In their best-selling book, Built to Last, authors James Collins and Jerry Porras set out to determine why some companies outperformed their competition. They took a group of what they called, visionary companies, and compared each to their counterparts within their respective industries.
So for example, why does Disney consistently outperform Columbia. They’re both good companies. They’re both about the same age. They both had roughly the same opportunities for success, but in terms of revenue and stock value, Disney is the clear leader. Why has GE outperformed Westinghouse; or Proctor & Gamble consistently beat Colgate? At the time their book was written, Collins and Porras even compared Boeing to McDonnell Douglas. As you know, McDonnell Douglas no longer exists because Boeing bought the company in 1997.
There are a number of characteristics that set great companies apart from good companies. One of those characteristics is culture. I have found this to be true with many of my clients as well.
Often, great companies possess a cult-like culture that people are attracted to.? The tech industry has really taken on the whole idea of company culture and has helped to transform the way business is done. Companies like Apple, Google and Microsoft don’t have headquarters. They have campuses. These campuses have state of the art cafeterias, basketball, tennis and volleyball courts. They have plush lounges, exotic company retreats, day care centers for both kids and pets. You’ll never hear anyone referred to as an employee, but rather, team members. Their benefit and incentive packages are better than most companies as are their working environments.
It is often very obvious when a company has a strong culture. Toms of Maine employees, for example, used to go around saying that there’s a “Tom’s way of doing things.” That says it all to me.
Don’t misunderstand me, though, these companies aren’t soft. Disney is notorious for horrible pay and Googlers are often found working late into the evening as are many of the workers at these companies. The pressure for Nordstrom’s sales associates is so intense that nearly 50% of new hires don’t make it past the first year. Those that do, however, are as dedicated as any worker you’ll find.
Now, my clients are much too small to have campuses and exotic company retreats. And I don’t think a single one of them provides their workers with doggie day care, but many of them still maintain a unique and almost fanatical company culture in some cases.
With such a culture, employees rarely need to be supervised. I often observe workers using initiative and taking it upon themselves to make things better. You’ll never see them rushing out the door at 5 o’clock and many even take work home with them. Everyone knows the company’s USP and they all buy into changes that improve company efficiency. Office meetings are pretty laid back, but can also get pretty heated since most workers are very passionate about projects, but you rarely see drama.
How do you know if you have a strong company culture?
Cult-like work environments get everyone going in the same direction and people often push each other to perform better. It’s like a second home to many of them. If your staff believes that they matter, that their opinions matter, then you’ve got a company culture. When listening to your team members, if they use words such as “they and them” a lot rather than “us and we’” then chances are your culture needs some refining. If you find yourself micro-managing it could be that your workers are not taking initiative – or it could mean that you’re just not willing to give up control.
Try this, ask each of your staff to take 5 minutes and write down your company values, mission statement, unique selling proposition and goals. Once time is up, compare notes. If they’re different, then you know you have some work to do. If you’ve never articulated the values, mission statement and USP, then use this meeting to come up with some.
Another good way to gauge your company culture is to monitor your customer reviews in Yelp, Google Places, Yahoo Local (although Yahoo reviews are still too easy to fake), Angie’s List and any other platforms here consumers regularly review your business. What are they saying about your company? Pay more attention to the negative reviews than the good ones. They’ll tell you a whole lot more such as this little gem of a review for? women’s boutique. Consumers will often make comments that are directly related to your company culture such as, “the waitress was a real snob,” or “it took the sales clerk 3 minutes to acknowledge me.”
It’s important to remember that company culture isn’t about happy employees so you don’t have to rush to hire an in-house masseuse. It’s about getting the most productivity out of your team as you can. Google and Apple can get away with things that you can’t because so much of their business model relies on innovation and creativity. For the rest of us, we need our workers to be productive.
So how can you develop a highly-productive culture in your company? Well there’s a few things that you can do. Let me outline a few:
Leadership is Essential
It starts at the top. It’s important to recognize that visionary companies don’t necessarily have charismatic leaders. In fact, Collins and Porras point out that often a charismatic leader can get in the way of company culture. Walt Disney wasn’t super charismatic and I doubt any of you can name the current Disney CEO, and yet, the company continues to attract top people who buy into the culture of Disney.
The biggest mistake I see leaders make is that they don’t realize what it’s like to be anyone, but themselves.?
The leader DOES need to set the tone, however, and he or she needs to be able to communicate the core company values and USP to everyone on the team.
The biggest mistake I see leaders make is that they don’t realize what it’s like to be anyone, but themselves. When there are disputes among workers, they often don’t understand what the big deal is. I had a manager who used to love to incite competition among sales people. He thought the contests would push sales numbers up, but what it really did was create animosity among the workers in the boiler room while he sat in his big comfy lounge chair in his corner office. He was the perfect example of a manager who was completely out of touch with his employees and his company culture suffered.
You have to understand what motivates each individual person on your team.
Be willing to delegate and give up control. Trust is a hard thing to give if you feel as though your workers have failed you in the past. But without it, you’ll continue to need to oversee their production and you’ll never grow. Learn to step back and trust your team. Let them know that you are trusting them to complete a very important project without your oversight. You’ll be surprised how well they meet the challenge.
