In March of 2016, I celebrated my one-year anniversary as President of Runzheimer. A lot of really great things happened in that year—including being named one of the Milwaukee Journal Sentinel’s Top Workplaces. As I reflected on the past year, the major component of Runzheimer’s success comes down to one thing—culture.
Some business experts say that leaders must first create a healthy company culture to ensure the organization will operate smoothly, while others think designing effective business practices in turn creates a strong culture. It’s a lot like the question “which came first, the chicken or the egg?”
In the April 2016 issue of Harvard Business Review, Jay Lorsch and Emily McTague argued that “Culture is not the culprit”. According to their research, putting solid business practices in place eventually leads to a positive culture, instead of the other way around.
As with most issues, there is probably some truth on both sides. You can count on your employees to be innovative and productive if you have a solid culture. On the other hand, a business that is running effectively usually sees improvements in overall culture over time.
Figuring out which comes first isn’t important. There is no reason why promoting a strong culture can’t take place at the same time work practices are being streamlined for effectiveness.
Spotting Dysfunctional Company Culture
It isn’t hard to spot a dysfunctional company culture. High rates of turnover, low rates of employee engagement and difficulty attracting top talent are the first signs. These are quickly followed by angry customers, negative press and a drop in profits. Smart businesses are on the lookout for early warning signs and are poised to spring into action at the first sign of trouble.
Proactive vs. Reactive
Smart companies don’t wait for employees to jump ship before they react. Instead, they focus on building a thriving company culture with every time they make a decision, ensuring that they have consistent buy-in from employees. This leads to steady progress toward shared goals, and, ultimately, company-wide celebration in shared successes.
Building the Foundation
Whether you are starting from scratch or rebuilding after a big change, the first step is to create a solid foundation that includes all members of the organization. Decide what the company stands for and which values guide decision-making, and spell them out in clear, unambiguous terms.
Don’t speak vaguely of “transparency.” Instead, discuss what transparency looks like. Make a clear statement, such as, “Leaders will share information to ensure we can work together toward our company goals.” When communicating company values, give examples so everyone understands your message.
Walk the Talk
Company culture begins at the top, and executives must make business and management decisions according to company values. It can be helpful to start conversations and presentations with a nod to company values (for example, “In the interest of transparency, I would like to share some information on our quarterly profits.”).
However, focusing exclusively on a top-down approach is unlikely to get the results you want. Encourage the use of company values in everyday conversation at all levels of the organization. Conversations about individual goals should be tied back to the values, and when lower-level business decisions are made, leaders can talk about the values throughout their discussion. “We have to reorganize the department. What is the best way to make sure the process is transparent?”
Shared Values = Shared Successes
Tie successes back to the values that all staff members share, and make a point of sharing ownership of successes with all members of the organization. After all, it takes everyone’s contributions to achieve business goals. Be sure that each individual understands how his or her efforts support the common goals.
For example, give credit to the customer service representatives who solved client issues, leading to improved sales. Compliment the IT staff who kept everyone up and running. Staff members will take a personal interest in company goals and feel personal pride in the company’s successes when there is a solid company culture.
Ultimately, a strong company culture includes a diverse group of individuals who enjoy their teams, trust that management is fair and feel pride in the work that they do every day. Shared values are the foundation of a culture like this, and shared success keeps it healthy year after year.
This doesn’t happen overnight, and it isn’t a one-and-done proposition. Company cultures are created over time from thousands of decisions, large and small, that are always made with shared values in mind.