A common challenge many entrepreneurs face as they grow their business is managing their culture to either sustain or alter it's identity for the better.
Business leaders who decide to transform their company culture face a variety of forces that can undermine the effort.
Sometimes a business culture breaks down because of poor leadership or ineffective operational policies and practices. Sometimes a culture doesn’t fit a company’s objectives because of the people involved, or because the company has outgrown the blueprint that made successful during it's formative period.
Whatever the case, it is important that entrepreneurs carefully examine their company culture and consider the kind of culture they would like to nurture as their business matures.
A culture is the byproduct of the people who are involved in cultivating it. At its head is the entrepreneurial leader, the founder, or the CEO, and within it's body are all of the stakeholders committed to making the enterprise a success. Both the head and the body must be in sync and answer to each other’s needs.
Above all else, it is the responsibility of the entrepreneurial leader to set the right tone, compose the organization's manifesto, define the company’s cultural blueprint, and nurture it over time.
Here, we examine a variety of ways entrepreneurs can manage their company culture to sustain it's positive impact.
Beginning with executive policies, entrepreneurs can employ a variety of methods to enhance or transform their business culture from their executive position as leader of the enterprise.
Among the variety of ways to enact meaningful change upon your company, consider the following 6 strategies.
A. Encourage freedom
Successful startups that grow into mature companies typically become more bureaucratic over time from implementing rules and procedures to manage it’s growing workforce.
Entrepreneurs should avoid this tendency at all costs because it limits innovation and enculturates a static workforce of individuals more focused on retaining their position than executing the work demanded of them at the highest standard.
B. Be Flexible With Time Off
A growing trend among young companies is to offer no limit to vacation days. While some employees may abuse such a measure, the practice will reveal the individuals who are personally invested in their work and the success of the company from those who are not.
Overtime, you will build a group of self-determining people who are highly committed to performing at the highest standard. Achieving this will resolve the issue of any individual taking too much time off because of the peer pressure to be engaged and deliver the highest quality results.
C. Be Flexible With Salary Budgeting
Startups should avoid locking themselves into a gradual raise structure. Executive leaders should instead base any salary adjustments according to the current market standards.
Human Resource leaders should closely examine changes in the labor market on a yearly basis to anticipate future changes and needs.
This approach will help your leadership produce a reputation of fairness with respect to your compensation structure, which will increase loyalty among your stakeholders. Plus your company will maintain a high level of employee retention.
D. Offer Generous Severance Packages
A significant risk early stage companies face during their formative period is underperforming or mediocre employees. Particularly when your startup team is between 5-20 individuals, a single underperforming team-member can become a real drag on the performance of the business.
When this situation arises, it is imperative to quickly take action and remove the underperforming employee. However, it is equally important to professionally manage such situations with grace. The best way to deal with potentially problematic team members is to provide generous severance packages.
Doing so not only improves the likelihood that the conflict reach a speedy resolution, but the policy will improve the attitude of your entire team. Employees who know that they will treated fairly, even in the event of a relationship breakdown, will feel more valued and motivated to do the work demanded of them.
E. Be Ruthless With Jerks
Establishing a company culture requires that every individual make certain personal concessions about their opinions and behavior for the benefit of the business and harmony of the group.
When a person fails to make a meaningful effort to assimilate to your company’s culture, at the extreme a jerk, it is important to take immediate corrective action and remove the individual.
Even if the jerk is a star performer or an essential talent, the long term viability of the company and the collective effort of the team is more important any individual’s contribution. A ruthless approach with troublemakers sets an example to the rest of your team about what is and what is not appropriate behavior.
F. Team First
The last policy that can meaningfully improve your company culture is to always place the team and company above everything else.
The company should be perceived as its own entity that needs nurturing from every stakeholder in order to succeed. Ultimately, the needs of the business should supersede the needs of it’s executive leaders.
Adopting such an approach will enhance the collaborative atmosphere of your business and improve the commitment levels among all stakeholders to execute the vision of the company.
