Taken from our book, Timeless Principles of Exceptional Businesses. The chapter was written by Rusty Smith, TAB Facilitator/Coach in Houston, Texas
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What does company culture mean?
A good analogy for a company culture is the personality of a human being. Someone’s personality determines how they communicate with others, how they deal with problems, how they make decisions, and how they process information. Likewise, the culture of a company determines how the members of the organization communicate, both internally and externally, how problems are handled, how decisions are made, and how information is exchanged and processed.
But, what actually determines the culture? In my view, it is based on a shared vision for the company and the shared values of the members of the organization. It is often said that the culture mirrors the personality of the owner, and in many ways this is true… especially for small companies. This makes sense because we tend to hire people who share our values and who buy into our vision. As the organization grows, we hire more people who share our values and our vision and they start to hire people who share their values and their vision, so the culture tends to become ingrained.
It is often said that the culture mirrors the personality of the owner, and in many ways this is true…especially for small companies.
For most companies, this happens naturally. Sometimes, though, things go awry. There is an adage in the management world that, “We hire people for what they know, and fire them for who they are.” If we don’t have a well-defined hiring process, or we are growing so fast we hire the first warm body who has the right experience or credentials, hiring who is available rather than taking the time to find the right person, we risk hiring someone who doesn’t fit the culture. Someone who doesn’t share our values and/or vision. If we are lucky, it will become obvious that the person doesn’t fit and either we fire them or they quit. If that doesn’t happen and they end up hiring someone else who matches their values and their vision, we have begun to slide down a slippery slope.
A better approach is to ensure that the culture of your company isn’t left to chance. As the leader, it’s up to you to set the tone for the organization by defining the vision and values for the organization. You must live them every day through your interactions and communications with your employees, customers, suppliers and partners. You also need to make sure every employee understands the company’s vision and values and they are constantly reinforced. Finally, you need to make sure your hiring process is designed to hire people who fit the culture.
It takes time, but if you want your culture to truly reflect your vision and values, then you have to be willing to put in the effort. If left unattended or unmanaged, the company culture will behave like an untrained dog. If a dog is not trained, it does what it wants, when it wants. Its behavior is unruly and unpredictable and it may attack strangers. However, a well-managed culture, like a well-trained dog, follows the leader, is likely to be well-behaved, somewhat predictable and socially well-adapted.
How Can You Define Your Company’s Culture?
The first step in defining the company culture is to define the vision and desired values. You, as the owner of the company, must articulate a vision for what you want your company to be. How do you want customers, employees, and partners to think about your company? What niche will you dominate? What word will you “own”? What markets will you be in? What promises will you make to your customers? What measurements (KPIs) are important to you? How will you be different from every other company in the market? If you can clearly answer these questions, your vision for the company will start to emerge.
To define your values, think of the employees, past or present, you would like to clone. Why would you like to clone them? What is it about them that makes (or made) them the model employees for you? How did they behave? How did they communicate? How did they treat others? How did they solve problems? How did they make decisions? How did they handle company assets? What is common among them? What traits do they all possess? What traits do they all not possess? This is a simple, yet powerful, exercise that you can go through either by yourself, with a TAB Business Coach, or with your leadership team. A set of descriptors, adjectives, or phrases will start to emerge that will evolve into your “value words” or “value phrases”.
Jumpstart Your Company’s Cultural Evolution
Consider holding a company meeting where you roll out the new vision and values. For the vision, you need to paint a picture using a lot of visional language. Tell them why it is important for you. Tell them why you think it is important for them. Tell them why it is important for your customers. For each value, have a story that demonstrates that value in action. The stories might be about a customer, an employee, a strategic decision, or anything else that clearly demonstrates how the values came into play. The more stories you can tell, the more people will understand the value. Finally, provide some examples of how you and your employees can implement these values and apply them to processes, such as decision-making and communications. Encourage them to come up with ideas for how the values can be demonstrated.
How to evolve the company culture
The culture isn’t going to change overnight. It must be consistently reinforced. The first step is to personally live the culture you create—a responsibility that can be challenging and rewarding when placed in the proper perspective. If you don’t walk the walk, no one else will either.
I once heard a story about a young boy obsessed with eating sugar that illustrates living the culture. Despite his mother’s pleas and efforts to get him to stop, he refused. Desperate, the mother decided to take him to visit his idol, hoping he could help break the boy of his habit. The mother and son walked for miles in a scorching heat to Gandhi’s ashram. When they met the leader the mother said, “My son consumes too much sugar, will you please tell him it’s bad for his health?” Gandhi thought about her request and told them to return in two weeks. Although the mother was perplexed that Gandhi didn’t immediately admonish the boy’s behavior, she did as she was instructed.
The first step is to personally live the culture you create—a responsibility that can be challenging and rewarding when placed in the proper perspective. If you don’t walk the walk, no one else will either.
When they returned two weeks later, Gandhi looked directly at the boy and said, “Boy, you should stop eating sugar, it’s not good for your health.” The boy nodded and said he would do his best to stop. Puzzled, the boy’s mother turned to Gandhi and asked why he didn’t tell her son to stop eating sugar two weeks ago, to which he smiled and replied, “Two weeks ago I had an obsession with sugar and I needed time to cut back myself.”
Another idea to reinforce your values is to make them constantly visible. One TAB member has her company’s vision statement stenciled onto the wall of the company lobby so every employee, customer, and supplier sees it when they walk through the door. The values are printed on the back of each employee’s security badge. At every meeting, one of the five core values is selected and each employee is asked to share an example as to how they have recently applied that value to their work. Additionally, there is a section for each value on the performance review template, so the employee and the manager can provide examples of when the value was applied or violated.
Birds of a feather
When interviewing potential new team members make sure you discuss your company’s vision upfront. Engage candidates in a thoughtful and open discussion about the company’s vision by asking for specific examples about how they plan to achieve the stated vision and what will drive their day-to-day priorities. Ask them to tell you a story about how they have demonstrated a particular value in the past.
For example, a TAB member has “company stewardship” as a value. The company has an Employee Stock Ownership Plan (ESOP), so the employees have a financial stake in the company. When interviewing applicants, he asks them to tell him about a situation where they saw a co-worker misuse company resources. How they handled that situation allows him to gauge their ability to handle sticky or difficult situations.
Key Insights
Your company culture cannot be left to chance. As a business owner, your vision and values define the culture of your business. Hiring employees that share your vision and live the values in their daily work activities will ensure that your business has a strong culture, and that it is the one that you actually desire.
- A company’s culture or “personality” is a reflection of its leader.
- The leader must articulate a compelling vision for the company and ensure that everyone in the organization understands and shares that vision.
- A successful leader lives the values every day and reinforces them in every interaction and communication with employees and customers.
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