An MBA Caliber Education Outside of the Classroom: Building Good Company Culture : Under30CEO An MBA Caliber Education Outside of the Classroom: Building Good Company Culture : Under30CEO
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An MBA Caliber Education Outside of the Classroom: Building Good Company Culture

| August 27, 2012 | 0 Comments

In the last decade, the relative importance of company culture has shot up in value, due to findings that demonstrate that employee satisfaction leads to increased job performance. Not only do customer relations boom with increased morale, but the need for supervision decreases, which allows leadership to focus on making business decisions rather than on monitoring employee progress. This is all well and good, but the real question is, how does a company determine its culture and the morale of its employees?

First, let us define culture as a set of:

  • Beliefs
  • Behaviors
  • Assumptions

These aspects of culture shape the interactions between members of a company and those professional relations outside the company. It is easy to turn culture into an academic topic, simply because it is abstract, but a doctoral rendering of the subject needlessly complicates the issue. This is the case because company culture usually happens without any conscious decisions whatsoever. It can be influenced but not created.

Dr. John D. Halamka, a healthcare CIO who manages 3,000 doctors, posted a set of questions that management can use to troubleshoot company culture. The fundamentals are:

  • Is communication open, or do debates lead to passive-aggressive behavior?
  • Do managers share accountability for operations
  • Are expectations clear?
  • Do employees demonstrate loyalty and trust?
  • Do employees have a means to communicate dissatisfaction?

Guidelines, such as these, may be more beneficial than any specific set of rules, the reason being that companies morph over time. New divisions are added; new employees are hired; and new client bases are discovered. All of these permutations that a company may undergo will necessitate adaptations in the culture.

For example, when startups achieve a new source of funding and expand, there are new rounds of hiring. Employee population can easily double or triple, and conflicts can arise between old workers and new hires. Hierarchies can develop, which can impede lines of communication. Old employees can latch onto the old status quo and feel entitled and empowered, particularly when they have longstanding relationships with executives and new hires do not. Suddenly, new hires come into positions of helplessness regarding the standards they are held to, which hampers development and leads to low morale. Executives can avoid this situation by reaching out to new hires personally with the assurance that any problems or concerns may be voiced in a secure channel.

Other approaches define specific principles that will drive cultural growth. Jim Stengel, author of Grow: How Ideals Power Growth and Profit, vouches for a simple set of principles that a company should strive to reach at all times. Rather than attempting to understand or control exactly how employees adapt to growth, acquisitions, and other changes, he suggests designing an abstract vision around business constraints. Stengel recommends:

  • Communicate and operationalize a high-minded dream, which is aligned with the company’s long-term success
  • Define integrity for the company, or what the company stands for internally and externally
  • Reward and support innovations
  • Train constantly
  • Think like a winner

Steve Jobs executed these major principles when he returned to Apple in 1997 and created a vision around simplification and consumer-oriented products. Healthcare companies may choose to create similarly externalized goals to serve clients in a unique and defining way. Gathering care around a principle, such as compassion for instance, helps develop employee confidence and engagement.

All of this boils down to two simple goals. First, define and follow up on a set of principles, and second, maintain a workplace of open communication and clarity. These are both simple to understand and exceedingly difficult to execute on a daily basis. Practice, not study, makes perfect.

Today’s post by http://www.mbaonline.com writer, Julianna Davies, explores the lessons to be learned from building a good company culture. In this piece, Julianna draws attention to what influences corporate cultures, how companies can maintain certain cultures while expanding and evolving, and how open lines of communication facilitate these inevitable changes. Building on the arguments set forth by Under30CEO’s post on the secrets of building successful company cultures, Julianna emphasizes the importance of clearly defined principles and open communication.

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Category: Startup Advice