Applied together these executive policies can transform a company culture into a more inclusive and driven environment with high standards and efficient policies that empower individuals to deliver the best work.
Human Resource Policies
Entrepreneurs should not forget that people make up their company culture. Therefore, a primary objective for executive leaders is to collect as many of the right people as possible that positively represent your brand and drive your company towards success.
To build upon the executive strategies, consider the following human resource polices to enact cultural change within your organization.
Possibly the most important human attribute in business, integrity ensures that the beliefs and a actions of every individual will virtuously align towards the broader mission of your business.
People with integrity are honest, fair, well intentioned, trustworthy and act with honor. When given hard choices, individuals with integrity will typically choose the best outcome for the team, rather than just themselves.
Startups should avoid hiring anyone who displays questionable integrity. Such individuals can damage the cohesion of a group, and in the worst case harm the reputation of the company.
Intelligence represents the second most important human attribute for HR. Hiring individuals that display a high level of intelligence will ensure that the most talented and/or qualified people are tasked with solving your company's challenges and innovating your business solutions.
A common pitfall startups face is leaders who avoid hiring individuals who are visibly smarter than they are. Leaders should not be intimidated by the intelligence of any subordinate, and instead embrace their involvement.
Business is competition, and in order to win you need to build the best possible team. Entrepreneurs should make sure HR’s primary imperative is to consistently hire the best possible talent.
The third most important human attribute HR leaders should seek among possible candidate is passion. A passionate employee will always outperform an apathetic individual, even if they are less intelligent than their less motivated counterpart.
Entrepreneurs should always seek to recruit people who are passionate about your cause, inspired by it's challenge, and committed to the mission of the business.
D. Culture Fit
The last human element HR leaders must consider is whether or not a candidate represents a good fit for the company’s culture. The challenge entrepreneurs face in this case is to avoid creating a workforce that is overly homogenous because creativity and innovation require a diversity of perspective and experience.
Therefore entrepreneurs should seek to build a diverse group of individuals that share some core underlying values, experiences and/or competences.
To execute an effective human resources strategy it important to never compromise on the core values upon which your company is built.
Maintaining standards over the long-term is undoubtably a challenge, but the affect of abandoning your core values can be devastating for the culture of your business and it's performance in the marketplace.
Significant HR policy changes often result in the destabilization of your company's authoritative and power structure. Employee relationships will erode directly harming collaboration and innovation, and a profound mistrust of the business’s strategic direction will permeate among your staff.
It is therefore, imperative that entrepreneurs seriously consider the kind of company culture they want to implement and cultivate over time.
Practically speaking, it is much easier and more efficient for companies to evolve along a ‘stay the course’ strategy, compared to growing the business through dramatic structural changes on a cyclical basis.
Culture of Transparency
The most effective way to ensure that your company culture produces the right policies and encourages the best habits is to instill a culture that embraces transparency.
Embracing transparency effectively means the sharing of information and authority within an organization or group.
This policy has the positive effect of engendering trust between stakeholders and encourages learning and exploration, which results with people making smarter decisions that are more widely accepted and embraced by the company.
With access to the right information, every individual in the company acts like a vested owner of the business. And, being fully aware of the stakes and the challenge, employees will make decisions that positively impact the business because doing so will empower their professional experience and standing among colleagues.
To cultivate a culture of transparency, consider applying the following policies:
A. Hire Trustworthy People
Somewhat obvious, but it is very important that entrepreneurs hire people the instinctively trust. Leaders must be comfortable empowering their team to think like owners of the company, so that decisions are made efficiently and challenges overcome. When employees consider themselves as part owners of a business they naturally seek more responsibility and autotomy to create new impactful solutions that propel the company to greater heights.
B. Practice Openness in Meetings
To build trust, entrepreneurs should practice honesty and openness during all of their business meetings. Sharing important details about the company’s strategy, finances, HR policies, and other priorities will not only effectively transmit relevant information to the right people and across the company, but it will improve the trust between employees and management.
