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Establish a Winning Culture

Culture defines the essence of a business

Published: Monday, April 23 2012 5:34 p.m. MDT

Culture defines the essence of a business

Famous entrepreneurs across the ages have built their enduring companies upon a particular culture that attracted and retained loyal employees and satisfied customers.

Wherever there are two or more people aligned together there is a culture. Families and neighborhoods have a known culture. Churches, schools, athletic teams, charities, ethnic groups and nations all have cultures. And of course, businesses have a culture. I define culture as the behavior or conduct between people. Culture by nature is closely linked to the collective character and shared values of individuals who make up a group of people.

For example, the culture in my parents’ home was positive, with high expectations for personal behavior for each child. It was very clear to my siblings and me that we should love one another and provide service and charity to our neighbors. We knew mom and dad expected us to be excellent students and good citizens.

In a business setting, the culture defines the essence of the organization. It identifies the emotional temperament and physical interface between all employees. It also encompasses the interaction of employees with vendors, customers, investors and media.

I recall with great displeasure and sadness the loss of a major long term MarketStar client some years ago due to the poor treatment its leaders received from my condescending employees. In effect, the client terminated our service contract. The economic loss was in the tens of millions of dollars. Nearly 150 employees lost jobs. Unfortunately, I was to blame even more than several misguided employees. Over time, I had taken for granted the long standing business relationship and had not paid adequate attention to the client's views or needs.

Our culture, which had been established on the theme of taking care of loyal patrons, had somehow changed to it’s not about customers, it’s about us. In an indiscernible way, we had begun to foolishly view ourselves as more important than our clients. As I look back, I note there was also a significant shift in the way employees treated one another. Ill will, contempt, selfishness and greed had become our standard, replacing a more benevolent culture.

We had lost our way and had paid for it. In the midst of self destruction, we looked at ourselves in horror at what we had become. Sorrowfully, we recognized the wayward drift. We noted to our chagrin that our collective personalities had morphed downward.

Prior to our undoing, we had unwisely hired leaders and managers who did not share our original culture of teamwork and a client focus. Heated debates, confrontations, disagreements and menacing contentions between old and new workers became constant. A foreign counter-culture had slipped under the door and was spreading the seeds of destruction throughout the enterprise. Stress, sleepless nights and anger became our way of life. We were unraveling, as a people, day by day.

Loyal and dedicated employees who loved our genesis complained, “Alan, we are miserable. We came here years ago to work for you and have stayed because we loved the culture that had been established. Let's return to who we were and should be.”

Over time, we began to carefully and forcefully correct our missteps and return to the culture that had made us a successful and happy company. The process to change the company was painful and complicated. It required courage, determination and an unbroken will to make things right. Many leaders and employees were asked to resign, others were summarily terminated. Restoring employee morale and client trust took time. Over the course of several years the original culture was restored and the company has grown beyond our wildest dreams.

What have I learned from this unimaginable experience? There are three tough lessons I am happy to share:

First, when hiring new employees, it is imperative to clearly describe to the candidate the declared culture of the company. The goal is to ensure that the prospective employee understands the conduct and behavioral rules that are expected to be honored by all employees.

Secondly, I recommend when a company culture has been firmly established, it should be non-negotiable. Once it is has been declared, there is no room to alter or dramatically change a great cultural model. In fact, if an employee chooses not to follow it, I would invite them to find new employment.

Lastly, if your organization has not established a cultural mandate on how employees behave, I would suggest it be done immediately. Upon completion, it should be communicated regularly and observed closely by every worker.

In conclusion, consider the economic value derived from a particular philosophy. Apple, for example, has a winning culture which attracts the brightest employees and a loyal following of millions of customers. Due to its core mandates of innovation and creativity, it has parlayed its traditions into a company with an enterprise value that is greater than most nations.

How would you define the culture of your business? What are its key attributes? I look forward to hearing from you. If you have a cultural story to tell, reach out to me at www.AlanEHall.com or @AskAlanEHall.

Alan E. Hall is a co-founding managing director of Mercato Partners, a regionally focused growth capital investment firm. He founded Grow Utah Ventures, is the founder of MarketStar Corp. and is the Chairman of the Utah Technology Council.

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