True, it’s never been a short cut to an instant fortune. If you’re after that, launch a new security app that’s to die for.
Meanwhile, most businesses just want to do well. They don’t expect to conquer the world, simply to succeed on their own terms.
That does not exclude becoming a Jeff Bezos– now the first or second richest person on the planet due to Amazon. Yet even he used culture to make his fortune, by taking a long term view of creating a company that was not a quick hit with no short cuts.
An unrelenting focus on culture can help the average business to succeed. This is not a “do it one day” message. It’s a do-it-now-and-do-it-continuously? Why? Because research consistently shows companies that do focus on culture and invest in pursuing the associated core values perform better than ones that don’t.
Take risk for example. Regulators have finally got around to pin pointing culture as a good guide for whether a firm handles risk well. Firms that do so tend to succeed more than those with a more cavalier attitude to risk. See for example Thomson Reuters latest report on Culture and Conduct Risk 2017.
Or take start ups. While an estimated 90% of start ups fail, there’s less doubt about why. Often it reflects poor business ethics, with the newbies going for the quick fix and short term gains. In India for instance, most (64%) venture capitalist blame poor business ethics as a reason for failure, see for example: Entrepreneurial India , IBM Institute of Business Value 2016.
Or consider the obsession of many businesses with strategy. Not only is this hard to define, it’s far less important as an explanation of success than getting the culture right. Or as management guru Peter Drucker once put it more memorably: “culture eats strategy for breakfast.” A slightly more current interpretation is: firms that want to succeed need to develop the right culture, since this can provide a sustainable competitive advantage.
Favorite culture tips
Here then are my top 10 quick tips that any business can adopt and gain a competitive edge over more short-sighted operators.
Purpose: Clarify for everyone the purpose of the business. Never as easy as it sounds, enrol others in nailing down the driving purpose; make it register in a visceral way—that is emotionally–with every single person in the company.
Clarify: Get clear what your company means by culture, and how to make sense of it. The time worn -“how we do business around here” is a start but it’s not specific enough. Try to become more precise.
Values: Express the three to five core values at the heart of your business as single words or short phrases. Values are the unchanging forces driving a company. They stand the test of time. Can you name them right now? If not, you have yet to fully leverage culture for the benefit of your organisation.
Check: Devise cost effective ways to show core values being applied on a daily basis. Identify stories, case examples and successes to be shared across the organisation. Find credible and useful ways to measure their impact or lack of it. Publicize the results across the organisation so people realize what matters.
Be the culture: Getting out there and talking with people about the culture may sound obvious. Yet so many business people fail to do this; the top team needs to show by their individual behavior the core values in action.
Encourage openness: “Feedback is the breakfast of champions” claimed management expert Ken Blanchard. Over the years he’s been proved right. Do people in the company feel they can speak up without fear of ridicule, disrespect, or even punishment> If so you have a recipe for success.
Internalize: Build core values into all policies, procedures and initiatives so they become hard to ignore in daily activity such as decision making.
Reward: Look for opportunities to recognise people for bringing the desired culture and core values alive. Don’t take such behavior for granted as “part of the job”. Instead show appreciation in a variety of ways, not just through financial means, for example by praising exceptional behavior.
Many individuals and firms struggle to find practical ways to bring company culture to life and turn it into a money making competitive advantage. Witness the dominance of codes and compliance technology in so many firms. Yet unethical behavior, scams and dishonesty continue apace.
One thing’s for sure. A culture of integrity more than pays off in a business sense. Firms with a strong culture of integrity outperform on a whole range of criteria those without such a way of behaving.
Rate the level of commitment in your company to pursuing each of these top 10 tips. Score the commitment level on a scale of 1 to 5, where 1=low or no commitment and 5 is full commitment.
Add up the individual scores to give an overall figure. Here’s how to interpret the result:
Score 40 to 50
An encouraging result. The focus on culture in your company is strong and you almost certainly have a competitive advantage right now.
Score 30 to 39
Your company is doing many of the right things to build its culture into a competitive advantage; but there’s a lot more you can do. Choose two of the lowest scoring tips and explore how to enhance these over a six month period.
Score 10 to 29
Your company has yet to fully appreciate the power of culture to build a competitive advantage. Time to discuss among the senior team the importance of culture and how it can contribute to success. Take the three lowest scoring tips and explore ways to enhance what’s happening with the aim of making a difference within a six month period
The top ten culture tips reflect best practices. Each can be fully justified in terms of their impact on company performance.