I was asked recently by a journalist for some comments about the pitfalls a young business may encounter in the early days. What could cause them trouble or even complete failure later?
Several things came quickly to mind. Cashflow, lack of confidence in decision making and trouble recruiting the right people for example. But I thought these would all be quickly covered by others.
I decided to offer less obvious subjects that might get overlooked. Here’s a few words about one of these topics and three basic rules to help you.
Culture will happen
Surely corporate culture is something only big enterprises need to worry about? In my experience, it’s quite a subtle thing that’s easy to overlook in the early days, but that can be a real pain later if you ignore it no matter what size your business is.
In the early days, when you are working every waking hour worrying about orders and paying wages and collecting cash and getting your product or service delivery right, it’s understandable that you might not take time to sit down and think “now – what about my company’s culture …..”.
It is a fact that some kind of business culture will evolve in every business. If you don’t try to influence your culture from the start, and steer it in a way that matches your vision of doing business, it’s extremely unlikely that it will turn out that way by accident.
You might also think that culture is some “hippy” thing that you can do without. Don’t think like that. It is very real and can cause you seriously costly practical problems.
Why does it matter?
Business culture is created within the whole eco-system that is your business. It boils down to a couple of factors – the way people do things individually and the way the company does them as a whole. The first happens almost naturally when people are given different roles or jobs and then figure out, usually by trial and error, what the best way is to do them from their point of view. How that gets integrated across the company is the interesting bit.
If the Sales, Operational and Administrational areas of the business are not working in harmony, you’ll get the practical issues that you’d expect. Try selling a Rolls Royce for the price of a Ford Fiesta because your engineers are perfectionists and your sales team are driven by overall sales numbers and your admin people are sick of trying to balance the costs and revenue but don’t know why.
What you’ll also experience are employees who at best are stressed and unhappy, but at worst who resent each other and actively work against each other’s interests …. and yours!
A recent study said that happy workers are 12% more productive than average. That’s nice – why wouldn’t you want that? On the other side, unhappy workers are 10% less productive than average. That’s not just something you don’t want, it’s potentially disastrous in a competitive market. Another study in the USA showed that companies with a “low” culture had a 46% staff turnover in contrast with those that worked at defining how they would do things collectively, where turnover figures were as low as 14%.
What can you do?
You influence culture on a daily basis – so do it consciously.
Rule number 1: Plan your culture – don’t let it happen by accident
- What do you want the working environment to be like?
- How do you want to be seen from the outside?
- Look what others are doing and how their businesses are perceived by staff and by customers
- Decide what you like and don’t like and don’t be afraid to copy good ideas – but put your own slant on them
- Look at your leaders’ personalities and characters (that might be just you) – these will (and should) come through in your culture
Rule number 2: Remember you are dealing with people – they are all different
- Talk to your people regularly
- Listen to your people more than you talk to them
- Find out what they think
- Encourage them to discuss things with you
- Act on their suggestions
Rule number 3: Train your people – both formally and informally
- Make sure everyone starts with the same basic understanding of the business and “how things are done round here”
- Train them in how you want their work carried out and make sure they have understood
- Show them what other people do in the business and how it all fits together
- Help them understand where the business is going and what their role is in getting you all there together