BY DOUG AND POLLY WHITE Special reporters
QUESTION: I own a small business. I want to build a positive culture. I think it’s essential for long -term success, but I’m not sure how to do it. Honestly, I’m not sure how that translates to culture. Can you help
ANSWER: Supreme Court Justice Potter Stewart famously said about pornography, “It’s hard to explain, but I knew when I saw it.” In the same way, a good corporate culture can be hard to define, but you know it when you see it. If you walk into the halls of a company with a good culture, you know it. Sure if you work there, you know it.
Defining corporate culture can be challenging, but we’ve used a simple definition for many years, “Culture is how you do things.” It seems simple. It’s also complicated. How do you decide how to get things done? One thing is for sure, it will start high. It also started in the beginning. The culture of a company is not something that is built after “growth.” Culture was formed from day one.
The first step in developing a culture is to seek what you want. Do you want a company where diligence is the norm or your focus is on work/life balance? Take some time to determine what you want in your values. Your company will develop a culture, explicitly or explicitly. Obviously decide what you want and take deliberate steps to achieve it.
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You can create the culture of your company. Your decisions, your reactions, the things you admire, the things you reward and the behavior you discourage will determine the culture of your company. For example, if you want hard work to be part of your culture, you need to show it through your own work. Starting your days between 9:30 and 10:00 and leaving each day at 4:30 will not end it. You also have to expect and ask for hard work from your people. You want to compliment your people when they go up and forward and call the carpet lazy.
Corporate culture is often passed from the experienced employee to the new hire in the form of stories. Your actions will determine the stories your company tells. At McKinsey & Company, one of the world’s leading management-consulting firms, new colleagues are told the stories of Marvin Bower, the company’s patriarch, who turned down profitable business because he didn’t think the clients implement the recommendations. Marvin doesn’t want to accept payment when he doesn’t think it will benefit the client — he thinks it is necessary to put the client’s interests before the company’s interests. This story takes place in the 1930s, a time when the new company could not afford to move away from profits. It was still told 60 years later, and we suspect it is still told today.
Thomas Watson, the founder of IBM wanted to create a culture that included failure and making mistakes. He was quoted as saying, “The way to succeed is to double your error rate.” Even when Thomas Watson died in 1956, his legend of accepting failure and mistakes continued. You’ve probably heard the story of an IBM employee in 1940 who made a mistake that cost the company about a million dollars. A million dollars is a lot of money now. It was even more so in the 1940s. Knowing he was about to be fired, the employee typed his resignation letter, and handed it to Watson. Watson replied: “Are you on fire? I just invested a million dollars in your education, and do you think I’ll fire you?”
Capital One values analytic accuracy. There were many stories in the early days when Rich Fairbank and Nigel Morris (the CEO and COO) met with business analysts to make sure the analysis was accurate and to cut down on the details of credit card offerings.
Stories are a powerful way to communicate how things work — the culture of the area. Sometimes leaders seek to strengthen the culture by writing stories. Marvin Bower published the book titled Perspective on McKinsey. It is given to every new partner, but never given outside the company.
Bill Marriott wrote, The Spirit to Serve, Marriott’s Way and put it on the bedside table in every Marriott hotel. None of these authors are trying to monetize their book. They reinforce the culture of a company they love.
With so many employees working remotely, it’s even harder to build the culture you want. This is a problem that has yet to be resolved, but owners need to take steps to ensure new employees hear the stories they may have heard around the watercooler. Alternatively, we can conclude that culture is less important in a world where workers do not interact with each other. Time will tell.
Yet you define the culture and whatever else it is communicated; historically, there has been very little in business that has been more important than the culture of your company. We may already be on the edge of a world where culture is less important, but we are not like that.
Doug and Polly White have a large stake in owning Gather, a company that designs, builds and operates workspaces that work together. Polly’s focus is more on human resources, people management and the human system. Doug’s areas of expertise are business strategy, operations and finance.