4 Reasons to condiser changing your business culture.

John has just made a major decision and finalized the purchase of the company. He had been the sales manager for several years and asked the family ownership if he could eventually buy in.

Now the whole ship is his and he has some very different objectives than the former family owners. It does not take John long to realize he needs to make some significant changes in order to make his goals.

As we look at the former culture, the family was comfortable and had a nice cash cow that was paid for. John now finds himself with a culture that will hold him back rather than move him forward. After all, he now has a large check to write each month in buying the business.

Obviously there will be many changes in the company as John moves forward; the challenge is determining what culture he needs to create and how to create it.

Take this challenge; put yourself in John’s shoes, only use your current company and you just bought it! Will the current culture work for you or against you? What would you need to keep or change?

We’ll cover four general reasons for changing culture and what the leadership may need to focus on. Just a reminder, this is a very brief overview of these areas, yet should get you thinking.

1.) Survival of the company: This is happening more often than one thinks. If you take the original Fortune 500 companies, only a handful are still in existence. The SBA indicates that a very high percentage of companies fail each year, and not just start-ups, but even Fortune 500 companies.

Just today I read an article on General Motors and their plan for survival. You can only lose billions a year for so long. I am all in favor of providing all you can for your team, but there also needs to be a ROI in the form of production. As I look at the culture that was created, the word Entitlement comes to mind.

So now GM is taking on the union to cut wages, offering early buyouts, closing plants and selling off holdings such as GMAC.

This is a tough culture; it means tremendous change, most of it being viewed from a “what we are losing” prospective. The key in this culture is helping those that need to stay, to take on a view of “What are the core basics that will make us stronger” and keep them focused on those components. At the same time, leadership has to address the emotional loss felt as familiar elements disappear.

2.) Getting Higher Performance: Things may be going well, but how can we get more from what we have? This can be a very exciting format, yet is not for the timid. You may need a large stable of race horses and let them run. This is high energy, minimal rules and continual change.

This type of culture would include the concept of making our mistakes faster so we can figure out what works. It would mean ask more for forgiveness than permission as the race horses push the envelop and jump the fence.

This is about high performance people that need a high level of support with a great deal of autonomy. Teams look for new ideas and probably try them out with very little testing or research. Process, products and approaches are adjusted on the fly rather than deliberated in long meetings. Leaderships challenge is to keep the team running straight and true without hindering them! It’s about directing the race horses’ passion!

3.)Building a Competitive Edge: This has a different twist than Higher Performance. It may not be about being the biggest and the fastest, rather more about being on the edge of innovation, being different than anyone else.

The recent overnight rags to riches of UTube might fit the Competitive Edge. Many people had the technology and capability to create UTube, but only one did!

This is about always being able to improve before it’s broke. It’s always looking for the better way rather than the comfortable way. There are no “sacred cows” in this culture.

The emphasis may be on creativity with everyone being able to participate, including the customers and vendors. It is more about listening, looking and trying than about order and predictability. This may drive the turtles crazy or into their shells.

Take a small company in a perceived dinosaur industry such as the auto parts salvage business. Most people view the picture of the old “junk yard” or “salvage yard”. Not exactly the image of cutting edge is it? Yet a couple of young guys that should have been computer engineers apply cutting edge technologies to this dinosaur. The results, several older established competitors close, customer loyalty is in the 90% range, employee productivity is well above average and the owners have a solid cash cow that has continually grown 10% or more a month since they opened, even in industry down turns!

Yes there are companies that view the world differently and their results baffle the competitors. If you want to be one of these, does your culture fit?

4.)Prepare for growth: Just about everyone I talk to in business is looking at some type of growth in their company. The question becomes “how” and “are we ready to”?

Are the people in place and do they have the skills and attitudes needed for growth? Or are they fighting change and perhaps too comfortable?

What about assets such as cash and production capacity? Fast growth eats up assets far faster than they can be replaced in most cases. Are your people ready to deal with cash flow issues, begging vendors for time, collecting faster from customers and dealing with shortfalls in all areas?

Personally I’ve been involved with 300-400% growth in organizations. It is exciting and fun once you get past the challenges, but the above issues are real on a daily basis. Leadership has to keep the team focused on the long term and have their cooperation with each other on the short term. Team work is probably more important in this culture than in any other scenario. The extreme ups and downs can take a big emotional toll on individuals and the team.

This scenario will also include many aspects from the previous three reasons for change. Each of which requires leadership to focus both short term and long term while keeping it simple so the team understands. Is your team ready for explosive growth?

Conclusion: Any given organization’s culture may have elements from any or all four of these reasons for change. The real question is; “Is your organizations culture created by happenstance or by purpose?” Which of the above reasons may fit for your organization and what are your plans to get the right culture implemented?

There will be more on implementation in our next segment.

For more on “culture change” contact us at Harlan@BusArc.com or www.BusArc.com to see how we can partner up with your culture change.

Harlan Goerger