The Culture Component of a Successful Business
I recently completed a series of blogs, which examined in detail my 5 Ps of Business Success – “People,” “Product,” “Process,” “Pricing,” and “Planning” – all of which affect profitability and all of which are integral to the business operating model I’ve developed. But there’s another component of business success that is often given little attention. It can be challenging to define, develop, and implement yet it affects literally every aspect of business. What is it? Culture!
Culture is a set of values a company adopts that define the way it does business, both internally and externally. If you don’t cultivate and nurture your culture, however, it will be defined for you by the people you hire and how you endorse or ignore their behavior. Without leadership to direct it, culture will evolve and run on its own – sometimes off into the weeds.
Culture is related to the “People” component of the 5 Ps in that it is very much about a business owner’s attitude about their employees and how they treat them. Your culture will dictate the mindset of your staff and how your customers are treated – typically a mirror of how you treat your own employees. Additionally, employee retention or turnover is driven by culture – people who are not of your culture will likely become uncomfortable and go elsewhere, even if their skillset is a fit.
Bottom line… Employees who are treated with respect and engaged in the business in a way that’s motivating for them are happy and productive – which in the end, affects your bottom line!
How Can You Assess and Implement Culture?
- Identify three to five words that define your culture.
- Look at the culture you have. Is it the culture you want?
- Ask yourself…
- Are they in the right jobs?
- Do we have a high turnover rate?
- Are my employees happy and engaged?
- Are there issues with customers?
- Clearly communicate your culture to your people – it’s more than the motivational signs on the wall.
- Model that culture through your actions and those of your leadership team.
- Include discussions about culture as part of your review process.
- Recognize and reward actions that are consistent with your culture.
Culture and Transparency
In his book, Principles, Ray Dalio advocates the practice of radical transparency in business culture. He suggests that systems be designed so that mistakes and errors made can be acknowledged without the worry of negative repercussions. Instead there is an attitude that mistakes and failures are opportunities to talk about what happened, learn from it, and implement changes so that those mistakes don’t happen again.
He notes that this practice has to be a 360 degree effort – that owners and managers, not just employees, must be radically transparent about their own mistakes. He promises greater success to companies whose cultures accept the reality that mistakes happen and use them as opportunities for growth and improvement.
Culture in My Own Work
Culture is an element of my criteria for determining whether potential clients are a good fit. When I visit a prospective client, happy and engaged employees demonstrate to me that a culture exists where relationships are valued. Since relationships are a foundation of my business, that’s critical. Since I work withcompanies on sensitive issues around money it’s important that I develop deeper relationships. My work with a company is not just about profitability and cash flow. I care about the company as a whole, and I want to be able to speak to the issues I see beyond those that are financial. My goal is to assume the role of trusted advisor, and I put the upfront work into building solid relationships with my clients in order to gain that trust. Having built my own $20 million company I can relate to the issues they are facing – big and small – and have insight into overcoming the challenges they might encounter.
A trusting relationship with a client also gives me the opportunity to help them assess and refine their own culture. I likely view their culture from a different perspective than they, who are deeply immersed in it.
Wired to get to know people, I’m my highest and best self and do my best work when I have healthy relationships with my clients. Those with whom I enjoy working most treat their employees with kindness, empathy, and transparency. Like Dalio, I look for meaningful work and meaningful relationships. The best way to do that is to have great partnerships with great people.
I’d welcome the opportunity to help you assess and nurture your company culture – an aspect that is crucial to your business success but so often ignored. Contact me for a complimentary discovery call.