SUCCESS OR FAILURE IS DETERMINED BY YOUR COMPANY’S CORPORATE CULTURE.
YOUR COMPANY’S FUTURE DEPENDS ON YOUR CORPORATE CULTURE
Here is why and how.
Mostly taken for granted, often ignored and seldom checked, is your company’s corporate culture. The corporate culture is responsible for just about everything that happens, or should happen in your business. You can try to improve things or have consultants come into your business and do wonderful things; if your corporate culture is negative, you will, for the most part, waste your time and money. It is however possible to identify if your company’s culture is negative or
positive. But first:
1) WHAT IS CORPORATE CULTURE?
By definition from the "ENCYCLOPEDIA OF BUSINESS TERMS" Corporate culture is:
The philosophy, values, behaviors, dress codes, etc., that together constitute the unique style and policies of a company.
Corporate culture is everything that affects the company, it is the company's unique "style", or "the way we do things around here", to quote Marvin Bower from his book "THEY WILL MANAGE".
Every company has a corporate culture (except the one person operations), and every company's corporate culture is as different as one person is from another.
Corporate culture is a company's foundation and its walls; everything is built on that foundation. Every decision, every problem solved, the very thinking of the managers, employees, even customers, when they think about the company or the product is influenced by its corporate culture. Corporate culture is the company and the company is corporate culture, you cannot have one without the other; they are inseparable and cannot exist independently.
In order to understand the importance of a company's corporate culture better it is necessary to understand the purpose for the existence of a business.
The reason people want to be in business varies and often depends on how the business is acquired. There are only three ways a company can be acquired.
A) Through purchase from the previous owner/s
B) Through inheritance or taking over a family business
C) Through start up
Companies purchased or starts up companies usually have the same reason for their existence, to make a profit and to provide the owner with his/her needs. The needs of a business owner could vary a great deal and often they (the owners) are not consciously aware of the needs to own a company.
In several thousand interviews with company owners the answer to the question “why are you in business?” usually starts out with the same answer "to make money”. The answer to the next question is however more revealing. Why do you want to make more money? Most company owners find this question somewhat unsettling, often even disturbing; at least it is something they have not though about before. After several minutes of reflection they invariably come up with the real reason why they are in business, such as:
To do the things I enjoy doing.
The freedom to do what I want.
To make a difference.
To be in control of my life and my destiny.
It is the real reason why you are in business that determines your company’s corporate culture (so make sure you know what that is).
The conclusion is that most owners are in business for two reason, one is to make money, this is a given because most business owners understand that a company needs profit or it will not survive. But interesting enough money or profit was not the real motivator, only the, what I call the "conscious motivator". That means they bought the company to make money (conscious thought process) the real reason, or the subconscious reason for buying the company is almost always about improving quality of life (besides money), and about feeling good about ones accomplishments, and about one self (that is the foundation of your company’s corporate culture).
Companies have only one logical reason for existence and that is to provide the owner with his/her needs. When these needs are not met, the owner loses interest in the company and the company will, either fail, be sold, or must change (like re-engineering or bring in a consultant).
The owner's believes, wants, needs, goals, values, philosophies and perceptions of all issues affecting the success of the company now become this company's corporate culture, or how we do things around here.
Companies that are inherited or taking over for the family are owned and often managed by a person who has a different view from the original owner of why this company should be in business. Owners who inherit or otherwise "takeover" a company without any effort on their own, are the most difficult owners to deal with (based on some consulting experiences). When ask why they are in business, often they get angry because they feel somewhat guilty about being in business, like they don't deserve this and they should not be here. Out of their guilt they make up some "higher purpose" for the existence of the business, which has nothing to do with the original purpose of the company. During a one on one interview, here are some of he more frequent comments to the question “why are you in business?”
We are here to serve the industry, the people, and the community.
To give something back and provide jobs for the community.
I have never though about it and I don't really know, to make money I guess.
To make this a better world through our product or services.
The corporate culture of these companies tends to get a little bit more confusing, because they have goals that are not compatible with the natural laws of business (free enterprise/capitalism). The corporate culture of these companies is now changing from capitalistic to altruistic. Of course, the managers and employees still try to cling to the “old values” (make a profit and beat the competition). A company with altruistic values will not prosper for very long (not for profit companies excepted).
Since a corporate culture changes from the top it is important for the owner of the company to know that if his/her views are not compatible with the views of the managers, the owner must reevaluate his/her views of the business. The managers must convince the owner that his/her view is not in his/her best interest. This is a very difficult situation and often cannot be resolved without outside intervention. If it is not resolved, the company will not survive. The corporate culture of this type of business can be clearly identified by the goals of the company or the lack of goals.
In larger companies, who produce annual reports or even videos for the employees (or as a sales tool) will often talk about totally unrelated issues that the company is known for, they seldom talk about what made the company great, what they are proud of, the product or services they produce and the people who make it all happen. These companies talk about issues that have nothing to do with business and certainly nothing to do with the company. They try to be "cute", "clever" and "artistic" or even "politically correct" all which has noting to do with what the company does (or should be doing).
Of course, if the owners’ needs are un-focused, the entire company will not be focused. This company will not survive. To create a strong corporate culture for your company, make sure you (the owner) have clearly identified goals and objectives.
There are four basic types of companies
1) The one-person owner company
This company has one owner and he/she runs the company the way he or she sees fit. There is no corporate culture to be concerned about.
2) The multiple owner company with employees.
The corporate culture in a multiple owner company could take on multiple faces. Each owner bought the company or started the company for a reason with certain expectations. The purpose of the company is to meet these expectations (needs). Each owner will make sure that his/her expectations are meet.
