When Company Culture Counts

I was talking with a CEO group the other day about strategies for maintaining business momentum when the inevitable revenue plateau is looming.

As we talked, many were surprised to realize organizational culture was an essential differentiator between organizations that weather the storm well and those that sink in the face of adversity.

Why Does Culture Count?

When business is “off” many CEOs start to think about where to cut. Their attitude shifts from “lets thrive” to ” how can we survive” and fear begins to influence decision-making.

Leander entrench themselves, hiding in boardrooms and offsite meetings, sorting out the mess. Employees are often shut out, left to wonder what’s going on.

This environment undermines success as key employees look for new opportunities. Morale among those who remain declines, and productivity goes with it.

The hushed hallway conversations and secrecy among management erode trust between individuals, teams and departments. Just when you most need people to pull together, they’re falling apart.

It’s a vicious cycle that can turn a minor dip in business into major setback. Thankfully, as strong culture can help leaders avoid the trap.

Open, Not Closed

A business that establishes a foundation of openness and trust is a step ahead when trouble looms. Instead of shutting employees out of the process, leaders in these companies turn to them for support.

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If employees are accustomed to open-book management, seeing the financials on a regular basis, they are much more attuned to subtle signals that precede a marked decline in business. They’ll often step up and offer innovative ideas for keeping ahead of the curve, helping executives avoid the slowdown in the first place.

This doesn’t mean you need to publish sensitive data like salaries. Even aggregate information on trends in major revenue and expense buckets are eye opening for employees.

A one-time report won’t do it, but quarterly or even consistent annual updates help your staff understand their role in the company’s financial success. For example, employees who see costs for insurance and benefits rising year over year are much more understanding of changes in these areas that are necessary to sustain profitability.

Pull Together

Beyond financial insight, sharing in the goals and strategy of the organization help everyone understand why they come to work every day. This sounds like a no-brainer, but many leaders fail to effectively illustrate the vital connection between widget production and the wellbeing of the customers who buy those widgets.

How does what you do make a difference? People want to be part of something, to know their work has meaning. If they think their job is simply to show up, perform a task and leave, they have no stake in your success.

I can relate to this personally, because I felt it myself when working for a provider of voice mail platforms. Even in my executive role, I didn’t understand the value of voice messages to the people who used them. It was only after 9/11, when I heard compelling stories about voice messages left by victims for loved ones that I realized how meaningful a message could be.

It’s not always easy to paint a picture for employees that ties your vision for the business to the world a large. Even so, the effort is worth it because it offers employees a sense of purpose that moves their mindset beyond the day-to-day routine.

When people are emotionally vested in the mission of the business (with or without ownership), they’re work a lot harder to see it success. They become an integral part of something, rather than a disposable piece. As a result, they pull together in times of trouble and support each other.

Company Culture is Strategic

The culture of your organization emanates from the top. It’s a reflection of strategic decision, leadership actions and communication styles. It influences your brand and impacts your position in the market.

Although “soft” and difficult to measure, culture is a critical component in the success of your business. As such, the culture your create needs to be intentional.

Moving into your next executive strategy session, make some time to consider your company’s culture. What’s it like now? Where would you like it to be? How can you make the change?

Culture doesn’t turn on a dime, but it can shift over time. If you need to transform yours, there’s no better time to start than now.

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