styles or systematic top-down leadership styles depending on the needs of a particular product. This flexibility in managerial styles is important. For example, some products may need to be produced quickly, have higher quality, and are needed on a hard deadline, and the company needs to be run strictly to make sure this happens. Other products may change often or be custom made and may require a collaborative approach so that the team can build on each other’s ideas and work together to solve design or manufacturing problems.

So, we have seen that the term “company culture” has to do with “understanding and managing people to support client needs balanced with company growth.” It’s the area that’s been inevitably and frequently the hardest for managers to get their arms around: leading and managing the human resource.


Cary | Raleigh | Research Triangle Park | Greensboro | North Carolina
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