Culture is the Force and May it Always be with you!

December 31, 2015

Talk to any owner or senior executive and they will acknowledge that workplace culture is as important as business strategy. We agree with that but it is also important that we understand what that means and not just go along with the sentiment.

The way work is conducted, behaviors are rewarded, co-workers interact and important news is communicated all contribute to organizational culture and that in turn determines such things as how relationships are forged with customers and suppliers, what happens to profits and the growth of enterprise value. Culture is a melting pot of practices and behaviors and isn’t formed by accident.

Talking recently with a group of ownership transition experts the consensus was that owner managers viewed culture as something that just happened but they all agreed that ignoring it when planning a major event (e.g. merger, sale or even a senior hire) was bound to destroy value.

The workplace is an easily disturbed, delicate ecosystem and anticipating the impact on culture is an important part of planning for any major event. Their recommendation was that leaders needed to think of their employees like a sports team and that any change, distraction, or threat could affect confidence and lead to a drop in performance.

Culture is multifaceted, some employers work at it, others allow it to naturally evolve by extending their personal values to their leadership style. Family run organizations often have the strongest values that cascade from the family’s values.

A complex project is not required to understand your culture and what feeds it. An analyst looking in will quickly identify the key features and barriers to the environment that you seek. For example, an organization that pursues an entrepreneurial culture will never get there with an onerous internal approval process that slows speed to market and discourages risk taking. An organization that overly stratifies work will encourage a culture driven by status rather than performance but a ‘performance challenged’ culture may not need a complex solution to fix.

Culture is inseparable from engagement - the holy grail of better performance. What you do to support what you say (i.e. that plaque of values that hangs in your reception) creates culture. Synchronize these and you start to achieve the culture you want.
Culture beats strategy every time according to Jack Welch. So think about this:

  • Do you have the culture that you want?
  • Is culture blocking the levels of engagement and performance you expect?
  • As a seller or buyer of businesses do you ignore culture?
  • Culture is like “the force” and may it always be with you!

THW can analyse your culture and recommend what you need to change. 

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