why culture matters in business
Why culture matters and how does it guide the members to achieve the desired outcome?
“Earlier this year I asked myself: why culture matters? Then I started to focus primarily on culture and process implementation. Our business was growing too fast and the lack of processes made us top heavy – we were on the verge of collapse and came to the conclusion that culture matters. Our business needed processes to help us survive and sustain our growth, but our culture issues at the time made it very difficult to implement them. After months of research, I wrote this article for internal use. I never intended to publish this so I apologise for not referencing to the sources of some of the material, but I felt that it is extremely valuable to share, especially for companies experiencing rapid growth. It is a long read but well worth your while.”
We are a creative group of companies that rely heavily on the talents of our people to produce their highest quality work – as do most other types of companies. The talent capabilities of our people are very much linked to their mindsets and their happiness levels. There is a big difference between just doing enough not to get fired, and putting in everything to produce your best work and strive to do better job after job. Only a great company culture can produce such performance, whereas a bad culture produces low quality work. The question I was asking at the time was “can we really blame bad work on our team members, if senior management keeps breaking down the culture?
Culture matters, so build a strong one.
As a business owner, you have to continually ask yourself: Why Culture Matters? Culture breeds from both sides, from senior management downwards and from bottom level staff upwards. The most important is senior management. If management is not serious about building a strong culture, employees lose trust and won’t care much about the culture either.
Stephen Sadove, chairman and chief executive of Saks, agrees that culture drives numbers: “Culture drives innovation and whatever else you are trying to accomplish within a company — innovation, execution, whatever it’s going to be. And that then drives results,” he said in a New York Times interview.
Some have the view that processes and structures are more important than culture. My view, from what I see I in our company as well as in my research on culture and processes, is that without a strong culture good processes and structure is meaningless. If the team doesn’t believe in the vision of the CEO, they won’t follow processes and adhere to structures.
So why not just replace staff that don’t care?
All you’ll be doing, is creating a bad cycle of high staff turnover. The best employees in your industry won’t work for an executive team that doesn’t put culture first and that doesn’t provide the freedom they need to work in. In a creative or innovative space, performance is measured in output and not in time clocked in.
How you get things done drives performance.
These issues of trust, conflict resolution, and co-ownership are foundational for how your team gets work done. Culture is the set of habits that allows people to co-operate by assumption, rather than by negotiation. Based on that definition, culture is not what you say, but what you do without asking. A healthy culture allows teams to produce something with each other, not in spite of each other. That is how a group of people generates something much bigger than the sum of the individuals involved.
So if you only get 2+5+10 = 17, you haven’t gotten any benefit of leverage. What you are looking for is 2*5*10 = 100, delivering an explosive return on effort. Culture enables or obstructs a velocity of function. By addressing where your company is limiting its velocity, you can accelerate the engine that fuels innovation and growth, and, ultimately, financial numbers.
Culture will trump strategy, every time. The best strategic idea means nothing in isolation. If the strategy conflicts with how your people already believe, behave or make decisions, it will fail. Conversely, a culturally robust team, can turn an average strategy into a winner. The “how” matters in how we get performance.
So how do you create a culture where processes form the center of it? The answer to building a company where processes and culture take equal credibility is to create a “process culture”.
What is a “process culture”?
An organizational culture that supports the design and maintenance of efficient and effective business processes, constitutes process culture. Business process is a logical link between your business strategy, business model and day to day operations. Process culture is a manifestation of people behaviour, attitude and practices that drive the activities they perform on a day to day basis to impact your company’s strategic objectives positively on a consistent basis.
Why do you need a Process Culture?
Translating strategic intent into execution is the key objective of developing a process culture. Process culture brings the much needed discipline to ensure you stay on track and your people do not take the easy way out, but rather follow the standard path optimized for the company.
Without process integrity, lean designs deteriorate quite quickly and improved processes can soon become sub-optimal and inefficient. Process culture nurtures and sustains each business process and continuously aligns it to the overall organizational goals.
So how do you achieve process culture in your organization?
You need to have the end in sight:
It’s essential to have a view of what you want to achieve or the benefits you see from a process oriented company. The end objectives will define the actions needed to achieve them and that will form the basis of your rules around those actions.
What are the results of our actions?
• Are you driving up the revenue or driving down the costs?
• Are you driving process monitoring and optimization through a digitization?
• Are you driving standardization across all our products and pricing strategies?
• Are you re-vamping your organization to the new market dynamics and changes?
• Are you striving to create real significance rather than just being good?
You need Leadership Buy-In.
Your entire leadership team should see the value of going through the process journey and should identify the CEO to be the forerunner of process culture.
Managing processes is not glamorous and that’s the reason why many don’t want to be responsible for it. As a result, process management often remains without an owner or split between multiple management members that take partial ownership. Thus, the first step to developing process culture is to identify an owner who acts as a custodian and provides a home for these processes.
You need clearly defined guidelines to govern process actions.
Culture is an aggregated outcome of the actions and intentions defined by a group to guide the members to achieve the desired outcome. An organization needs to define the principles and guidelines that guide its members’ behavior towards processes.
You need to link process objectives to individual metrics.
Establishing a culture requires leveraging the right rewards and recognition mechanisms. In many organizations, annual performance management has explicit goals to reinforce process thinking, as appropriate to the individual’s role. This ensures that your people are aligned to the overall company’s objectives.
You need to continue supporting your process culture.
Establishing a culture happens over generations. Efforts put into this journey will show results only after a certain gestation period so continuing to support your efforts is the key. Developing a process management practice, getting all processes documented and making them a way of working takes a minimum of 3-4 years and after that requires minimal continued investment to keep it relevant.
One of the biggest stumbling blocks is communication and this has a detrimental impact on process culture.
As a company you could be scaling up from a start-up, to become a national or multi-national organization, therefor in need of change in your way of working and inherent process culture quickly. You need to win your peoples’ hearts and minds and gain buy-in to a process-aligned approach from the initial ad-hoc approach needed to support your start-up culture.
As you grow into a large organization, communication on the ongoing process changes and its impact on your people and technology is equally important. The team that drives your process should leverage data to showcase the benefits of adopting a process culture and communicate it regularly to all concerned. A well informed team can act in a coordinated fashion to ensure that the processes are executed as per design and are always on the improvement path.
You need to build a governance mechanism and operationalize it.
Assign a team within the organization to focus on process as part of their existing roles and specifically identify Process “Champions” who are responsible for certain process areas. The team should meet regularly, set priorities, discuss progress, and share successes to ensure that the process management is continually living and breathing. This team not only drives process improvement but also coordinates the numerous initiatives across the organization while keeping the senior management involved.
Most leaders understand the business case for process alignment and the competitive advantage it provides through a diligent process focus. However, they struggle to establish the right discipline around process adherence and understanding the strong link between culture and processes.
Without processes, building a strong culture is difficult, but with a weak culture, there is no place for the existence of processes.
Establishing a process culture by defining clear guidelines and then reinforcing them through various mechanisms is essential in changing the fundamental behaviour of your people towards processes. People buy in, is the fundamental key to building a strong process driven business.