By Bob Dearing, CFE
Let’s begin by defining what culture is. There are literally hundreds of different definitions, but let’s start with a very simple one:
Culture refers to the shared values, attitudes, standards, and beliefs that characterize an organization or group and define its nature.
Culture is not the sole property of the business world! It exists in families, social clubs, organizations and neighborhoods. Even your Saturday-morning golf foursome has a culture. Different cultures surround us every day. In any organization, culture tends to take on a life of its own that can range in intensity from positive to toxic, from low-energy to electric.
For our purpose we will focus on the various aspects of culture in the workplace.
Where Does Culture Come From?
Most people believe that as companies develop and grow, culture flows from the top down. In some stages of company development, that is true. The problem is that over time, if not closely monitored, culture can deteriorate and damage the brand.
In the early stages of your company’s life, you can guide culture by communicating a clear vision, mission and set of values. As your company matures, however, culture becomes more a result of what has taken place; people have come and gone, priorities have changed, market conditions are different and as a result your culture has become an outcome of those events.
Where Do We Begin Creating Culture?
As a starting point, every company should have written Vision, Mission and Value Statements. If you do not have them written, they are of little to no value to the organization. These documents form the bedrock of your business culture but more importantly, they contribute to a healthy cultural environment.
Culture is not a theoretical process. It is an outcome. Gino Wickman, in his book Traction, crystallizes the areas of these events into six core components. These are Vision, People, Data, Issues, Process and Traction. All are important but for our purposes we will focus on just four:
- Vision: Successful owners have a compelling vision for their organization and know how to communicate it to the people around them. Everyone in the business must see the same clear Image of where the business is going and how it’s going to get there.
- Issues: Issues are the obstacles that stand between you and your vision. Don’t dodge them. Identify them, discuss them openly and honestly, and learn to remove them. Only then can you achieve your vision.
- Processes: Processes are the way business is conducted in your company. If you are an independent company, you have developed processes that are exclusive to your organization. If you are a franchisee you use your franchise’s fully developed operating system. Either way, process is critical to systematically communicating “this is how we do it” to your employees. Processes remove the “I don’t know how” obstacle from your business culture.
- Traction: Successful business leaders have it. They execute well, and they know how to bring focus, accountability, and discipline to their organizations. They establish priorities and ensure that a high level of trust, communication, and accountability exists on each team. Traction leads to employee engagement, a cornerstone of healthy culture and a key to attaining your vision.
With All This in Mind, Where to From Here?
Culture, Strategy and Traction go hand in hand. When all are aligned, your people, programs and processes work together to support the business strategy. People clearly understand how they contribute to the business and they are more interested in their work.
Culture is always a “work in process” and demands management’s attention and an ever-watchful eye. In the world of culture, status quo is not always the best course of action.
How Do You Recognize a Healthy Culture?
Let’s start with identifying some of the signs of an unhealthy culture. As businesspeople, we are also consumers and are exposed to different cultures every day. Just walking into a company or store and being greeted by a somewhat surly clerk or receptionist is the first sign of an unhealthy culture. Couple that with dirty coffee cups, overflowing trash baskets and cluttered work areas, and you have pretty good indicators you are not going to have a good experience. You will be unlikely to return to that business in the future. That is not a scenario you want repeated in your company.
While culture is not exclusively visual, visual aspects do have an impact. Elements of business culture should include things like dress code, communication style and physical environment:
- Dress code projects an image about the company to both current and potential customers. Without it, employees will wear whatever they think appropriate and that may not be acceptable. Customers may be hesitant to give their hard-earned money to a business that doesn’t care about its image.
- Communication style also communicates company image and culture. If communication between employees in the organization is too relaxed and unprofessional, the same will occur when meeting with customers or prospective customers. Communication style is especially important in a business-to-business conversation too, since it sets the tone for long-term, mutually beneficial relationships.
- Physical environment is the most self-explanatory of the three cultural visuals. An office, showroom, warehouse or individual work area is the outward expression of a business’s core values and reflects its unique culture. Studies have shown that a cluttered work area comes with a high productivity price. Pay attention to the esthetics and be sure that work areas and customer receiving areas present a comfortable environment for conducting business.
Who Does It Well?
Entrepreneurs know that culture is important and that a negative culture can hurt company performance. Unfortunately, they sometimes fail to connect the company’s culture with its strategy. “How Starbucks’s Culture Brings Its Strategy to Life,” an article that Paul Leinwand and Varya Davidson published in Harvard Business Review on December 30, 2016, explains just how culture works in one of the world’s leading companies, Starbucks. Whether you are a Tall, Grande or Venti customer, you experience the same process worldwide in any Starbucks store. Their strategy is to be your number three go-to place after home and work – a place to enjoy your coffee in a consistently comfortable and welcoming ambience. Great culture, huh? Wrong, that’s not culture, that’s their model! The model, which is a repeatable process, is a critical part of the formula, but culture runs much deeper.
