Personal development 2

Culture is critical to your business success!

If you want to get a lesson on the importance of culture, try inadvertently buying a business off a convicted criminal as I did (I kid you not)! | Culture is critical to your business success!.

If you want to get a lesson on the importance of culture, try inadvertently buying a business off a convicted criminal as I did (I kid you not)!

Subsequent to buying a business it came to my attention that the previous owner had been incarcerated at the behest of Her Majesties criminal justice system. That fact became relevant to me because post sale as he decided to do everything possible to destroy me.
He targeted me for years, before finally losing interest. Some years later I became aware that he had boasted to former employees that he was going to take me down and buy the business back cheaply. Thankfully he failed!

The lesson I received on culture has been one of the many inadvertent benefits I have received from the experience.

Culture starts at the top. The leader of the company has a pivotal role in the creation and ongoing direction of that company’s culture. Who they choose as their leadership team will form the next level of foundation stones, that will influence the company’s culture.

With the case in point, the former owner had a young inexperienced management team who were easily influenced. They looked up to the older, former owner as their role model. Seeing him drive expensive cars and socialise with celebrities influenced them in wanting to be like him.

Whether you set out with a planned strategy to create a particular type of culture or not, as the leader your conduct will influence the outcome.

As part of the handover process, I noticed that the former owner was very distrusting. He was very suspicious of his staff. He limited the information that he would share with staff and threatened people that he felt could not be trusted. He was worried that if the staff knew too much, they might leave and start up in competition.

In finding out that the former owner was a career criminal, his distrust made sense. He was judging others based on himself. He knew what he would have done in their circumstance, so he was worried that they might do the same. His distrusting, threatening behaviour, along with the staff getting to see first-hand some of his dishonest practices, bred a very unhealthy culture.

What was the impact of the former owner’s behaviour? I caught both the sales manager and accountant stealing off me. Whether these individuals were dishonest before they joined the business I do not know, but that is what they were in their time with me.

Was there any chance that the remainder of the team would be good, honest, hardworking individuals given their dishonest role models? The business had about 30 staff of that only a handful could be considered honest. The rest were employing various tactics to rip both me and the clients of the business off.

Individuals may not start out as dishonest, but if they become immersed in an environment where its endemic, it’s difficult not to simply follow suit. It can be a slippery slope that people progressively fall down.

As a new owner, upon discovering the realities of the culture, it’s not an easy thing to change. You may hold yourself to a high standard and clearly articulate your vision, but if the problems are endemic as it was for me, your chances of bringing the staff around are pretty much zero.

Ideally if you had an abundance of money, you would fire most of the staff and push the reset button. Given the fact that I had spent all my money buying the business (and had debt) I could not afford to allow turnover to drop to any great extent, so clearing the decks of most of the staff wasn’t an option. As it was, culture was only one of many issues, as the former owner reached into his bag of tricks to cause mayhem.

In my situation, I had no choice but to undertake a slow and painful process of getting rid of those with dishonest traits. Ensuring that I did not forget my lesson, the last two members of my management team from the old group tried to blackmail me. Thankfully, in doing so, they presented a great opportunity for me to get rid of them.

My experience was extreme, but nonetheless there is a warning for those contemplating buying someone else’s business, if the culture is bad, it will be very challenging and slow to rectify.

In finally getting rid of the dishonest staff, it proved a great exercise in seeing just how different things could be with fresh untainted new staff. We were finally able to start building the culture consistent with my vision. I could finally appoint an honest management team!

People will potentially judge you not just on what your business does but also on how you do it. As a business owner, you want to be proud of what you do. Owning a business that was populated with dishonest people looking to take advantage of clients wherever possible was torturous and shameful. I would not have wanted to be a client of the business back in those days!

Your culture starts with you, both in your actions and what you articulate. Who you surround yourself with is also key. Find people of like mind who share your vision and you can truly create great things. Going to work will be more enjoyable and as a consequence more productive when you have a harmonious team.

You won’t always get it right with your appointments; some people will deceive you but stay true to your goals and remove those that don’t share your vision. Be steadfast in your determination to create the right team as the rewards will make it worthwhile.

If you turn a blind eye to an employee that doesn’t share your vision or meet your standards, they will potentially cause a great deal of harm. In a different business I recall bringing on a new employee and within 6 weeks, the previously harmonious work environment was falling apart with infighting. Upon investigation, I found this new employee was going around making up stories about what colleagues were saying about one another. If you don’t act quickly in those circumstances, you could potentially end up losing good staff members and remain stuck with the problematic one.

Act quickly to get rid of problematic employees. If you need to, pay them out to get them to leave as it will be cheaper in the long run.

If you ever lose an employee good or bad, accept it as an opportunity to bring on new skills and fresh energy to help lift your business to higher levels and further strengthen the culture you are developing.

Always be clear in your expectations and lead from the front. You need to set the standard if you want people to follow. The greater the effort that you put into developing the culture of your business, the greater the likely reward.

A lot of businesses struggle because they allow their culture to be compromised. In a lot of cases there is no conscious effort to envision a desired culture and work towards achieving it.

If you don’t deal with the problematic employees, or clearly communicate your expectations, don’t be surprised if you have problems that persist. If your business is not going as well as you like, review your culture. Is the environment conducive to bringing the best out in everyone and do you have the right people? The power of a great team is exponential!

A great culture will be the bedrock of a great business!