Is Your Culture Killing Your Company?

I have a client that takes deep pride on its “company culture” for the reason that it has been in business for many years.

The company is a comfortable place to work, and the people that work there, are, for the most part very nice. It also appears that to get anything of significance accomplished is difficult.

Put another way, almost everyone seems to be generally satisfied with the status quo.

There are several middle managers who are frustrated and want to see things change. With their dual visibility into both the market and the company they have a list of issues that need to be addressed to keep the company profitable and moving forward.

The company is essentially stuck; revenue is not growing like it should and keeping expenses under control is a never ending issue.

The “flavor of the month” of the month approach to long term change never works except for ice cream shops.

Changing a company culture starts with defining what culture actually is. In a Forbes magazine article Mary Barra, the CEO of GM, stated, “Culture is how people behave.”

As head of Human Resources at GM, Barra reduced a 10-page dress code into two words: “Dress appropriately.”

This freaked out many in GM management who thrive on conflict, paperwork, policies, bureaucratic red tape and the illusion that people can’t define what it means to dress appropriately for work.

In a smaller business, where people individually play a much more substantial role in both the survival and growth of a company, would any owner want someone on the payroll who did not have the basic judgment about appropriate dress for work?

If someone does not know how to dress appropriately for business, do you really want that person on your payroll? Can you risk that a representative would dress inappropriately for clients, prospects, partners and fellow team members?

Barra has stated that she expects changes in how her direct reports behave.

Instead of ignoring issues and hoping they will go away, her direct reports have been told that they are expected to demonstrate: directness, transparency and candor and to hold themselves and each other accountable.

It is sad to say, but many companies, including those I have as clients, tend to have “me” type people reporting to the top executive, not “we” type people who have a leadership style that is focused on a team achieving company results.

GM has suffered for decades as an under-performing company. It wasn’t just the business model, which was broken; it was also the “don’t rock the boat” approach to both strategic and tactical issues.

Small businesses tend to begin as a result of client need but as the business expands and grows, and layers of management are added, hearing or seeing the client never happens.

Like an aging body that never exercises, a company can quickly lose its sense of vision (where it is going), ignore the senses of sight, touch and hearing (because the client is not considered important enough to care about) and accept the smell of overwhelming overhead as people ride their desks and keyboards day after day, never venturing to the real world.

The answer is not always to lose weight (shedding people, overhead expenses, cutting the cost of goods sold) however, appealing that might be.

The correct answer is to change the culture; to teach, hold accountable and reward people for changing their behaviors to do the most important things for the company.

Those needed behavioral changes? They start at the top.