By Mattson Newell, Senior Partner, Partner in Leadership (@MattsonNewell)
Innovation booms in times of crisis. The pandemic has changed the way we work, awakening many from the inertia of bad work habits and ineffective systems, and creating space for new, revolutionary industries and trends. Unsurprisingly, the U.S. had a record number of business applications in Q2 2020 at 883,174.
Whether you are a new or seasoned business owner who succeeded in 2020, it is never too early to start thinking about how you can scale your business to be profitable for years to come.
Discussions at this stage of business maturity often focus on scaling processes, operations, sales, and people. However, leaders often forget to discuss a question that is at the core of successful growth: How do we scale our culture?
Culture influences results. We know that results are of paramount importance to any leader, and there are numerous strategies in place every day to answer how results can be achieved, measured and increased. How to scale culture still defies many leaders struggling to build a sustainable culture.
Howard Schultz, CEO of Starbucks, said:
“The only competitive advantage we have is the company’s culture and values. Anyone can open a café. We don’t have technology, we don’t have a patent. We just have the relationship with the company’s values 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 3 strategies:
1: define it
In order to manage culture, we must first define it.
There are many definitions around culture these days and what it is and what is not. 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 getting today are perfectly aligned: your people think and act in the ways that are necessary to achieve those results. To postpone the results, you can’t just send an email or add an extra day of vacation. You need to go deeper into the way people think and act. They then need to create new, better, different experiences that lead them to think and act differently for new and better results.
Defining your culture is about figuring out what makes your organization unique. Netflix has defined 9 cultural values such as 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 cultural beliefs do you need to become the organization you want to be? Define, name your culture, and keep track of it in everything you do. If you get them right, as Schultz shared, it will become your competitive advantage.
2: incorporate it
Once defined, you need to incorporate the culture into everything you do.
Many are familiar with the book Atomic Habits, which is about how to establish powerful Atomic Habits in your personal life that have a positive impact on other areas of your life. This is also a great way to approach cultural management.
Start with firsthand experiences that people have. Overwhelm people with experiences that support the cultural beliefs, including their team meetings, written agendas, the feedback you give during their one-on-one meetings, and everywhere else.
When one of our cultural beliefs is to work bravely together, but we continue to make decisions in isolation and confined to our immediate team, experiences arise that contradict what we have established and need to be adjusted. The more experiences we can create for one another in accordance 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’ve all heard these counter-culture stories about this leader, about this team, or maybe even about us. In order to scale our culture, we need to make sure that the stories told are the right ones that are tailored to our needed culture.
Finally, focus on the policies and procedures that we control. The organization’s systems either support or run counter to culture. This may include, but is not limited to, how we incentivize, promote, hire, fire, promote, and communicate.
Once our culture is defined, it is important to incorporate it into everything we do in the organization, including the experiences we have, the stories we tell, and the policies and procedures we have put in place.
3: Rent for it
Who you hire has a huge impact on your company’s performance. This also has a huge impact on the culture of your organization as your culture is made up of the people who are part of the organization.
A recent Harvard Business Review study found that up to 80% of turnover is due to poor hiring decisions. 80% of your new hires are already out because you didn’t make the right hiring decision from the start. In addition, according to a study by the Society for Human Resources Management (SHRM), it could cost up to five times the annual salary of a poor attitude to replace it.
The formula for the right mindset is simple. Not easy, but easy and dependent on defining your culture. The formula is:
A good attitude = skill + will + cultural fit
Many organizations we work with take their defined culture and put these attributes in the job description. Then they also use them in the interview process and ask how well they demonstrate these cultural pillars.
For example, one organization we worked with started as a smaller organization with 50 employees and has grown to over 500 employees in 2.5 years. One of their cultural beliefs is to “speak” where they have created a culture where it is important to express yourself, share ideas, share feedback, and communicate openly.
In the interview process, they ask the candidates specific questions that demonstrate their willingness and ability to “speak up” and ensure that they fit into their culture.
As you scale a business, make sure you don’t neglect the need to scale and grow your culture as well. If you don’t manage your culture, it will manage you! These three strategies will help you and your company to successfully scale and grow your company, your culture and your results.
The opinions expressed by Inc.com columnists here are their own, not those of Inc.com.
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