High performing companies have recognisable traits when it comes to their culture and the opposite is true of poor performing companies.  It is therefore surprising that so many companies do not proactively work to improve the culture of their business. My first example is of a company I worked with that had a destructive culture.  This company had a General Manager who was one of three equal shareholders.  The other two shareholders were Directors on the Board but were not involved in the day to day operation of the business. The General Manager’s wife also worked in the company in a mid-management role.  Even though the company had clearly defined role descriptions, she felt that it was her right to interfere in all parts of the business.  The other managers constantly felt that they were being spied on and undermined in their roles.  If they tried to defend themselves they immediately found themselves in the outer circle of employees, as opposed to the wife’s inner circle. In this position, they then felt completely unsupported by the GM.  The company became divided, employees lacked trust, communication broke down along with several other implications – one of the worst being the continual loss of the best employees. Upward communication in a business is equally as important as downward communication.  It is upward communication that can drive innovation and improvement.  However, a positive company culture must exist for this to occur. Culture filters down from the top.  A positive, people-first company culture starts with leadership and depending on the size of the company that originates from the Chairman of The Board, the Directors, the CEO or the Business Owner. Leadership is about responsibility and it is the business leaders who are responsible for the culture of their company. They must create and foster an environment for a people-first business culture to exist and flourish.  An environment that is one of sharing and learning encourages a shared sense of purpose and must be underpinned with trust. In the example above, the General Manager did not allow a positive working environment to evolve, however eventually the Directors stepped in and removed the wife from the business. Unfortunately this met with resistence from the GM and it got to the point where he also had to be replaced. This was the catalyst for a significant turn around in the performance of this business. My second example is of a company that truly embraced a people-first business culture and developed a team of very loyal and motivated employees.  The company became a leader in its industry. This company had two principles that it constantly worked on improving.  The first was the concept of the internal customer and the external customer.  There are two parts to this.  The first is that the employees treat each other with the same respect as the company treats its customers.  For the second part, the best way to summarise this is to use the following quote from Richard Branson of Virgin fame: “Clients do not come first. Employees come first.  If you take care of your employees, they will take care of the clients.” The second principle that they implemented was that of the no blame culture.  Simply put, when things went wrong they did not look to blame anybody.  Instead, they looked at how they could improve their systems and processes and within this particular company, how they could improve their training. Company culture can be identified as simply as this is how we do things around here.  The employees in this example developed their own saying: “We turned that lemon into lemonade!” This mind-set was not handed down by senior management, but reflected their attitude.  It evolved from the employee’s desire and confidence to turn a negative situation into a positive one. Jack Ma of Alibaba says: “It’s my job to make sure my team are happy, because if my team are happy they make my customers happy.” Another of Jack Ma’s views that is equally as valuable is that for your company to grow and prosper, “you must empower your people” and “always employ people who are smarter than you”. You may think that quoting the founders of such big businesses is not relevant to a small business, but the truth is that size doesn’t matter. These principles apply equally to all businesses.  A people-first business culture leads to people-led business growth . There are several possible drivers of business growth, but people-led business growth is what drives top performing companies.  So, no matter what size your business is, working on your company culture is something you can start right away.

Daryl Narain – The Alternative Board Wellington

BlogThe Importance Of Company Culture
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