Strategic Leadership-No. 3: Culture and Values
Corporate Culture is probably not on the top of many lists for serious discussion at a time when businesses just want to have enough money in the bank to meet payroll or meet bank agreements so their loan is not called. However, the culture discussion is important because it is one of the leadership responsibilities that, when properly managed, helps us “soften” the impact of tough times. This topic is a mighty important one that deserves a little time.
Describe your company culture. Can you do it in 5-8 adjectives? Good! Now, ask your leadership team to do the same. Ask your customers. Do you all use the same adjectives? If you said “yes”, stop reading and pop the champagne! You are in a small group. If not, read on.
First, what is culture? It is the organization’s values, beliefs and behaviors and usually represents the unwritten rules through which everyone’s actions are interpreted, individually and in groups. Cultures can be positive or negative.
The chart below explains where culture fits in the hierarchy of corporate influence and decision-making. First, and most important, is the external market environment―which we can’t control, but must understand. Within the “blue box” of your organization is what we can control. The outer framework is culture and leadership, as it influences everything that follows.
It matters for two main reasons. First, a company has to operate in a manner consistent with its culture or values or it won’t be successful. You can’t ask an organization specializing in the blame game to succeed in being accountable. If there is no trust, how can an organization really be motivated by the next big project—they are sure it will never be funded anyway. Or in some family-owned businesses, it is assumed that it doesn’t matter how hard you work; if you aren’t family, you will never get past a manager title. Where is the motivation in that?
The second reason is a bit more conceptual, but I have a strong belief that culture will replace process as the variable which will most determine success. Today we value process, which is a repeatable and predictable way to introduce product and define customer service and other key operations. They are all documented in a book, taught in the company university and ingrained in performance reviews. In the future, given our evolving educational systems and generational differences, culture will define how people act more than rules. What is right will matter more than what is practiced.
“Right” by what standards? Clearly, different people have different vales and respond to different cultures. Some want stable and steady. Some want rock and fire! Those people will work differently, may both be successful, but not in the same culture. (If you said you wanted a culture where there is a sense of urgency, high performance excellence and innovation, you would have a very different company than one that is collaborative, concerned for people, empowered and values customer service.) I’m not saying one is better—they are different. Each can be successful in its own way, but it needs to define itself in the context of “what they stand for”.
A while back, Bruce Temkin wrote a blog about Amazon’s acquisition of Zappos, wondering if it will kill Zappos’ culture. Their 10 core values are:
- Deliver wow through service
- Embrace and drive change
- Create fun and a little weirdness
- Be adventurous, creative and open minded
- Pursue growth and learningBuild open and honest relationships with communication
- Build a positive team and family spirit
- Do more with less
- Be passionate and determined
- Be humble
Zappos invests in culture as a corporate asset. Amazon paid $1 billion for $40 million in annual earnings. If they require faster growth, more profit, and rapid expansion across categories, how will this impact the Zappos culture?
So, first define your culture, walk the talk, and be its guardian—be careful of small changes or big changes that jeopardize it, unless that is your intention.
Let Reynolds Consulting, LLC help you define your culture as an important stepping stone to next year’s plan. Call us at 816/350-7680 or 615/783-1626 or email mreynolds@reynolds-consulting.com. Also check out our website, blog or twitter page.