A growing practice among early stage business is to hold AMA (ask me anything) meetings several times a quarter, where staff can ask any question and expect a fair answer. For this policy to work, it is important to have no limits on the kind of questions employees are allowed to ask.
Such dramatic honestly will improve the likelihood that mistakes are corrected, insights learned from shared experiences, and victories appropriately celebrated. The end result is a more efficient, well-intentioned and adaptable business.
C. Practice Honesty with Customers
Embracing transparency should extend beyond the borders of your company to include your customer base. This means employing very honest marketing and public relations strategies that hide nothing from your customers, particularly fees.
If appropriate, provide a pricing tool for customers to easily discover the costs associated with your product or service, and be comfortable recommending other solutions when customers feel that your specific solution isn’t a good fit.
Such honesty will endear your company among your loyal customers over the long term.
D. Proactively Search For Feedback & Disclose It
Possibly the greatest benefit of embracing transparency is discovering ways to improve your company from eliciting feedback from your own team. Employees can represent valuable critiques of your company's practices and your business solution because they are directly affected by your strategy and it’s results.
An easy way to collect feedback is to organize quarterly surveys designed to measure product quality, organizational processes & practices, engagement, executive leadership and the company’s alignment to it’s core values. For honest answers, make the surveys anonymous, but share the results with the whole group.
This approach will enhance the cohesion of your group, promote learning, encourage self improvement, and sustain the authenticity of your company’s culture over the long term.
E. Observe The World Around You
An often overlooked element of enabling transparency is to be acutely observant of the market your business operates in and your surrounding environment. Be examining how other businesses operate, companies can gain insights into new techniques and practices that can be then adopted for your business.
Keeping a close eye on your surroundings is an effective way of recognizing whether or not your company is doing the right thing, and in the right way. Plus a culture of observation will be acutely aware of what polices and incentives attracts the best talent and how to retain it.
E. Share Your Values
The last element that meaningfully contributes towards a more transparent culture is maintaining a high level of integrity and doing the right thing, not matter how hard it may be.
This practice is particularly crucial for entrepreneurs and CEOs, who should be comfortable acknowledging and owning up to mistakes when they happen. Perfection is an unrealistic aim and standard.
Rather than hide deficiencies, be open with people on the inside and outside of your company about the shortcomings of the business, areas where you could improve, and how you will go about improving your company.
Demonstrating sincere humility will endear a leader among his/her subordinates, and the practice is the best way to acknowledge and effectively solve problems within a business.
Embracing these policies and practices that support transparency will impact your company’s identity and culture in a variety of measurably positive ways.
Fundamentally, the effort will enhance the camaraderie and sense of purpose between all of your stakeholders, and together you will cultivate a business that is acutely aware of how it can best serve it’s customers with lasting staying power in the marketplace.
Culture of Silence
While examining the positive ways a business culture can be affected is vital, it is also important to recognize the ways in which a company culture can be harmed.
Among the many practices that damage and company's culture, few are as harmful as the intentional or or unintentional cultivation of a culture of silence.
Cultures of silence essentially prevent communication and transparency between individuals. This may occur for a variety of reasons including; difficult & unsocial colleagues, stubborn superiors, an intimidating bosses, or dramatic leadership transitions.
Over time, the consequence of a silence culture is typically a striking loss in the quantity and quality of a company’s workforce. Cultures of silence are particularly problematic because critical problems relating to individuals and the company are never effectively addressed.
Without proper channels of communication, a small issue can snowball into a catastrophic problem capable of rendering a company ineffective and bankrupt.
Here, the underlying problem is a reflection of basic human nature, namely the reality that people prefer to avoid conflict rather than engage it.
In cultures of silence, employees may recognize a problem with a policy, practice or colleague, but are unwilling to confront the issue for fear of a conflict and it's possible repercussions.
