Company Culture and Sustainability – The Cause and Effect

Some kinds of leaders are more susceptible to losing employees and customers, and therefore unable to achieve sustainability.  This article will focus on the entrepreneurs and the flippers.  They may see significant gains in the short term without addressing culture, but in time, these businesses are like a house with no foundation.  It will crumble.

Very few entrepreneurs start a company because they want to create a best place to work and do business.  They have an idea they want to bring to life. They are taking a huge personal risk, and in the beginning, their priority is growth (i.e. see their idea work, recoup their seed money and start making money).  It may take awhile to pay attention to how their idea is being delivered and received. The risk of failure increases when they lose customers over bad service delivered by employees who don’t care.

Flippers of companies are very clear about their short-term objective of profitability and ROI—metrics that will attract a buyer.  A large advertising agency was acquired by a conglomerate and I watched the enthusiasm of the staff wane as salaries were frozen, lay offs were frequent, and they were expected to do more work with fewer people.  All of these actions improved the bottom line. These “churn and burn” organizations don’t care about culture as much as they do making money.  No wonder 85% of failed acquisitions are attributable to mismanagement of cultural issues.

In both scenarios, when short term gain trumps long term gain, a company can have great success up front.  In time, it is not sustainable.  There’s a better way to do business.

Centric, a Columbus-based consulting company, was founded by partners who wanted to be different.  From the day they began planning the business, culture was the driver.  They defined their “why” and their set of beliefs/core values right out of the gate.  And they made sure every person who came to work there shared those values and used them to guide their behavior.  Centric’s growth and profitability is off the charts.  It has won many accolades including Best Place to Work, which is all the more impressive since it is a virtual company.

Culture matters to the people. Where do you want to work – a company that cares, or one that is incongruent and doesn’t care about their people?  (It’s not rocket science!).

Culture matters to the end users.  Who do you want to do business with – a company with people who don’t care, or who happily deliver what it promises? (You do the math).

As the economy recovers, talented people will be in demand.  They will be incentivized by your competition to jump ship. To many enlightened business owners, this culture thing is a no brainer. To others, it’s a total revelation.  If you agree that when culture matters you will be able to get and keep employees and customers, how do you start?  By finding out what’s going on. Defining your company’s purpose beyond making money. Articulating your mission and your vision, and most importantly, your values.

To find out what is currently going on with your company’s culture, take this Companies Are People, Too easy assessment.  Contact me, Sandra Fekete, for access to five additional assessments and a phone conference to help you interpret the results.  It’s a great starting point!