DEFINE YOUR BUSINESS’S CULTURE
First, let’s take a look at what CULTURE is NOT:
God save us from silicon valley companies. Culture is the character of your business. If your business was a human being, CULTURE would be its personality. Let’s find out what the main component of a business’s culture is: PEOPLE.
YOU + YOUR PEOPLE
Your business is made up of people. In the beginning, there’s only you: the founder. Gradually, you bring in more people, one by one. When we talk about culture, we’re actually talking about people. Culture and people are inseparable. The culture of a business is shaped by the people in the business; and the people in the business are shaped by the culture of the business. It’s a self-regulating cycle.
It starts the moment your business is created. You could even say that it begins long before, since it’s essentially a manifestation of the mindset and attitude of its founder. Behind every successful company, there’s always an individual at the top who has a clear vision of what the business should BE. Actually, the business is just the VEHICLE of the owner’s vision. People admire this kind of person, especially if the WHY of the business is virtuous and valuable to society.
When trying to understand CULTURE, you’ll be forced to dig deep to find out the purpose of your company. Because if it’s only making money, you’ll be good by yourself, but you won’t be able to attract creative, hard-working people. Have you ever heard a team say, “Our goal is to make our owner rich”? Such a workforce is unlikely to exist. Don’t try to lure people with something vague such as, “My goal is to increase the value of the company,” because what you mean is, “My goal is to be richer.” You won’t attract the right kind of person with that approach.
Only a person who’s completely lost their ideals sees money and possessions as the only reasons to enter into business. So it’s your job to define the WHY and the HOW of your business. It’s called the mission statement. I’ve met business owners who were making $25m, $50m, and $80m dollar in sales; and 80% of them had a mission statement. Is that by accident? Not a chance. Even if you’re on your own by now, you HAVE to have a mission statement, so be sure to WRITE IT DOWN.
Refine it over time, work on it, and review it regularly to remind yourself what you work for.
The founder and the first ten to twenty employees—and the interaction between them—determine the character of the firm, that is, the culture. People who are hired from then on are defined by the culture that was initially set up by the first ten to twenty people of the company, alongside the owner. New hires adhere to and carry the culture on.
Therefore, I can’t emphasize enough the importance of YOUR own character, YOUR integrity, YOUR work ethic, and the way YOU communicate. Because your business is an extension mainly of yourself and of the first people you hire. Your business is your mirror, especially in the beginning. If you can picture the kind of people you would like to attract, and the kind of culture you want your company to have, but you think you personally lack something (say, for example, you’re not a great communicator), the people you need to hire first should be excellent communicators.
You can’t convey something if you lack the rudimentary skills and knowledge to do so. Either upskill yourself or headhunt talent with those skills. It’s like with your kids, you have no chance of teaching them patience or discipline if you’re not patient and disciplined yourself.
The culture of a company is also determined by its history: the important dates, events, contributors, ideas, and flagship products or services. Culture is at the core of your business; it’s the nature of your business. You can easily change your strategy, but changing your culture once it’s set up brings about confusion, because it’s almost as if you’re erasing the story of the business.
For example, in all my companies, one of the core components of culture is CONTINUOUS IMPROVEMENT. So ongoing training has always been one of the most important aspects of my businesses—and all my people know that. That’s in the DNA of my businesses, and has been from the very beginning, starting with myself.
What dates mark the history of your company? Are they linked to historical events in the country or a region? Who are the founders? Who else has contributed to the development of the company? What are your flagship products or services? What striking anecdote(s) could be interesting to tell employees during their induction?
By identifying these elements, you emphasize the human dimension and show that the business isn’t just about performance. Rather, the stories of its past promotes its integration into a temporal, cultural, and social space within the microcosm of your organization. It’s also about highlighting the men and women who participated in its creation and development. Reminding others of the context gives deeper meaning to the company and evokes a sense of authenticity.
What do you think happens when a company goes public? You’d be correct in thinking that, most of the time, the whole culture changes. The main reason is because people change (or are replaced), and those who remain change their behavior, their vision, the way they work. The historical values are flushed down the toilet, and the history of the business becomes … well, history. That’s one of the reasons why I hate when a business goes public.