Of the areas where individuals can feel pressured to remain silent, 5 broad categories can be clearly identified;
A. Disrespectful Colleagues
Individuals will naturally turn away from confronting abrasive and disrespectful colleagues. In many cases employees suffer from the harassment of colleagues and superiors, the withholding of critical information, and any resistance to provide meaningful feedback. In this case, silent cultures are abusive and demeaning. They encourage submission rather than meaningful dialogue and confrontation.
B. Strategic Missteps
Employees will often refrain from making any commentary on policies and procedures that are clearly problematic, ineffective and based on false assumptions. Many individuals would, tragically, prefer suffering the unintended consequences of bad policies rather than confront their effectiveness and propose alternatives.
This is particularly true when executive leaders make critical decisions without first consulting the people who will carry out the policy, or experts capable of providing insights into the policy's effectiveness.
Such actions demonstrate little concern for the people who do the hard work and damage moral.
C. Lazy Colleagues
A culture of silence encourages all the wrong habits. First and foremost a lackadaisical approach to reporting poor behavior, laziness, incompetence and any lack of engagement between peers and superiors.
A silent culture encourages a "keep your head down" atmosphere that erodes accountability and autonomy.
D. Abusive Superiors
Failing to create mechanisms that support meaningful communication throughout an organization will produce the adverse result of superiors who abuse their power by resorting to their position to control and push their agenda.
In many cases, the personal agenda of an individual or leader will run counter to the broad agenda of the company, in which case the executive authority of the company's leadership is undermined.
The last area where culture of silence can be exacerbate a business is the failure of management to clearly define roles, clarify responsibilities, establish policies and set expectations. Silent cultures produce employees who refrain from asking important questions that seek to clarify and guide their actions.
Without the right guidance employees will feel unsure about the direction of the business and of the long term security of their position. The result is a static business that can suffer damaging economic consequences from not adequately adopting to market changes.
One of the unfortunate consequences of silent cultures is that insecure employees will spend a significant amount time expressing their concerns with confidants rather than doing the work expected of them, which exacerbates any time-wasting that already occurs because of the weak communication structure.
The reality is that human beings are emotional creatures, and we need avenues to express ourselves in good times and bad.
Silent cultures end up making employees spend a significant amount of time complaining with others, doing unnecessary tasks, ruminating about their challenges, and decompressing their anger because they need to express and manage their frustrations.
A study conducted by David Maxfield from the Harvard Business Review found that 40% of the professionals he interviewed about cultures of silence admitted to wasting two or more weeks a year simply decompressing the emotional challenges they faced at their place of work.
Maxfeild discovered that the affect silence cultures have on a company’s bottom line can be devastating, with 20% of respondents estimating the average cost of avoiding conflict at their work place to be more than $50,000.
Adding the cumulative affect of damaged employee relationships, poor engagement, missed deadlines, miscalculated budgets and a poor overall culture, the cost of silence can eat away at a the bottom line of a business and harm it's profitability.
Thankfully, nothing is constant and cultures of silence can be changed.
Navigating a business away from a culture of silence demands that the company’s leadership become models of the new culture they intend to instill. Entrepreneurs can do this by engaging their employees in meaningful dialogue without repercussions.
By encouraging a new world order of openness and transparency, employees can acquire the skill and willingness to share their opinions. Overtime, individuals will become more vocal and confident that sharing their opinion is not only welcomed, but valued by their colleagues and superiors.
To begin transforming your culture away from silence and for the better, consider applying these 4 strategies.
A. Invert Your Mindset
In a silence culture people decide whether or not to speak based on the risk associated with the act. To reverse this mindset, speak openly and comfortably about the crucial issues surrounding your business, thereby demonstrating that speaking your mind is not a real risk.
Overtime your company culture will encourage people to think about the risk of not speaking up rather than the risk of sharing their opinion.
B. Emotional Transformation
Transforming a company culture, at its core, is an emotionally demanding process. It forces stakeholders to rethink how they emotionally experience their professional environment and how they communicate their feelings with others.
