Peter Drucker was famous for this alleged quote: "Culture eats strategy for breakfast."
In working with many entrepreneurs, I have found this to be very true, as the culture is the secret sauce that keeps employees motivated and clients happy.
In fact, I recently read a great quote that said, "People do not just quit companies or leaders … they quit organizational cultures."
I’d like to share with you two stories of clients for whom culture was the dominant factor in whether they were successful in taking the business to the next level or are still treading water.
Nathan founded a family-owned security services business over 30 years ago, and today, he has his brothers and some of their wives in the business. His success is in the very prestigious clientele that trust him for his services.
From the get-go, I was impressed by his entire company having this unbelievable can-do attitude. Every curveball thrown at them was an opportunity for growth. The leadership displayed a unique blend of humility and confidence. Integrity was a real goal in everything they did.
The best story I remember was when the head of security at one of their largest customers was moving to another large company that they weren’t doing business with. Quite frankly, they were somewhat happy that he was moving, as he was a real stickler for details, and keeping him happy was a huge effort.
A few days after he moved to the new company, he called Nathan and said, "I know I was tough on you guys, but you’re the best out there. Can you help me at my new company?
Their culture statement was very impressive, and what I found was that they really meant every word. Here are some highlights:
• Their core values were first and foremost based on the principles they lived by.
• They believed in making a difference for their clients and their employees.
• They really cared about each other, about their customers and about empowering everyone to do their best.
• They believed in working together and strived for feedback, collaboration and diversity.
• They reached for the stars and weren't afraid to fail, as if you fail, at least you will land on the moon.
"At Security Systems, we innovate, we test -- and we learn along the way."
What is unique is that they took their culture very seriously, including everyone from the leadership down. It wasn’t empty talk or something nice on the wall. They knew that the company’s culture was the secret sauce behind their success, and they religiously followed it.
Contrast this with another client, Charles (not his real name), who from the onset insisted that processes are the answer to the challenge of their people not taking ownership and what I call "confusing efforts for results."
His company had millions of dollars outstanding that nobody bothered to chase down. There was constant infighting, and few took responsibility. While they tried to change things, they made the typical mistake of throwing bodies and systems at the problem.
Truth be told, the ownership also tried hard to change the culture, but culture starts at the top, and as long as the leaders were finding excuses for nonperformance, everyone else did the same. Charles had a very hard time holding people accountable, and his people knew it.
He and his staff all came up through the ranks and had never run such a high-growth company. They were mostly homegrown executives with golden handcuffs.
While they brought some outsiders into leadership roles, the culture that was prevalent was one of the old regime -- not the new executives -- and the jury is still out as to whether it will work or will frustrate them to the point where they leave.
So, what are some of the lessons learned that entrepreneurs, especially, need to be very careful about?
1. Culture is created by the behaviors you tolerate. If you will tolerate bad behavior, people will learn they can get away with it. That doesn’t mean you have to be mean about it, but create a culture of "open and honest" feedback, and make sure it goes both ways.
2. Change starts at the top. Often, the leader will not be open to change, and it can be in their body language or becoming defensive when someone disagrees with them, etc. You can’t expect your people to change if you’re not willing to change first.
3. The leader needs to recognizes that they are ‘a voice’ around the table, not ‘the voice.’ This is a huge challenge, as leaders often see themselves as the only person capable and authorized to make decisions. While it’s true that they need to make the decisions, they also need to listen honestly and without showing impatience for other people’s opinions.
Some call it the obligation to dissent, but whatever you call it, make sure people feel validated for their opinions, and when you make a decision, take those opinions into account.
Culture is one of those intangibles that is very hard to define but needs to be designed and implemented -- and never by default.