COMMUNICATION
The way people communicate in your company demonstrates the confidence your people have in each other. Let me share with you a quick story. When I had my gift basket business, one particular employee made a mistake that resulted in dozens of gift baskets being sent to the wrong recipients. Instead of hiding away and praying that nobody noticed, he told his manager as soon as he discovered the mistake. The manager (who I trained) thanked him for bringing it to his attention and they were able to fix the problem fast. Later they talked about it in greater detail, free from judgment, just to gather the facts and put in place measures to ensure nothing of the sort would happen again. The employee who made the mistake was involved in tweaking the existing procedure and felt empowered in improving the business.
Every manager would like to work with employees who acknowledge their mistakes. But few managers make the effort to thank such a person, and instead end up lecturing them. Admitting to a mistake isn’t easy, because nobody comes to work to do a bad job. It’s your job to show them taking accountability is actually a strength, one which only a mature person could take, and that it results in a better outcome for all concerned parties.
Your business’s culture shouldn’t just be an abstract idea communicated by leaders at annual meetings and away days. It must be expressed through concrete actions. In other words, it’s an experience that must be lived by employees on a daily basis, during and after work. Your culture has its own language, too.
Most would say they like creative people, but often those same people laugh and ridicule an idea that seems odd to them. That’s the WRONG APPROACH.
If you truly wish to develop and nurture original ideas, you must decide that judging or devaluing an idea is forbidden in your organization.
Lead by example. If anybody in your team ridicules something of an unorthodox nature, be sure to challenge them.
Another example: during your one-on-one meetings, always ask your people what they should have done better. And reward them when they come up with something new. Then tell them to do the same within their own teams. You lead by example. You don’t want your people to hide what went wrong, you want to KNOW it to be able to improve it. So don’t blame them when something bad happens. That’s effective communication, and that’s a crucial aspect in the culture of your business.
During one of my M&A consultations, I discovered that my experienced client was mostly worried about what would happen after the acquisition of a company (helping staff to go through the merger; bringing everyone on board successfully; creating a shared vision that everyone can latch onto etc)—while most of my clients are concerned about what to do before the acquisition (finding the right target; structuring the deal; anticipating technology changes etc). For this seasoned business owner, integration was the most important part of an acquisition … and the most important part of integration was when the new business culture comes in … and the most important part of the culture was the way people communicate with each other.
See how far effective communication goes in the culture of a company.
CONCLUSION
In summary, the culture of your business is determined by:
HOMEWORK
Start by writing your business’s mission statement. What is it exactly?
Some say that the mission statement is just one sentence; which if it happens to be salient and inspirational, that’s enough. It can be short, almost like a tagline or a slogan. Regardless of length, it must clearly define your ideology and the direction you want to go. What’s the change you want to see in your ideal world? Why did you start your business? Your mission describes what the company wants to achieve as part of a wider community, or the world. The mission statement defines your culture. You personify it.
My gift basket business’s mission statement was: “We bring smiles, one gift basket at a time.”
Then I added three points to make it clearer:
The first point is oriented towards our clients; the second is oriented to our team; and the third to ourselves as individuals. When you have a solid culture within your company, you attract a whole different type of person, whether it’s your clients or employees. Your employee turnover goes down; you gain traction; staff satisfaction goes up; all of which translates to the economics of the business.
A word of warning though: never set up your WHY, that is, your business’s GRAND VISION, to please or attract people. It must resonate with you; that’s the priority. Then it attracts other people who share your business’s grand vision and ideals. That’s how you build a business’s culture.
Have you heard the famous quote that states: “Culture eats strategy for breakfast?” I like it; it’s funky … but it’s not entirely true. You can’t just say this sentence like that and leave. It deserves some clarification. It’s only true from a certain point of view. Culture isn’t something you can count on to launch your business. Strategy is the father of culture. Without a great culture, your company’s growth will be stunted. But without the right strategy, your business won’t be able to survive. So the first thing to devote your time and energy on, chronologically, is your business’s strategy. Then once you’re on the right track, once you’ve got a proven business model, once you’ve made some money, a great culture will enhance the entire project and help you scale up.
The culture of your company = your strategy2.
That’s why you’ll hear umpteen stories from entrepreneurs who’ve made millions and yet never cared much about their business’s culture. They just happened to have a strategy that worked. But you won’t find anybody who launched their company with a killer culture and yet no strategy. When you start with strategy first, everything else falls into its place.