To improve the emotional atmosphere of your business, encourage employees to reflect on how their emotions impact their work and colleagues before they communicate their sentiments with others.
Overtime, coworkers will stop perceiving their colleagues as sources of frustration and instead as decent, reasonable, rational people. With this newfound perspective, every part of your business will operate more efficiently and harmoniously.
C. Foster A Sense of Security
People who feel unsafe in a professional environment will act defensively, and typically keep to themselves rather than engage in conversation and collaboration.
Establishing a safe workplace demands that entrepreneurs assure everyone in their company that the right intentions are in place and that the input of every individual is respected.
Employees who feel respected, will act with confidence and express a willingness to be highly engaged in all company matters. The result will be resilient employees who will listen and provide counsel even when the conversation is about a in high-stakes or unpleasant issue.
D. Encourage Dialogue
When a safe work environment is established, it is then essential that entrepreneurs actively invite dialogue so that employees can express their concerns, and their ideas about how to solve them.
Disagreements should encouraged, as long as the motive is positive and the objective mutually understood. Entrepreneurs should encourage their colleagues to approach difficult and conversations and their corresponding challenges as learning opportunities to grow both as individuals and as a group.
By following these fundamental strategies, entrepreneurs can lay the foundation of a culture where open dialogue is encouraged and group efforts to improve the business encouraged.
The result will be a culture that nurtures a more positive workplace that is actively committed to confronting challenges head on. With a more open and honest culture, solutions are quickly discovered through meaningful collaboration and rigorous testing. Disagreements are easily resolved and agreement established in areas where it may be lacking.
A culture that encourages dialogue will produce happier employees who work harder, more efficiently, and with greater passion, all of which together, positively impacts your company’s economic performance.
The harsh reality is that transforming a company culture is a monumental task, with the overwhelming majority of attempted transitions ending in failure.
Business leaders typically fall short of enacting meaningful change because they focus too much on defining the ways in which the company can and will change, rather than on how they themselves can and probably should change.
Too much time and resources is spent on constructing the perfect change strategy, and not on how a company's leadership can evolve to more effectively lead the enterprise.
The principle is simple; to effectively produce change around you, you must first change yourself.
Many leaders would not disagree with that principle, however when it comes to enacting change they expect their cultural transformation to happen in an unrealistic timeframe and with a minimal effort.
Unfortunately, too many leaders believe that enacting change demands that everyone around them change and not themselves. Unable to practice self-awareness, entrepreneurs fail to recognize their own dysfunctional behaviors that damage their company culture.
Without self-awareness, decision making, coordination, collaboration and conflict management are simply ineffective. Self-awareness is critical in periods of change because the emotions of every involved stakeholder becomes heighten, which can exert significant pressure on the stability and strategy of company's leadership.
Common feelings including; loss of control and power, fear of failure, indecisiveness, and incompetence often emerge during times of crisis and change, and the way leaders respond to these emotions matters.
Entrepreneurs should quickly recognize and avoid any behavior that reveals their own struggle to adapt to the same change they are attempting to champion.
An unintended consequence of enacting cultural change is the emergence of an underlying assumption among entrepreneurs that if they are wrong, the failure is all on them. This disproportionate fear of accountability ends up overwhelming leaders, effectively preventing them from making the right decisions based on balanced reasoning and/or consultation with colleagues and experts.
It is for this reason that entrepreneurs must begin by changing themselves and their approach to their work, before attempting to enact significant cultural change on their business.
To facilitate your change efforts, consider the following 2 insights:
A. Self Awareness
A behavior common among leaders, and which damages any cultural transformation, is becoming locked in a cycle of transference where emotions are transferred to other people. A leader who is stuck in cycles of transference exhibits behaviors that are shaped more by their past experiences than what is occurring to them in the present.