What kind of culture is right for your company?
Determine the culture you want to have for your company and communicate it, along with your core principles, and set up practices that reward that kind of behavior. Be sure to keep that message front and center. It can’t just be lip service, you need to create incentives that cause workers to think of the culture in everything they do until it becomes second nature to them.
Regardless of what changes are made in your industry or what happens to your company, your culture should remain intact. If your company went from selling mortgages, for example, to life insurance, your culture should carry through that change. It is permanent.
If you’re creating your company culture from scratch, be sure to include everyone… and I mean everyone. Have a meeting to discuss it. Put it all out on the table and make your team part of the decision making process. If they participate in the idea then they’ll be more committed to its success. They’ll take ownership of it.
It’s about People
Speaking of personnel, you must hire the right people. Often we hire someone because of their experience or ability, but visionary leaders hire people who fit within the company culture. Everyone must buy into the company mission statement and USP or they shouldn’t be working there. It’s very difficult to tell if there is a right fit or not during an interview so consider giving new hires a 90-day probation. It’s hard to fake it for 90 days. By then you’ll know if someone is the right or not.
Know when it’s necessary to let go of someone. It’s easy to cut the fat from an organization, but when you have to cut a productive worker because they don’t fit within your culture, that’s hard.
The ones you keep; give them more responsibility, not necessarily more work, but more that THEY are in charge of. With more responsibility comes more commitment. Those who don’t want the added responsibility are people you don’t want to keep. Expect a lot, get a lot.
I’ve observed that my most successful clients set a very high bar for their team members. They push themselves to go the extra mile. You can’t create a company culture with low or just average expectations.
Communicate the Future
People want to know where the company is going. You need to communicate clearly where you intend to go with the company and how your staff is a part of that vision. If they know where they’re going, they will know what to do in order to get there. It’s so much more productive for a team to work toward a goal than to just come in day in and day out, doing the same work with no real direction. How is anyone going to appreciate that culture?
“You can’t motivate people, you can only create a context in which people are motivated.” – Brad Feld
You can have a creative wall map made and post it in several places in your work place, showing where your company is going. This gives everyone a visual representation of company goals. Make sure the mission statement and USP are clearly visible.
Know How to Motivate
Brad Feld has a famous quote, “You can’t motivate people, you can only create a context in which people are motivated.” You can do this by rewarding team successes.? You can also let workers know that you’ve invested in them. You must show that you will go out of your way for them before they will go above and beyond for you. Encourage and reward initiative; self-thinkers and self-starters. Make sure they know you’re looking for out-of-the-box thinkers.
Decisions and goals are not the only thing you can share. A piece of the corporate pie can get your team to work toward a common goal. You can give them a share of the company or you can provide an end of year bonus that is contingent on company performance.
Don’t be Afraid to Set Big Goals
Create a big company-wide objective. When the Icetone factory, a countertop manufacturing company in New York, was completely destroyed by fire, CEO Dal LaMagna thought the company was through. He said it was like dropping your cell phone in the toilet. But his people rallied and got behind the project to rebuild. Workers volunteered to do things that they were not hired or trained to do, just to help out. They worked late and on weekends to come in under budget and before schedule.
Now, you don’t have to burn your business to the ground to achieve this kind of unity, culture and commitment, but try to find a Big Goal that everyone can get behind. I’d even ask them to determine the big goal that you want to achieve. Then, make that achievement part of the daily culture.
You must be about more than just your bottom line. One way to inspire a company culture is to adopt a cause. Doing something entirely altruistic, and not for profit, makes people feel better about themselves and about your company. It becomes more than just a work place, which is exactly what you need in order to create a company culture. You can adopt a local park and help keep it clean and safe. You can adopt a school and spend time tutoring the local kids. Again, put it to your team for a vote. These are the types of decisions that they can make.
My company gives to world hunger organizations. You’ll notice that I don’t promote it in any of my sales material. I do that because I do not want people to purchase my products for that reason. I know a lot of companies promote the fact that they support charities and that’s fine if you want to do it, but I find there is more value not promoting it because the giving is more real that way. I don’t know. I just think sometimes you have to give back for no other reason than it’s the right thing to do. I don’t need to promote it. I just do it.
Regardless, altruism goes along way when trying to create a company culture.
How do you know when you’ve got it?
How do you know when you have a successful company culture? When it no longer needs you. It’s like an Army Ranger platoon. Those guys don’t fight because their platoon sergeant told them to. They fight because it’s their job, but mostly, they perform so well because of each other. They are more afraid of failing each other than they are of dying in many cases. Once you’ve created an atmosphere where workers perform for each other and because they truly see themselves as the best, then you know you’ve got a solid company culture.
But culture is a lifestyle change. It’s never finished. Don’t think of it as a 2 year project and then you’re done. The visionary leaders are always observing and improving company culture.
If you’ve been operating a certain way for a long time, it’s not going to be easy to change, especially for the leaders. If you’re the owner of the company, you’ll have the toughest time with this, but if you can lead by example and approach key staff members individually to get their buy-in to your new company culture, then the sky’s the limit in terms of what you can achieve.