Why Company Culture is Critical for Growth

The other day I was asked, "can you change my company culture?" "Yes, I can help with that," I replied, thinking to myself, this is quite a loaded question! Nevertheless, as I will explain further below, there are some proven and concrete ways to address cultural issues in an organization.

Typically, “company culture” comes up when there are difficulties and misalignments in a business. Among other signs of trouble, these may include any or all of the following symptoms:

• Employees are not getting along.
• Employees are not working well together as a team and are pulling in different directions.
• Company is not achieving its goals.

If these problems occur on an ongoing basis, then they are becoming cultural—an integral part of how the company performs and does business.

Worst of all—if you are an ambitious and growth-oriented business leader—these types of misalignment will not allow you to scale your company to its fullest potential. 

What, exactly, is "company culture"?

So many things contribute to a company’s culture that it’s impossible to discuss all of them here. As a working definition, company culture is a framework for everything that happens inside a company, and between the company and outside parties, especially customers. Ideally, it’s a closed system that aligns people, processes, behaviors, and decision-making around a set of beliefs and principles that is shared by all stakeholders.

When there’s lack of alignment, problems begin.

So here’s the "bad news" and "good news": culture happens, whether as a business leader you take control of it or not. If you make no attempts to create a more desirable company culture, you are accepting the default of whatever culture is unfolding. On the flip side, there are powerful ways a "broken" culture can be realigned:

1. Define your company's Core Values

Core values are the essential beliefs and principles that underly everything you do. If you have not done this already, meet with your team to define what these essential beliefs are or should be.

Don’t make the list a mile long. 5 to 7 core values will suffice.

2. Communication

Communicate these core values to everyone in your company, asking your team to express them in their daily work and interactions.

It’s no coincidence that fast growing companies have in place a system of regular meetings—daily huddles, weekly, monthly, quarterly, and annual meetings. The more meaningful communication there is between all members of your team, the more aligned--and productive--your team will be.

3. Hire, Fire, and Reward for Core Values

Once you have established a shared set of core values, make sure you build a team of people who are of the same mind. Practically speaking, this means: getting the right people on the bus by making the core values part of the interview questions when hiring new employees. Building the right team also includes rewarding and promoting people for behaviors that express the core values. Finally, building and maintaining a dream team also entails disciplining and if you have to, firing people who demonstrate that they are not onboard with the core values.

You may struggle a bit with this last point, but figuring out who belongs on your team and who doesn’t may not be as complicated as it seems. My team and I are currently in the process of implementing EOS—Gino Wickman’s Entrepreneurial Operating System—across two of my companies. EOS includes a simple and easy to use tool, "The People Analyzer." It walks you through a basic thought process of how to evaluate people for cultural fit, based on your company’s core values. I highly recommend you take a look at this. You can download The People Analyzer at www.eosworldwide.com

4. Document your SOP’s—"Standard Operating Procedures"

Have your team document how the company operates and how it does what it does. This includes recording in writing/videos/screencasts all the company policies, processes, systems, and procedures that anyone working at the company needs to understand and apply. And then make sure that everyone abides by these Standard Operating Procedures. Periodically review your SOP's with the team and revise them as needed. Behaviors, routines, and technologies, to name a few elements, change over time, and your SOP's should reflect these changes.

Documenting your SOP's is of huge benefit not only to aligning everyone in your organization but also for onboarding and training future employees.

5. Your Personal Leadership

Last but not least, be aware of the impact your leadership has on your company culture. I think business leaders tend to underestimate the importance of their personal actions when it comes to company culture. This is especially true for leaders who have great visibility within the organization and frequently interact with their team members.

You may have taken all the right steps to create a strong culture—you’ve identified core values hired/rewarded/fired for cultural fit, documented your SOPs, etc. But if your own behavior as a leader is not aligned with these, your team will not be aligned either. They will follow your example instead.

For a growth-oriented leader, the bottom line is: a strong company culture is a prerequisite for scaling an operation. Without it, the company cannot realize its full potential.

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