For instance, an entrepreneur who has deep seeded issues with their confidence will naturally resist questions about the change strategy they are implementing. This behavior encourages an atmosphere of resistance and passive-aggression that produces a culture of silence rather than a culture of transparency.
Upon closer examination, the same leader with confidence issues reveals a long history of unjustly being required to prove their ability. Receiving unfair criticism on a routine basis, this leader is often left questioning his/her purpose and the quality of their work. The result is a profound feeling of inadequacy that is then transferred to the people around them.
Every time this leader is questioned, it triggers a transference of past behaviors that are compounded by the anxiety of leading a dramatic transformation of their company's culture.
Instead, a leader who is self-aware and willing to change their mindset will naturally avoid behaving in a way that works against the culture they are implementing. When questioned, they will treat the employee's engagement as an opportunity to enhance their commitment to the company's mission of change, rather than as a personal attack.
Achieving this requires significant self-reflection and brutal honest to reveal exactly what your triggers are.
The second component to ensure that personal change is positively enacted, is to uncover the narrative behind the trigger points which affect a leader’s professional interactions.
Many entrepreneurs are able to identify the trigger points that produce their harmful behavior, but they fail to uncover the underlying narrative behind their pressure points.
Uncovering the narrative is important because it produces an acute personal understanding of an individual's character that encourages a level of self-awareness capable of revealing the “why” behind specific actions and/or beliefs.
Recognizing bad habits is not true self-awareness. It is simply identifying the existence of a problem.
True self-awareness demands looking deeper within the self to discover the root causes of specific behaviors. This introspection is fundamentally necessary to discover the measures that can meaningfully change and rectify a person's behavior for the better.
A practical approach is to simply write down the narrative on paper as you think it through. This approach can provide a sobering perspective of the forces the drive personal behavior.
To do it right, entrepreneurs need to practice humility and recognize patterns in their behavior, particularly during times of significant change and strife.
By practicing self-awareness and closely examining the underlying characteristics and causes of your actions, entrepreneurs can meaningfully change their behaviors for their own personal benefit, and for the benefit of their company.
A leader’s ability to affect change across their business depends on their ability and willingness to change themselves. Accepting this reality will fundamentally shift how an entrepreneur leads his/her enterprise.
Attempting to enact change without personally evolving will leave entrepreneurs frustrated, and produce a team that questions the motives and strategy of it's leader. This doubt will damage the commitment of the group, and their belief that the desired cultural change will positively impact their professional experience, and the bottom line of the company.
Moreover, changing yourself is an effective method of leading by example. If appropriately achieved the effort can encourage the same kind of positive introspection among colleagues.
Such a result will produce more self-aware employees who are willing to make personal changes and sacrifices for the betterment of the group and company.
The great benefit entrepreneurs should keep in mind when attempting to lead a cultural transformation is that the practice will illuminate many systemic problems of the business that need addressing.
It is the responsibility of a company's leadership to examine and listen to how the effects of change are unravelling across their business. Perhaps more than anything, it is important to recognize that enacting change is a process that takes time, effort, and dedication.
There will be moments of crisis that call into question the entire effort, but entrepreneurs should remain steadfast and confident in their long-term vision. Whether the aim is to to improve your distinct company culture, or implement a culture of transparency, or transition away from a culture of silence the challenge of enacting change must be properly respected.
Wherever and whenever possible, leaders should take note of how the cultural change unfolds, the impact it has on different people, the trends it develops, and whether or not it is following the right course. Seek the feedback of your peers for confirmation and observe how employee habits and patterns evolve over time to make sure that actions match intentions.
An entrepreneur is the steward of his/her company. Enacting cultural change is in many ways a journey into the unknown that demands introspection from all the involved stakeholders, which in and of itself is a distinct and challenging process.
The more informed a leader is the better positioned they will be to effectively manage cultural changes, react to possible obstacles, and guide their team towards actualizing a better version of themselves and the company.
To succeed against the odds every stakeholder must believe that they can individually and collectively do better and be better for their own sake, and for the sake of the group.
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