What’s The Fuss About Business Culture?

What’s The Fuss About Business Culture?

What’s The Fuss About Business Culture?

When we, as coaches, look at a business, one of the first items we require is – vision, mission and culture.

Vision and mission have been discussed before. It is probably accepted by now that it is really important to know where you are going with your business, so that you can take the necessary steps to get there, and it is also accepted that you should know why you want to go there – what the mission of your business is.

But what is company culture?  Culture can be defined as: “the behaviors and beliefs that characterise the company”.

So how do these behaviors and beliefs affect the performance of the company, and why is it important that they are defined, written down and acted upon from top to bottom in a company?

 

Let’s examine a couple of case studies.

 

Zappos.com

Zappos.com is an online shoe and clothing retailer based in Las Vegas, Nevada.  Their slogan is: “We are a service company that happens to sell shoes. And handbags. And more…”

Zappos believes in the importance of culture.  They have a well-documented customer-centric culture, in terms of which team members are encouraged to go beyond the normal bounds of customer service – to go so far, in fact, as to spend 10 hours talking to a customer on the phone, or giving a caller information about the nearest take-away pizza restaurant, or sending flowers to a woman who returned shoes because her husband had been killed in a motor accident.

Zappos knows that, in order to deliver such great customer service, it is necessary to have happy team members.  It is no surprise, then, that Zappos has appeared regularly in Fortune magazine’s list of best companies to work for, being as low as 11th in 2012.

And what has been the result of this well-defined company culture?  Zappos’ growth has been quite phenomenal.  It officially launched in June 1999.  In 2000, their revenue was US$1.6m.  By 2008, they had reached US$1bn, and in 2009, Zappos was acquired by Amazon for a reported US$1.2bn – but only on the condition that it was allowed to run independently, and maintain its culture.

On their Facebook page, they say: “We’ve been asked by a lot of people how we’ve grown so quickly, and the answer is actually really simple…we’ve aligned the entire organization around one mission: to provide the best customer service possible. Internally, we call this our WOW philosophy. And, we believe that it’s our unique, “fun and a little weird” culture that drives the WOW.”

Zappos hires only people who fit in with their culture, and, if an employee doesn’t adhere to the culture, he or she will be let go, irrespective of how well they perform their role.

Their good culture, properly documented, has been the key to their growth.

 

Uber.

We all know about Uber – the ride hailing company that grew from an idea to a business valued at $70bn, used by millions of people all over the world.

They’ve been in the news for all the wrong reasons lately.   It appears that the company has a toxic culture.  Women are subjected to sexual harassment, to the extent that an ex-employee wrote a blog about how she complained about harassment at the hands of her supervisor, who, it turned out, was “untouchable”, because he was a high performer.  Some of their policies seem to encourage team members t compete against one another, even to the extent of criticizing their supervisors in an attempt to get their jobs.

Drivers are not happy, feeling that they are treated like slave labor.  They feel that, while they are ostensibly private contractors, they have no control over the fees they charge, and the routes they ride.  Many work ridiculously long hours in an attempt to make a living, endangering their lives and those of their passengers.

So how has this toxic culture affected Uber?  The founder and CEO, Travis Kalanick has had to step down because the investors believed he was, to a large degree, responsible for the bad press Uber was receiving.  Uber is privately held, so it is difficult to assess the value of the shares, but some financial commentators believe that the value of Uber has dropped by as much as $10bn as a result of its poor culture.

Quite a fallout – CEO out, $10bn reduction in value.  All because of a toxic culture.

 

What does that mean for your business?  Is culture that important for a small business, with a small team? The answer is a resounding “Yes”!  As Paddy Lund, in his book “Building the Happiness Centered Business” points out, all small businesses have the aim of giving superb customer service, and very few succeed.  The reason, he says, is that the team members are giving what they think is good customer service for the wrong reasons – because they have been threatened with the loss of their job if they don’t, or because they may get a reward if they do.  He points out that the service comes across as forced and insincere, and customers are savvy enough to feel the lack of real warmth.  

The only way, according to Lund, to give real warm customer service is if the team members all have a real desire to deliver that service – and a desire can’t be mandated.  The only way that the team will have that desire is if they all feel valued and respected, and secure in their positions.  What does that translate into?  It is only if there is a good culture, with good values in the business, that team members will feel good about working in the business, and that will translate into a great team, and great customer service.

A good culture comes from the top.  It is the job of the owner, or CEO, to develop the culture, to document it, and make sure it is implemented across the board.

 

Culture matters.

 

Lex Tannenbaum

 

We can help you develop, document and implement the culture you want for your business, get in contact now!

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