Since each person has a different personality and different needs (expectations) each owner brings a different culture potential to the company. Unless the owners get together and decide on a clear path for the company, camps will develop within weeks (one camp for each owner).
When a company has three owners, there could be three separate cultures, like having three separate companies. Often this works out fairly well, as long as they compliment each other, or the people do not commingle too much.
3) The stock company
Stock companies have a president who reports to a board of directors and the board of directors reports to, or is accountable to, the stockholders. The owners of the company (the stockholders), usually, buy the stock for only one reason, to make money now or in the future.
There is no other reason for this company to be in existence except to make money. How to go about making money however is a completely different story. A president tries the best he/she knows how and if she/he makes a decent return on investment, the board of directors will keep him/her on the job. The corporate culture is even more important in a public company then in a private company, because the mission is very clear, but the execution is at best ambiguous.
The mission is to make as much money (for your stockholders) as you can. The execution is left up to you. The board of directors will constantly second guess you and engage in "Monday morning quarter backing". As president, you have a very difficult job and the corporate culture can be your best ally if it is positive, or worst enemy if it is negative.
When a president takes over a new company the corporate culture is already in place, probably long established by previous owners and presidents. The corporate culture must be clearly understood by the new president if he/she wants to survive.
4) The not for profit company
In not for profit companies the corporate culture is mostly what the mission of the company is all about (the objective of their existence) and carried out as best as possible by the employees.
There are no different issues here because a not for profit company is the same as a for profit company except they are tax exempt and can’t take the “profit” out of the company.
Even this type of company must make a “profit” (called surplus), if they do not they will perish, or get subsidized. The corporate culture in a not for profit company is often altruistic and success or failure does not have the same meaning as in a for profit company (I doubt anybody who manages a not for profit company would read this article anyway).
THE AFFECT CORPORATE CULTURE HAS YOUR BUSINESS
Corporate Culture is the engine that drives your business, or "how we do things around here". Corporate Culture is what makes or breaks a business. Research indicates that success or failure of a business can be directly linked to a positive or negative corporate culture.
The affect corporate culture has on business is like that of a subconscious on a person. Whatever happens in that company, whatever decision is made, and whatever problem is solved, or whatever idea comes forth is because of that company’s corporate culture. Your company’s corporate culture is your company’s subconscious.
In people (like in business) the subconscious controls 80% of what we do. If the subconscious is not in sync with the conscious mind things start to go wrong.
In business, the corporate culture (or subconscious) must be positive because it controls 80% of what you do, or should be doing. The other 20% has to do with implementation of goals and objectives (that is a topic for another article).
In summary, nothing happens in your company that is not, in one way or another, controlled, or at least influenced, by your company’s corporate culture. Your company’s corporate culture has direct impact on its success or failure.
HOW A CORPORATE CULTURE AFFECTS THINKING AND PRODUCTIVITY.
There is an old saying, "we make true what we believe" Corporate culture is a believe system, it is the way we do things around here. It is important because the guidance that makes decisions, solves problems and motivates people, comes from our believe system. Everything we do is guided by our believe system, or our mind’s subconscious. How we feel about certain things, like the company and what the company stands for determines what decisions we make. If that believe system is not in tune with the belief system of all the managers and employees, the person or persons with the negative believe system (other than that of the other employees) will not be effective in making decisions and will not be effective in solving problems. These people will, without realizing it, default in their problem cause and effect identification (decision making).
HOW TO DETERMINE IF YOUR COMPANY'S CORPORATE CULTURE IS POSITIVE OR NEGATIVE
A corporate culture can either be positive or negative. What makes a corporate culture positive is when all managers share the same perception of the issues that affect the business with the owner, or CEO and each other. What makes a corporate culture negative is when they do not.
A different perception (negative corporate culture) acts as a filter that distorts communication between all managers and the owner or CEO.
Shared perceptions (positive corporate culture) results in clear communication between all managers and the owner or CEO.
Different perception always results in distorted communication which makes a "problem cause and effect identification" impossible, resulting in managers, either solving the wrong problem, or giving up (complacency). This undermines their confidence and self-esteem and results in "let's bring in a consultant" (at $200 to $350 per hour).
In order to determine if a company's corporate culture is positive or negative, all we have to do is ask the managers.
The process is extremely simple, providing some basic conditions are met.
1- It must be safe for the managers to speak their minds, no repercussions and no penalties. Managers will not share their true feelings with others unless it is safe for them to do so.
2- Everybody must agree to be totally honest with each other and most importantly with themselves.
3- The owner or CEO must keep an open mind.
Schedule a meeting with all key employees (managers). Tell them the purpose of the meeting; that you want to improve communication and find out if everybody is on the “same Page”.
What you want to do is ask your managers what their perception is on certain issues that affect the company’s performance.
Have each manager prepare a list of issues they would like to discuss.
At the meeting take one issue at a time and ask each manager what his/her “take” is on that one issue.
If all managers share the same perception (they are in agreement to the problem and the solution)
of the issue move on to the next issue.
It is important to keep track of the issues and the different perceptions of the managers.
The more issues you have with shared perceptions of the issues and what needs to be done the more positive your corporate culture is.
Any issues management does not share the same perception need to be addressed immediately.
Again, to determine if your company's corporate culture is positive or negative, all you have to do is ask your managers; really, it is that simple.
And remember, a company with a mostly positive corporate culture will never require outside consulting services.
Success Or Failure Depends On Your Companys Corporate Culture - To learn more about this author, visit MIchael Otto's Website.
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