There are many factors credited for success or blamed for failure in all types of organisation from tiny businesses to countries. In the end, it mostly comes down to culture. If you want to understand why Apple and Google succeed or why Royal Bank of Scotland over reached themselves or Costa Concordia hits rocks in a calm sea, in well charted waters, look first to the culture.
When a business starts it probably only has a handful of people. At this stage the culture is organic, the people who join are likely to be well aligned and their contact with each other frequent and deep enough that no one needs to think much about culture.
Once a company, or business unit grows beyond a certain point, (about 40 people, depending on the personalities and location of people) culture becomes a critical factor. If we are running a business when it gets to this size, it is likely that we have plenty on our mind other than culture. In my experience the suggestion that we need to focus on culture is usually met with some level of scepticism.
However I would go as far as to say that the most significant difference between businesses that stop growing at or below 40 people and those that go on to succeed is probably culture.
So, what kind of culture is most likely to lead to sustained success and growth (if that is the ambition)?
Clear and behaved values: Values are not some corporate bullshit devised by consultants to put on the annual report. Values are how we commit to being with each other and levels of behaviour that we hold ourselves and each other too. Not living up to the values has disciplinary consequences or results in not being part of the team any longer.
One of the best and most relevant values I have come across was a BP value at one of their US refineries. It was part of a cultural change programme and it was simply “Do the right thing, even when no one is watching.” The most important thing about values is that they are not an aspiration, they are how we choose to behave together.
Alignment of purpose and vision: The purpose of our organisation is the “why” we bother to come to work at all. Once we are above the basic needs level, motivation to do our best work comes from doing something meaningful, something that we believe in. The vision is the picture we create of what it will look like when we are doing it, or when it is complete. Both purpose and vision should be aspirational and also offer benefits beyond the senior executives and shareholders, in order to galvanize staff.
Microsoft grew and succeeded with a vision of “a computer on every desk top and in every home” and a purpose of “enabling people to reach their full potential”. To a large extent Microsoft had achieved this by 2000 when Bill Gates stepped down. Without an inspiring purpose and vision Microsoft has drifted since, very profitable, but lacking a motivating sense of purpose. The most important thing about vision and purpose is that they are not limited by what we currently believe to be possible and that they spread benefit to customers, staff and the wider community.
Responsibility: Control is an illusion, at best we have influence. If we want people to be motivated and if we want them to think about their work, then we need them to feel a sense of responsibility. That means giving them a sense of the overall picture and asking them to figure out what they are going to do about it, without trying to micro manage them or do the job for them.
Over and over again I meet managers who are so busy they have no space to think ahead. Typically I ask them how many people they are responsible for and what proportion of their time is spent being operational and what is spent on managing and leading. The answer is often 80% is spent operationally!!! Why employ people if you are not going to give them responsibility? Why be a manager/leader and keep doing the operational stuff most of the time? The best managers/leaders are the best because they minimise their operational role and concentrate on managing and leading.
High standards: Having high standards means being willing to say no. Willing to say no to substandard work and to substandard people. Think of a sports team, imagine a great football, cricket or cycling team – with one person in the team who doesn’t fulfill their role adequately, but who is kept on the team anyway. Imagine the disproportionate effect that will have on the rest of the team. Great people are motivated by being surrounded by other great people doing great work.
There is a Steve Jobs story, told by Mike Parker CEO of Nike. Jobs called to congratulate Parker on getting the job. Given the opportunity Parker asked Jobs if he had any advice. Jobs replied “Nike make a lot of great products, but also a lot of crappy stuff. Just get rid of the crappy stuff.” We put enormous energy and effort into all of the work we do, but it is rare for all of it to be brilliant. Jobs’ advice is work out what is great and what is not so great and have the courage and discipline to say no to the not so great.
Well rewarded: If you are going to have top quality people and expect them to take responsibility and be generally brilliant, then you need to be willing to reward them well too. Not just when things are going well, but all of the time. The best people are more than twice as effective as average people and in creative work even more so. The financial rewards need to be enough that money is taken off the table as an issue, and your great people feel good among their peers. However the emotional rewards are where real motivation happens and as Dan Pink explains they need to deliver Autonomy, Mastery and Purpose.
John Lewis not only employ people as partners, giving that sense of responsibility and ownership, they also offer amazing perks offering all employees and their families the opportunity to use a number of company owned properties, including genuinely exclusive partners hotels. If you are going to employ people it is worth getting the best out of them and the way to do that is to reward them and treat them well enough to get the best and then motivate them with responsibility and opportunity to give the most they can.
I have talked about this as if culture is an independent entity that can be created with a few criteria. It cannot. The most important contribution to the culture of an organisation is the leadership. If the boss goes to the pub every evening and drinks a few pints, so will the team. If the boss is in the gym at 6 in the morning, guess where the team will be.
As Albert Schweitzer said example is not the most important part of leadership – it is the only part. Before you can instill the values and behaviour that will create the culture you need to be them. And since the brand is only the outer expression of the culture being the culture you want to create in your business, will also define the brand.
Will the management of Costa Cruises learn from the disaster and create a culture where ships are safe and crews are ready, or will they blame the captain?
Please also visit the blog to comment
You can subscribe for free at www.neilcrofts.com