At Starbucks, their culture and values are clearly communicated on their website. Their Careers page opens with “Expect More than Coffee” and then moves directly to their company Vision, Mission and Values. Their goal is to be a neighborhood gathering place and a part of everyone’s daily routine, a place where everyone is welcome. That can only happen if all employees are fully engaged and their experience with the company environment is conducive to a healthy culture. From the beginning, Starbucks adopted an employees-first approach that encourages staffers to form close bonds with each other. These bonds serve as the catalyst for the company culture. Furthermore, employees are highly valued for their contribution to the company’s overall success.
When you have an internal atmosphere of trust and respect, a shared vision, a customer-first mission and a sustainable process, you have an unshakable recipe for employee engagement. The outcome? A healthy company culture.
Starbucks, like any other company, has had its share of problems. In years past, leadership has “tinkered” with the brand by catering to the “grab and go” express customer at the expense of its neighborhood appeal.
They added an extensive list of new products, introduced a more complicated menu of drinks, and opened a multitude of new stores. At the time growth was the objective but the result was they found themselves as a mass brand attempting to command a premium price for a customer experience that was no longer special. The result, a closure of up to 600 stores. In 2018, a highly publicized diversity event in one of their stores led to a simultaneous half-day closing of 8,000 stores across the U.S. for diversity training. Leadership’s purpose for this was both internal and external. Not only did they want to raise diversity awareness with the customer, but also internally with their employees.
Why all this about Starbucks? The one thing that did not change as a result of these issues was their process. They continued to do what they do day in day out. Because of this, they came out on the other side with their culture still intact. Was culture strained and stretched? Of course it was. But their relationships with their partners (employees) and their customers were still there, and their culture survived.
Are There Others?
You bet! Starbucks is just one example of a company with a culture that survived change. I am sure you will recognize a few other companies you have probably come in contact with such as Southwest Airlines, Walt Disney, Apple, Google, Twitter, and Intuit. These are just a few strong cultures that were identified in a joint survey conducted by Glassdoor and Business Insider. This short who’s who list of highly successful companies begs the question – Why did their cultures survive?
The answer is simple… they all had a clear vision and mission, a repeatable process, people who executed it well, and a genuine level of care about their customers. Think about your last flight on Southwest, your last visit to a Disney Park or to an Apple Store. The process was always the same, the people understood the company goals and they had fun serving you, the customer.
Starbucks is not the only company that has discovered the “secret door” to a successful culture. All these companies, along with countless others, share many things in common. Their products are different, their models are different, and their business categories are different, but one thing is always the same…people.
Most of these companies put employees first and, in some cases, even before the customer. They all create an atmosphere of employee value, have a clear vision of where they are going, along with a purpose and mission. They combine those things with a fun workplace that encourages both personal and professional growth that create an excellent employee engagement and experience. The combination of all these factors generates an outcome that we call culture!
One other important point. In case you have not noticed, the workforce in America experienced a sharp change in 2016. According to the U.S. Department of Labor, the generation born between 1981 and 1996 has become the largest generation in the workforce. There are approximately 73 million employed individuals in this age group today and they presently account for 35% of the workforce. That number is expected to rise to 75% by 2030, a little more than 10 short years from now. What does any of this have to do with employee engagement, experience and culture? A lot. These new workers bring with them a whole new set of values, expectations, work ethics and a host of other thought processes. Not only will they reshape your workforce, they will be dealing with likeminded clients and business-to-business customers. Either way, they are unquestionably a societal force now, and will remain so in the years to come.
The Question Remains, “Culture, What’s Culture?”
Culture in any business is a critical consideration and is no longer a subject that can be taken lightly. The market simply will not allow it. The primary driver in every business is always people and they ultimately determine what your culture will be.
Your job is to provide the vision, leadership, tools, purpose, process and all the other more subtle elements that create employee engagement and a positive customer experience. Culture is a by-product, an outcome, of how employees envision the company, where they are positioned within it, and whether what they are doing is worthwhile. That’s your job as an entrepreneur to provide. Employees’ belief that you are being true to your mission is an important component to producing the outcome you want. Their performance is determined by how much they are engaged in an ever-changing world where the space between “this is who we are” and “this is what we do” has never been thinner.
Culture is a living, breathing and always evolving part of your company, and it all starts at the top.
About Bob Dearing
For over 23 years Bob served as a senior member of one of the country’s largest home furnishings franchisors. As a Certified Franchise Executive (CFE) he was an integral part of the management team and an important contributor to system-wide expansion of the corporate enterprise. More than 35 years of management experience combined with “hands on” operational involvement uniquely qualifies Bob as a skilled resource for helping entrepreneurs meet their full potential. His analytical and organized approach to business provides “common sense” solutions to everyday business opportunities. His ability to provide informed management assessments, along with practical P&L financial analysis, is an invaluable asset to any organization.