Thinking Managers

Robert Heller of suggests that business culture, properly defined and developed, is the basis for achieving outstanding success.

The Culture Of Business

In its true meaning, culture can be defined as ‘the way we do things round here’, or behaviour. In its false meaning, it is much vaguer and refers to the general philosophy which animates the company. It presents an ideal and an aim of generating a new and ‘better’ culture that will see lower employees behave in ways that the upper ones prefer.

If you get the behaviour right first, the results can be spectacular. Take the American steel company Nucor, which has built its culture round the motivation of the individual. Nucor's shareholders have earned returns of 387% over the last five years.

Business Week reports that the driving cultural idea is to lead the employees to adopt ‘the mind-set of owner-operators’.

But culture, by its very essence, differs from one company to another. For instance, the owner operator mind-set would not apply to Cambridge Design Partnership, which employs only 25 people, mostly top-notch engineers, and which is insistent on the importance of its culture in attracting and retaining customers for contract research.

I came into contact with CDP on a field trip for the East of England Development Association. I was examining the various approaches to New Product Development at three diverse companies.

I discovered that a key factor held in common was a well-developed understanding of the firm’s culture and its role in corporate life.

Similar to CDP, which doesn't have a failed project to its name, Voca has completed 50 billion financial transactions without error.

Meanwhile, the Lotus Group has a similar contract research drive to CDP and has a deeply vested interest in raising the state-of-the-art in the auto components that it supplies to OEM customers and uses in its own sports cars.

At this triumvirate - and at Nucor - an evident and powerful sense of purpose is reflected in the culture.

The true and the false definitions of culture are linked, in that if you change the culture from the status quo, say, from lack of purpose to purposive, then you change the ‘way we do things round here’.

Top managers think that onus for running the culture is on them. If they don't like some aspect of the business, they will employ some new method that will have the desired effect. In other words, it's a top-down culture. But any decent consultant or guru will point out that people cooperate best when executing policies devised with their input.

An exception is apparent, however: when a business experiences genuine difficulties, cultural change during any good turnaround is quick and marked. Effectiveness can be improved almost overnight.

This is not a strong foundation for a culture though, because success always lessens the urgency that everybody brings to a turnaround. The organisation and culture can quickly revert to the status quo, which caused the problems in the first instance.

Nucor, Voca, Lotus and CDP all share at least one thing in common: all their employees have an excellent knowledge of the business, its objectives and its practices and offer their wholehearted support. As a result the leadership can embark on ambitious plans that would be impossible in different cultures.

Culture follows from the principles and policies that are put in place - not the other way around.

About the author
Robert Heller is one of the world’s best selling authors on business management.