A recent Forbes study showed that businesses with a ‘performance enhancing culture’ realised 682% revenue growth and 756% net income growth over 11 years. According to Gallup, highly engaged teams achieve 21% greater profitability. The fact is, business culture really does matter. It is the core driver of sustained business success.
Every business has its own unique culture – a set of rituals, routines and processes that guide how things are done. Some business cultures are magnetic – you feel drawn to them and are fully engaged to play your part in achieving meaningful goals. And it is not just the employees that feel that positive energy; it tends to ripple out towards customers, clients and other key stakeholders. At the other end of the spectrum, corporate cultures can be debilitating. ‘Back-stabbing’, ‘ego-driven’, ‘micro-managed’, and ‘uninspiring’ are just some of the words I have heard used to describe cultures that can bring out the worst in people.
The right culture can help businesses achieve amazing things. The wrong culture can prevent a business from realising its true potential, or worse – seriously underperform. Some negative cultural tendencies you may have been exposed to include:
- Low trust
- Change resistance
- Lack of accountability
- Short-term thinking
- Reactive behaviour
A few years ago, an area manager asked for my assistance in understanding why the second-largest retail store in the Asia Pacific region was performing so poorly. Upon visiting the store, I quickly determined the reason: the store just felt like it could suck the life out of you. The culture was a huge problem and it needed to change very quickly if the store was to remain viable.
So, how do you go about creating a winning culture?
Be clear on your vision, mission and strategy
The best business cultures support the achievement of your strategic intent. What are we here to do? What do we aspire to be? Where will we play? How will we win? How will we configure the business to achieve these outcomes? Find the answers to these questions first.
Perform a culture audit
A GPS navigation system only works if it can pinpoint exactly where you currently are. Similarly, to improve a culture, you need to have a really good understanding of what’s working and what’s not. Which parts of the existing culture support the achievement of your strategy? Which cultural attributes may hinder sustained performance? Ensure you gain a good cross-sectional view of the issues that need to be addressed – leaders may not be aware of some of the undercurrents affecting performance. For larger organisations, there may be several subcultures in functional and business unit teams to be understood.
Create a compelling business culture picture
With the purpose of supporting your vision and strategy, imagine the ideal culture your company would have. What does it look like?
Prioritise the cultural attributes to nurture or quash. Are the business values the right ones for connecting your people with your strategy? If not, you might need to run an inclusive process to alter or develop them. Defining a list of behaviours that support the agreed values is worthwhile – make them observable, accountable, and agreed upon.
Model the change
Great leadership is essential to creating positive cultural change. It is well documented that 70% of change efforts fail. If leaders aren’t demonstrating the right behaviours, there’s little chance of those behaviours cascading down through the business.
Remember what Dr Stephen Covey, an American educator, author, businessman, and keynote speaker, once said: "You can’t talk your way out of problems you have behaved yourself into."
Be realistic about timeframe
Cultural change takes time. Granted, some at-risk businesses don’t have long to turn the ship around. However, change is generally a gradual game. Creating a strong business case for change, communicating it effectively and then driving change through a guiding coalition of influencers and leaders will give you greater chance to positively affect the culture.
A great business culture is something worth striving for, yet it can be difficult to obtain. ‘Cultural drift’ happens when leaders get overly busy or distracted and let the culture move on its own accord. This can be dangerous. The best leaders I’ve worked with understand what they need to do, put the rudder down and work on steering the culture in the right direction. What might you do this month to improve the culture within your team?