Culture in Companies and Business Success

In what’s becoming an annual event (okay, it was two years in a row), I attended a workshop titled “Values-based Leadership” lead by Richard Barrett. Despite the slow start, and initial misgivings when Richard quickly put on a video of his that’s available on YouTube (hey, I have come to hear you in person, was my first thought) – the day proved to be thought-provoking and productive, for two reasons. Firstly a full day away from the daily grind at the office, just thinking and discussing things from the sublime, (Who am I? What is my purpose in life?) to grimy reality (What is the culture in your company?) was a much-needed breath of fresh air. Secondly, the workshop turned out to be completely about culture, ways of measuring it and the role culture and values play in the business success of organizations. Many thoughts that had been stewing below the surface of my conscious mind or even the few that had cleared the surface and were still nebulous at best, began to get some definite shape and dare I say, validation through the course of the day.

Before I push ahead, it’s worth stepping back and trying to get a working definition of culture spelled out. Many serious thinkers have come up a variety of definitions – ranging from the anthropological all the way to organizational – I will confine myself to the rather simple assertion, that culture is how people in an organization behave and expect others to behave, on a daily basis. This behavior is almost always driven or at the very least most strongly influenced from the top, down. In other words, the leaders (in small enterprises these are almost always the founders) set the culture and the everyday actions of the people in the organization reinforce this culture. Here again, I use the term actions to include explicit inaction or lack of action as much as deliberate actions taken. For instance, not confronting (constructively or otherwise), or avoiding conflict is as much an element of organizational culture as an action such as yelling at your subordinates or sharing recognition and praise as well.

In the spirit of full disclosure, I should also state my position – that I believe that culture trumps all other considerations in building healthy, dynamic and long lasting successful organizations. Yes, all those things we learned in business school or at our fathers’ knees are still true – operational excellence, technology, and R&D, financial performance, killer products or services are all important for success but culture is critical to sustain and build upon the gains made. After six years of running a bootstrapped software company, from the giddy optimistic start, through axing one entire department and having those folks out-placed, asking the remaining team to take 10-15% pay cuts, even as we worked to deliver newer products, fend off competitors and keep those fickle customers who hadn’t yet gone out of business in the downturn or been gobbled up, to achieving market leadership in our niche and finally selling our own company, the number one insight I have gained is that culture is the critical ingredient for organization success.

In the coming weeks and months I hope to share some of the lessons I have learnt from my journey as an engineer, manager, CEO and general factotum (they are nearly the same thing, you sometimes have a little more freedom as a factotum) and in the bargain, I hope to learn as well. The journey continues!