MUST READ! The Importance of a Winning Culture—and How to Create One

January 8th, 2014
Written by: TPO

A version of this article was originally prepared by TPO for one of its clients, an industry educational foundation.

Culture is one of those topics that is easy to be baffled by, to put into the “nice to have” column. That’s understandable, as long as you subscribe to the notion of culture as “soft” and therefore relevant only when it happens to come up in conversation, but absent any real connection to the bottom line.

The urgency in the headline of this article is intentional. You must pay attention to culture. It is far from soft and is essential to your company performance – no matter how big or small the size of your company.

Let’s start by establishing a definition of culture. Maybe one of the reasons that culture is so mystifying is because of the hundreds of meanings and definitions attached to it. In a recent article in the small business section of the New York Times, culture was defined simply as “what you value, what is important for you and your company.”

The shape of your culture must start with you as the business owner and govern the way you think, act, and feel – your unique culture spreads to your employees and becomes your company’s learned and shared set of behaviors, standards, and norms.

Components that Shape a Company’s Culture

Components	Example(s)
Mission/Vision Statement – simple turns of phrase provide a purpose	To be the most honest and ethical trade partner of choice To employ value engineering, effective construction practices and hard work to deliver our products and services
Values – the core of a culture	Teaming: we assemble the right experience and apply it with dedicated enthusiasm Integrity: we embrace the highest standards of fairness and ethical behavior Leadership: we are diligent leaders who encourage people to reach their potential Commitment: we deliver projects on time, within budget, and to the quality specified Excellence: we review and improve our people and processes Responsibility: we are fully accountable to others for our actions
Practices – the stuff that brings your values to life	Organization structure: flat or hierarchical Performance management feedback system: seldom or frequent Teams involvement in decisions: lots or little Customer feedback loop: open or closed Space: creation of formal or informal interactions
Symbols – things that can be identified with	Admired former employees can become cultural symbols by giving awards named after the individuals, complete with ritual ceremonies
Rituals – events that reinforce	Professional training days Casual Fridays Anniversary celebrations

Why Culture is Important

The shape your culture takes will play an important role in how well your business does. It is a key factor in sustainable profitability and long-term performance for successful businesses. Companies with winning cultures:

Execute better – on their business strategies and priorities.
Maintain a healthy external focus – on customers and competitors rather than internal politics or turfs.
Have employees who think and act like owners – they take responsibility for overall business performance, not just their own.
Exhibit a bias for action and results – there is little patience for bureaucratic debate.
Attract winners – cultivate them too!

Why Culture is Urgent

In the absence of shaping a culture, it will get shaped for you. If you are lucky, you are surrounded by the highest of performers and/or teams that think and act just like you need them too – they figure out how to do that through osmosis!

Most of us are not so lucky. Winning cultures don’t just happen, not even in small or family owned businesses. Cultures that create themselves are almost always counterproductive to what is needed to drive company success.

Think about culture as a process of “sense making” in your company, as the carrier of the meaning of the “what” and the “why.” Without a way to make sense of behaviors, norms, and values, your people will make their own interpretations and assumptions. What if their thinking is wrong? What happens when your culture starts to subversively work against you in the background, foiling your best efforts and plans? Culture is urgent – below are some strategies for creating a winning one.

How to Create a Winning Culture

Define your distinctive personality
- What values are so important that you will fail with out then?
- What will hold your company together through the thick and thin?
Communicate your values repetitively:
- Say them over and over again with gusto!
- Ask yourself and others – “How can I/you embody our values?”
Integrate your values into everything you do
- Your actions will speak louder than you words. If you say that you value transparency, yet do not deliver it – you will break your peoples trust.
Define expectations of high performance
- Clarify goals and accountabilities.
- Add performance metrics and incentives.
Hire smart
- Be fanatical in the recruiting process about finding not just the most talented, but those best suited to your culture.
- People stick with cultures they like and bringing aboard “culture carriers” reinforces the culture you are trying to build.
Purge smart
- Are there people in your company that don’t fit with the culture you are trying to build – worse yet, are they undermining it? Work to address these cases through performance improvement planning. If you don’t, you will risk impacting employee morale.
Reward your best
- Employ value based incentives – the best predictor of what people will do is in fact what they are incented to do.

As hard as it is to create a winning culture, don’t put it on the back burner. Research abounds that supports culture as a source of profitability and competitive advantage. Culture can also be a source of mediocrity when its importance is underestimated.