Your company worth is driven by your organization culture, focus on it
When selling your business one day, you’ll want to present an organization that excites the acquirer. You’ll want them to see that they can assimilate all or some aspects of your team and culture into theirs and in so doing, it will strengthen their business. Use time as a friend to build such an organization.
Your company today and in the future will be the intersection of two things. First, how good your team is at coming up with ideas and plans for enabling your business growth. Second, how good your team is at implementing those ideas. Where these two intersect says a lot about your culture. What we find most often in working with company owners and CEOs is that their culture is frustrating them.
There are five primary reasons that we find owners and CEOs are frustrated with their organization culture. Here are the reasons:
- Leadership isn’t articulating the ideas or plans clearly enough. Ideas for growth or improvement are being communicated to some or all team members but not in a way that they truly understand or embrace. This frustrates leadership because ideas don’t get well executed and it frustrates employees because they hear ideas but execution steps are confusing.
- Improvement step: next time an idea or plan is articulated, ask the employee(s) to play back what they just heard and allow them an opportunity to ask clarifying questions.
- The ideas or plans aren’t being linked to an articulation of a deliverable or what good looks like once the idea or plan is implemented. The idea or plan might be clearly articulated but if it doesn’t include a target or a description of what good looks like when it’s implemented, this will lead to confusion and frustration because how you view a successful outcome and how they do might differ. It can also lead to scope creep which is a great source of frustration for all.
- Improvement step: With the next idea or plan that is communicated, specifically address how it will be measured for successful completion and allow people to ask clarifying questions.
- There may be a set deliverable for the idea or plan but employees don’t understand how the deliverable will be measured and/or don’t agree with the measurement. Strong leaders ensure that their team understands the deliverable and has a chance to discuss it to uncover if there are issues keeping them from embracing it.
- Improvement step: consider where you have employees with ownership or involvement in driving to a deliverable or a KPI. Ask them if they understand the calculation and if they believe the calculation is effectively capturing the result.
- Companies allowing there to be inconsistent accountability around the company for people’s performance. This will be a great source of cultural frustration. Some employees will feel they are held to a different performance standard and that under performers are not addressed. This will lead to your star performers max’ing out what they give you because they see you accepting under performers. Address the under performers and you’ll be surprised to see your star performers raising their bar further for you.
- Improvement step: ask yourself, do me and my key managers define performance and accountability the same? Do we have some managers holding their teams to one standard of performance and other managers adopting a different standard?
- Lastly, leadership is the only one coming up with ideas and plans so this frustrates both leadership and the employees. Leadership wonders why ideas don’t flow upward and employees wonder why ideas only flow downward.
- Improvement step: ask yourself, do I or do my key leaders encourage all team members to come forth with ideas for improvement and growth so that employees know we want to regularly hear their ideas or do we make this uncomfortable for them? What can we start doing to convey to all employees their ideas do have merit and we will have a process for considering them?
Our job as owners and CEOs is to build and protect our organization culture. Do an honest assessment in considering these causes of frustration. Investing in your culture today will pay you great dividends both in how your team performs today but how it can also enable your future euphoric exit event.
