Business Culture

Question of the Day - Culture

“My family is just beginning to understand that the business culture has a significant impact on business performance. How best can this issue be addressed strategically with family owners¹?”

Business Personality

The culture of the business has long been overlooked in terms of its impact on performance. There have always been a few outliers who somehow stumbled across some specific cultural practices that supported extraordinary outcomes. But, generally, it’s not widespread. In the past twenty years there has been a noticeable shift. Increasing numbers of companies have placed a greater emphasis on certain cultural practices and experienced improved business performance. This same personality shapes the attitudes about what is most important within the organization.

Leadership Imprint

An organization's culture is a direct reflection of the organization leadership (the senior management and owners). However, culture starts with family values and vision. A careful look at the culture can provide a vivid image of what the family and senior management team models as their "walk." What are they making important? It is an imprint of the business leadership. With an influence as potentially powerful as culture, it is surprising how little time and attention senior management teams spend on developing the desired culture. Indeed, it is even more surprising how infrequently a specific strategy is developed to take advantage of the impact a high-performance-oriented culture can have. There will be a culture. And that culture is definitely going to have an impact on the organization's performance.

Family Harmony I Strong Culture

One of the greatest influences on business culture is how the owners get along. Friction and unresolved disagreement rob a business of the highest levels of achievement. If the family is serious about long term ownership and creating ongoing harmony, the valuable first step is a family meeting to resolve how the business is going to be managed. Critical agreement areas to enable on-going harmony are values, vision, compensation, distributions, and leadership succession.  And remember, it’s valuable to re-visit all of this during a family meeting every other year “to keep the edges smooth.”

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¹Composite of several similar questions