It’s all about the culture

Once a company, or business unit grows beyond a certain point, (about 40 people, depending on the personalities and location of people) culture becomes a critical factor. If you are running a business when it gets to this size, it is likely that you have plenty on your mind other than culture. The suggestion that you need to focus on culture is usually met with some level of scepticism.

There are many factors credited for success or blamed for failure in all types of organisation from tiny businesses to countries. In the end, it mostly comes down to culture. If you want to understand why Apple and Google succeed or why Royal Bank of Scotland over-reached itself or Costa Concordia hit rocks in a calm sea, in well-charted waters, look first to the culture.

When a business starts it probably only has a handful of people. At this stage the culture is organic, the people who join are likely to be well aligned and their contact with each other frequent and deep enough that no one needs to think much about culture.

The most significant difference between businesses that stop growing at or below 40 people and those that go on to succeed is probably culture. So, what kind of culture is most likely to lead to sustained success and growth (if that is the ambition)?

Values are not some corporate blurb devised by consultants to put in the annual report. Values are how you commit to being with each other and your behaviour relating to others. Not living up to the company’s values has disciplinary consequences or results in not being part of the team any longer. The most important thing about values is that they are not an aspiration, they are how you choose to behave together.

The purpose of your organisation is the “why” you bother to come to work at all. Once you are above the basic needs level, motivation to do your best work comes from doing something meaningful, something that you believe in. The vision is the picture you create of what it will look like when you’re doing it, or when it is complete. Both purpose and vision should be aspirational and also offer benefits beyond the senior executives and shareholders.

The most important thing about vision and purpose is that they are not limited by what you currently believe to be possible and that they spread benefit to customers, staff and the wider community.

Control is an illusion; at best you have influence. If you want people to be motivated and if you want them to think about their work, then you need them to feel a sense of responsibility. That means giving them a sense of the overall picture and asking them to figure out what they are going to do about it, without trying to micro manage them or do the job for them.

Why employ people if you are not going to give them responsibility? Why be a manager/leader and keep doing the operational stuff most of the time? The best managers/leaders are the best because they minimise their operational role and concentrate on managing and leading.

Having high standards means being willing to say no. Willing to say no to substandard work and to substandard people. Think of a sports team, imagine a great football, cricket or cycling team – with one person in the team who doesn’t fulfil their role adequately, but who is kept on the team anyway. Imagine the disproportionate effect that will have on the rest of the team. Great people are motivated by being surrounded by other great people, doing great work.

If you are going to have top quality people and expect them to take responsibility and be generally brilliant, then you need to be willing to reward them well too. Not just when things are going well, but all of the time. The best people are more than twice as effective as average people and in creative work even more so. The financial rewards need to be enough that money is taken off the table as an issue, and your great people feel good among their peers.

The most important contribution to the culture of an organisation is the leadership. If the boss goes to the pub every evening and drinks a few pints, so will the team. If the boss is in the gym at 6 in the morning, guess where the team will be.

Example is not the most important part of leadership – it is the only part. Before you can instil the values and behaviour that will create the culture you need to be them. The brand is the outer expression of the culture – so your culture will also define the brand.

With thanks to Neil Crofts, authentic business,

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