Company culture is everything; it’s the foundation of your business. But consider this: company culture is also the source of customer loyalty and purchase orders.

Simply stated, cultural challenges often result in stagnation of revenue growth. And it’s just not about price. Culture is an indicator of internal health; externally it influences customer trust, respect, and loyalty.

What exactly is culture?

“Culture is the foundation of the enterprise. Culture is the shared values and behaviors of its management and employees. Culture establishes perception, expectations, accountability, and performance. Culture is transparent to employees, customers, industry, and community.”

In this blog we’ll talk about how culture can affect nearly every aspect of your business – from customer perception & employee retention, to innovation & your bottom line. We’ll introduce tips for business strategies to ensure that company culture stays positive, effective, and in-line as a competitive business in your industry.

Culture and Revenue Growth

Developing new revenue growth year after year is one of the greatest challenges of any business. Companies faced with revenue challenges usually solve symptoms first and the source after trial and error.

Consider this statement: Company culture is the primary contributor to positive revenue growth.

Perhaps you might recognize several of these scenario examples in your own organization.

Training. Some form of sales training occurs with new ideas and processes. Lots of enthusiasm and token commitment at the beginning, but accountability is inconsistent. After a period of time the company reverts back to its original course.
After a short burst, sales revenue remains stagnant.

Technology. Companies install technology as a fix-all solution. The objective for the upgrade is accountability, efficiency, organization, and increased communication. This is usually a large capital expenditure that solves part of a symptom. Lots of information is collected, but to what end?
The company gains a greater knowledge of metrics, but in the long term result, sales revenue remains stagnant.

Pricing/ Quality. The company offers great quality and excellent service but is not always price-competitive in the field. The enterprise begins to decrease prices along with margin. Quality and service is later reduced to reflect lower margins. The company slowly transforms into a commodity-driven enterprise.
The long term result, profitable sales revenue remains stagnant.

Do any of these challenges and solutions resonate with your enterprise?

Shared Values Paradox

Again, what exactly is culture? It’s the shared values and behaviors of company management and employees. Culture establishes perception, expectations, accountability, and performance.

The concept of “shared values” poses the greatest paradox for management. Not all managers and employees share the same core values and behaviors as the owner and senior executives possess. For example, price is often not the real culprit in customer attrition, rather, it’s business practices.

Customers do not always receive what senior management believes they do. When companies violate customer trust through poor business practices, they eventually go somewhere else.

Tip: Assess your company culture. Survey feedback from your own employees internally or by bringing in an outside, unbiased source.

Customer Collaboration

The quality of company culture influences customer collaboration. Enterprises with superior cultures generally achieve greater customer collaboration. This level of collaboration is an invitation for innovation.

Weak cultures create an environment where customer attrition begins to equal customer retention. The enterprise is losing customers at the same rate as they acquire them. Customer trust and respect leads to competitive advantage not based on price, but rather the combination of service, business practices, quality, and innovation.

Tip: Assess your customers and vendors. Survey feedback both from customers and vendors internally or by bringing in an outside, unbiased source.

Accountability

Equal employee accountability is one of the greatest contributors to positive culture. How effectively managers communicate and enforce equal accountability among all employees sets the stage for positive cultures.

Production, supply chain, operations, administration, IT, sales, and marketing departments are all part of the cultural exchange. Why? Because every employee either directly or indirectly contributes to culture.

Tip: Quality employees want to know exactly what is expected. Establish job descriptions and performance reviews for every position. Hold management accountable for employee success.

Perception

Perception is contagious, transparent, and real. Internally it has a life of its own for enterprises. Employee’s feeling positive about the company better achieve their job description. Conversely, negative perception contributes to performance challenges.

Even the most qualified sales employee has difficulty overcoming poor company perception. How does one penetrate existing customers with innovation when the customer no longer has trust? How does one solicit new customers with a poor company reputation?

Tip: Examine the metrics of both new customer acquisition and retention. Determine why past customers have chosen to take their business elsewhere.

Intellectual Talent

Attracting and retaining intellectual talent is a real challenge in today’s environment. Today’s employment rates mean quality employees have more career opportunities from competitors; you must make your organization appeal more to those who you want to hire.

Culture has a dramatic effect on the company’s ability to attract new employees. In today’s interconnected world, a quick Google search can pop up results on your company culture from Glassdoor and other user-supported rating tools. If they read reviews of your organization’s culture not in line with a positive, innovative environment, you’re more likely to lose them as a potential employee.

When team, job security, and compensation are not correctly aligned, why would quality applicants want to be part of the organization?

Tip: How many quality candidate resumes are on your desk? Is your company attracting the best talent? Develop a candidate assessment and selection program internally or by bringing in an unbiased source to help guide the process.

Critical Thinking

Smart managers recruit critical thinkers because they consistently make quality decisions. This applies not just to management, but every employee. The more quality managers and employees a company retains, the greater its capacity. Leaner and flatter enterprises encourage greater customer collaboration and innovation. It doesn’t matter what the job is, it’s essential the right person is fulfilling the job description.

Culture shapes the decision making process. Positive cultures promote entrepreneurship and free thinking. Today’s quality employees simply expect this. Plus, it’s a catalyst for innovation.

Tip: Is the enterprise constantly in fire fighting mode? Management development encourages accountability and communication. Develop a management program internally or by bringing in an outside, unbiased source to help guide and mentor the process. By doing so, you can teach your managers to extinguish the fire.

Performance Environment

The vast majority of employees arriving at work want to be challenged and contribute to the company’s success. Quality cultures establish a high performance environment. Commitment, achievement, and positive communication are influenced by culture. Positive culture results in greater performance in most cases.

Toxic contributors to culture, either in management or employees, should be re-developed or career adjusted. The fact is every department manager has a sub-culture operating as part of the company culture. Every one of these departments in a direct or indirect way, influence customer perception.

Tip: Establish performance standards for every job description. Establish equal accountability for all departments. This can be decided upon internally by management personnel or by bringing in an outside, unbiased source to train and mentor management in best practices.

Company Course

Your company probably has a vision, mission, and core values statement. The key is that it is more than a wall ornament or a section in the employee handbook. Properly written, it keeps the company on course. When the company, managers, or employees do not adhere to the expectations, culture becomes vulnerable.

Customer trust and loyalty are built on service, quality, and a fair price. Employee trust and loyalty is built on team, job security, fair compensation and benefits. When the company departs from its course, these values sometimes become disposable.

Tip: Examine your value statements for best practices and quality. Is the enterprise really customer centric and innovative? Develop value statements internally with a focus group or by bringing in an outside, unbiased analysis provider.

Final Thoughts

You may have noticed that in each of our tips, there are two overarching approaches to solve each need. One includes handling things internally – with focus groups or by management actions. The other approach recommends bringing in an unbiased, outside source for knowledge transfer or analysis. Both have their merits.

You know your business. Consider whether you need to redirect your efforts to a new approach, or if what you’re doing now is bringing you success and staying true to your company culture.

Tacticware Resource Group LLC

Tacticware Resource Group provides consulting, training, and mentoring in management, HR, operations, and sales. Reach out to us for resources to grow your enterprise.

1 comment. Leave new

Nice Job Paul. Didn’t think you could find an umbrella under which all your services fit, but you did it, and effectively. I want to hire you.

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