Diagnosing a Bad Business Culture
“Business cultures eat business strategies for breakfast!” I heard this quote from a business consultant during a recent meeting. So often, organizations will adopt a new strategy only to quickly abandon it if goals aren’t met. The truth of the situation is that the strategy wasn’t properly executed because it conflicted with the business culture. When this happens, management becomes so uncomfortable that they soon distrust the strategy and finally decide to terminate its use.
Bad business cultures can be devastating within an organization, yet this subject is seldom considered when new strategies don’t work. But what are the signs of a bad business culture? How can it be turned around? And what can a company do to ensure the business culture doesn’t stand in the way of progress?
Watch for signs of an inflexible culture
Business culture is a set of collective beliefs and values that reinforce a given set of attitudes and behaviors within the team of people making up an organization. The more people on the team, and the older the organization, the thicker and more permanent that business culture becomes. This makes it more difficult for an organization to modify the business’ direction.
Signs of an inflexible business culture:
- Inability to change
- Inability to keep good employees
- Inability to sustain market leadership
- Inability to develop new and improved products and services
- Inability to best manage expenses and profits
- Inability to sustain the trust and loyalty of customers
- Inability to establish and maintain a positive work environment.
Define the company’s code of values
Vision and mission statements are critical and define the purpose of any organization. However, a code of values is even more important when it comes to a business culture. A code of values becomes the regulatory language of how an organization functions. Nothing that goes on within the organization can violate the code of values. Typically, I recommend organizations develop between seven and 12 values statements. Some themes that effective organizations consider in establishing each value are honesty, communications, growth, change, respect, integrity, quality, service, relationships and customers, among others.
Diversify the workforce and leadership
“Birds of a feather stick together.” This is often true in business. Believe it or not, people are primarily considered promotable because they are “liked” by the boss. And, to be liked often means to operate within the same behavioral patterns as the boss. As a result, companies over time will unintentionally build a team of employees that operate similarly.
There are four primary categories of behavioral types: “drivers,” “analyticals,” “expressives” and “amiables.” A business culture of only analyticals results in slow progress, causing an organization to get left behind; one of only drivers would be forceful and reckless causing too many mistakes; only expressives would be too impractical; and only amiables would never get anything done. Seeking and maintaining behavior-style diversification is a great way to prevent problems within a business culture.
Complete a SWOT analysis
The final step in ensuring a good business culture is to know who you are and manage accordingly. I recommend companies assess themselves and their culture regularly through a SWOT analysis—an investigation of strengths, weaknesses, opportunities and threats. If a company is losing good people or not progressing well in meeting goals, management should look at the organization internally and define the strengths, weaknesses, opportunities and threats and adjust where necessary.
Drawing the code of values into a SWOT assessment is valuable. Note that strengths must be maintained; weaknesses require training and accountability; opportunities require more attention and investment; and threats need to be minimized or eliminated.