By Mattson Newell, senior partner, Partners in Leadership (@MattsonNewell)
Innovation booms during times of crisis. The pandemic has shifted the way we work, woken many from the inertia of bad work habits and ineffective systems, and created space for new, revolutionary industries and trends. It's not surprising that the U.S. had a record number of business applications in Q2 of 2020, with 883,174.
Whether you're a new or seasoned business owner experiencing success in 2020, it's never too early to begin thinking about how to scale your business to be profitable for years to come.
Discussions at this stage of a company's maturity often focus on how to scale processes, operations, sales, and people. Often, however, leaders forget to discuss one question that is at the core of successful growth: How do we scale our culture?
Culture impacts results. We know results are top of mind for every leader, and there are plenty of strategies designed every day to answer how to achieve, measure, and grow results. How to scale culture still defies many leaders struggling to build a sustainable culture.
Former Starbucks CEO Howard Schultz CEO has said:
The only competitive advantage we have is the culture and values of the company. Anyone can open up a coffee store. We have no technology; we have no patent. All we have is the relationship around the values of the company and what we bring to the customer every day. And we all have to own it.
How do you scale your competitive advantage? How do you scale your culture? Here are three strategies:
1: Define It
To lead culture, we first have to define it.
There are many definitions out there today of what culture is and what it isn't. Some are very complex. Partners in Leadership prefers to keep it simple and defines it as, "Culture is how people think and act in an organization."
The results you are achieving today, you are perfectly aligned to achieve: Your people are thinking and acting in a manner necessary to achieve those results. To shift results, you can't just send out an email blast or add in an extra vacation day. You need to go deeper, to the way people are thinking and acting. You then need to create new, better, different experiences that cause them to think and act differently to achieve new and better results.
Defining your culture is all about outlining what makes your organization unique. Netflix has defined nine cultural values, including honesty, communication, and courage. Amazon values include customer obsession and innovation. Ikea's includes cost-conscious.
What are your company's Cultural Beliefs and how do you live them every day? What are the Cultural Beliefs you need in place to become the organization you want to become? Define your culture, name it, and keep it top of mind in all that you do, because if you get it right, as Schultz shared, it becomes your competitive advantage.
2: Integrate It
Once defined, you need to integrate the culture into everything you do.
Many are familiar with the book Atomic Habits, which is focused on how you can establish powerful Atomic Habits in your personal life that will have a positive, cascading effect to other areas of your life. This is a good way to approach culture management, too.
Begin with firsthand experiences people are having. Overwhelm people with experiences that support the Cultural Beliefs, including in their team meetings, on written agendas, in the feedback you provide during their one-on-ones, and everywhere else.
If one of our Cultural Beliefs is to Courageously Collaborate but we continue to make decisions in isolation and limited to our direct team, it creates experiences counter to the beliefs we have established and needs to be adjusted. The more experiences we can create for one another aligned with our culture, the better.
Second, the stories we tell have a lasting impact. Stories are how we learn, how we process things, and how we share with others. To create more stories, create more experiences, and watch the stories go viral.
We have all heard those stories that run counter to the culture, about this leader, about that team, or maybe even about ourselves. To scale our culture, we need to ensure that the stories being told are the right stories aligned with our needed culture.
Finally, focus on the policies and procedures in our control. The systems of the organization either support the culture or run against it. These can include, but are not limited to, how we incentivize, promote, hire, fire, and communicate.
Once our culture is defined, it is key to integrate it into everything we are doing in the organization, including the experiences we are creating, the stories we are telling, and the policies and procedures we have in place.
3: Hire for It
Who you hire has a great impact on the performance of your company. It also has a great impact on the culture of your organization, as your culture is made up of the people who are a part of it.
A recent Harvard Business Review study found that as much as 80 percent of employee turnover is due to bad hiring decisions. So 80 percent of your new employees are already out the door because you did not make the right hiring decision from the outset. Further, according to a study by the Society for Human Resources Management (SHRM), it could cost up to five times a bad hire's annual salary to replace them.
The formula for getting a hire right is simple. Not easy, but simple, and dependent upon you having defined your culture. The formula is:
A Good Hire = Skill + Will + Cultural Fit
Many organizations we work with will take their defined culture and put those attributes in the job description, and then they use them in the interview process as well, asking how well candidates demonstrate the qualities of those cultural pillars.
For example, one organization we worked with started as a smaller, 50-person organization and has now grown to over 500 employees in 2.5 years. One of their Cultural Beliefs is to Speak Up, so they have created a culture where it is important to speak up, share ideas, share feedback, and communicate openly.
In the interview process, they are specifically asking questions of the candidates that demonstrate their willingness and ability to Speak Up, and ensure they would fit in with their culture.
When scaling a business, make sure you don't neglect the need to also scale and grow your culture. If you don't manage your culture, it will manage you! These three strategies will help you and your organization successfully scale and grow your business, your culture, and your results.