company cultures

Company Cultures are the Root of All Profits

I study great workplaces. There are more of them than you might believe! It’s true most workplaces are not inspiring, engaging, fun, productive environments. Most company cultures are not healthy. Unhealthy company cultures negatively impact engagement, service, results and profits.

Conversely, great workplaces have extremely healthy cultures. Those company cultures are healthy because everyone – leaders and team members – make it a point to pay attention to the quality of their work environment and invest in making it healthy, daily.

Culture drives everything that happens in your organization, good or bad. As the founders of one company I’ve been studying, Conversion Rate Experts, say, “Culture is the root of all profits.”

How Company Cultures Flow

Here’s their thinking, inspired by a Joel Spolsky article. They want their company to be successful and profitable. To accomplish that, they must attract the right clients – then help those clients to be successful and profitable. To ensure client success, they must have the best programmers and the best processes and systems. The only way to guarantee the best programmers and the best systems, every day, is to create the best working conditions possible, every day.

The “flow” of their mindset is:

  • The best working conditions lead to
  • The best team members using the best systems and processes, which leads to
  • The right clients and profits for those clients, which leads to
  • Results and profits for their company

The founders believe that “best working conditions” encompass a variety of elements including compensation, the work environment, the company’s mission or purpose, the work itself and their culture. To me, all those factors reside in their chosen culture.

I really like the founders’ “flow.” In my work with senior leaders – of small businesses, of multi-nationals, and many in between – I coach them to create the best working conditions for their employees. That’s the only way to build a sustainable, powerful, positive, productive culture.

Organizational Constitution

company cultures

The problem is most leaders have never been asked to do that. Most don’t know how to do that. I direct leaders to be intentional about their desired culture through an organizational constitution. Their organizational constitution specifies their organization’s (or team’s or division’s) present day servant purpose (who do they serve, and to what end – besides making money?), values and behaviors, strategies, and goals.

The servant purpose element along with values and behaviors are the foundation of healthy working conditions. Those elements help ensure everyone knows how to treat others with respect, trust, and dignity in every interaction.

Knowing how to treat others kindly doesn’t mean players will actually treat others kindly. Aligning plans, decisions, and actions to the organizational constitution is where the real work begins. Announcing those desired pieces – purpose, values, etc., doesn’t make them real. Leaders living them, coaching them, celebrating alignment, and redirecting misalignment help create and maintain those “best working conditions” daily.

Evaluating Company Culture

How do you know if you’ve got a great culture built on the best working conditions? Ask employees, frequently. Conversion Rate Experts use TinyPulse, a weekly three-minute engagement assessment for all employees.

In addition, they asked employees to describe what their culture means to them. Their answers are inspiring. What would your employees say about your culture, today? Their answers might be less inspiring.

Building a great workplace takes time, energy, intention, and attention. Learn from this little software company: start with the best working conditions, and build from there.

 

 

S. Chris Edmonds is a sought-after speaker, author, and executive consultant who is the founder and CEO of The Purposeful Culture Group. After a 15-year executive career leading high performing teams, Chris began his consulting company in 1990. He has also served as a senior consultant with The Ken Blanchard Companies since 1995. Chris is one of Inc. Magazine’s 100 Great Leadership Speakers and was a featured presenter at SXSW 2015. Chris is the author of the Amazon best-seller The Culture Engine, the bestseller Leading At A Higher Level with Ken Blanchard, and five other books. Chris' blog, podcasts, research, and videos can be found at Driving Results Through Culture. Thousands of followers enjoy his daily quotes on organizational culture, servant leadership, and workplace inspiration on Twitter at @scedmonds.

  • Steve Simpson

    This follows the same concept as a 1994 Harvard Business Review article “Putting the Service Profit Chain to Work”. Great people deliver great service. Great service turn customers into loyal Clients. And Loyal Clients find ways to spend money with you. I have used this mantra with my org which has lead me to focus on the culture. It all runs true.

    • Thanks for your comments. These concepts have been around for centuries! The challenge is to shift these concepts from knowledge to action.

  • Yuvarajah

    Couldn’t agree more. Common sense. Don’t chase money; let money chase, as you work on the culture. Inspire people to give their best. I they can’t train or coach them. If still they can’t, move or let them go.

  • VirginiaEntrepreneur

    Great piece! I’d like to see more about the one culture factor people rarely talk about when defining or explaining “company culture.” That’s the company’s ideal client or customer. Before you can have a culture, you need a customer. If your ideal customer is, for instance, a part or full-time, baby-boomer RV’er, then hiring a millennial work force with no RV experience or exposure doesn’t make a lot of sense. When I was a customer service rep at Camping World in 2006, 80% of the people around me had never been inside an RV, let alone lived in one. Their attitude towards the customer was one of ignorance and disrespect. They didn’t care about the culture or history of RVing, let alone the products they sold. Because they complained about customers and were frustrated at not knowing how to relate, their negativity generated general dissatisfaction and apathy, which impacted the culture within the company. I know of one manager (mine at the time) who was recently fired for watching porn in his office! That went on with several of my co-workers too. Why? Because all the popcorn, the parties, the “team building” exercises that went on INSIDE the company to promote the corporate culture had nothing to do with changing the lack of connection with the customer.

    Define your customer. Define your ideal customer. Hire people who relate. Zappos hires, or used to, people who LOVE SHOES. They are a shoe focused culture, which naturally leads to a great customer service shoe focused culture. Hire people who love what you do, and they’ll inspire a great customer culture as well as a great company culture because they’re focused on something they LOVE. Nothing creates a better bond. The people at Airstream RV manufacturing love what they do because they’re RVers and campers. The legend and history of what they do (make Airstreams) is in their blood. It’s more than a job, it’s a culture. You can’t create a great company culture when employees don’t love and rally around the company mission and customers.

    • Totally agree! Identifying and nurturing relationships with one’s company’s ideal customer is hugely important. :)

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