I wrote last week about the relationship between Strategy, Culture and Leadership. As a result we’ve had some questions about how a business owner can influence the culture in his/her company. Here, in no particular priority, are 6 ways that it can be done.
The 6 Ways a Business Owner Can Shape Culture.
Communicate and publish the company’s values, vision and mission as widely as possible. This first assumes that they were identified during the strategic planning process. Repeat and discuss them at every opportunity; put them on mugs, t-shirts, mouse pads and baseball caps; reward everyone who can not only remember them – but who also know what they mean.
Be a role model for the values. Employees watch the owner and other leaders’ behaviour all the time. Inconsistencies between the written values and day-to-day action send loud messages about the real culture. For example, having “investing in employees” as a value and then not providing funding for training is inconsistent. So is saying that “being innovative” is a value while punishing employees who attempt to innovate but fail.
Tell stories and help create legends about people. Stories are a great way to reinforce the desired behaviour and culture. If, for example, an employee goes out of their way to help a customer, the owner and management team must repeat the story – and encourage others to do so – at every opportunity. That’s how legends are born. Richard Branson shows how here.
Ensure the organization chart supports the culture. A company’s organization chart is a major way in which they embed and send signals about the culture. It’s easy to be inconsistent. For example if the stated aim is to foster collaboration and teamwork, a flatter organizational structure will be much more effective than a very hierarchical one.
Design the work space appropriately. Much like the org. chart, the physical layout of an office, plant or warehouse can affect company culture. For example, an open environment with no walls creates a very different atmosphere than one in which everyone has their own office with floor to ceiling walls. Neither approach is wrong, but both can be really inappropriate and unsupportive of values and culture.
And number 6 is – The use of rewards and status symbols. Salespeople are usually compensated using reward based systems e.g. commissions, bonuses for being over quota for a quarter or year; trips to exotic destination. But the people on whom the company relies to make and deliver the products or services the sales force sell frequently aren’t rewarded in this way. This difference in approach to pay can damage the culture by creating divisiveness or, if left unaddressed, even bitterness. On the other hand, used effectively rewards and status symbols can build an achievement oriented culture.
If a business owner isn’t pro-actively shaping the culture in the company, one will develop spontaneously. And while the culture can support the development and execution of great strategies, which get great results, if it is inconsistent with the strategy, it will dramatically reduce the odds of the strategy being successful.
Taking the initiative and developing a culture which will help increase operating profits and build shareholder value is simply another aspect – or even by-product – of good leadership.