How To Develop a
Strong Business Culture

Behind every great company is a great culture. And building a great culture is almost equally about what you don't do than what you do.

In fact, the biggest killer of culture is probably when a company tries to emulate a larger brand in the hopes that they'll scale because they're mimicking a culture they think is great and that rarely works.

Today I want to go over the top killers of culture, and a few ways any company can improve their culture in a way that helps their people feel like a real team with a real purpose.

Business Culture is different for almost every company I work with as an owner, investor or an advisor.

In fact, the biggest killer of culture is probably when a company tries to emulate the culture of a larger brand in the hopes that they'll scale because they're mimicking a culture they think is great, like Google or Facebook or Southwest air.

I can't even count the number of companies that have come to us for funding over the years who included "culture" as a big part of their pitch, and their definition of culture is usually something like free haircuts for their employees, and free martini lunches, and in house massage therapists, and nap rooms, large game rooms, whatever.

All because those were perks that some large brands included in their employee benefits, so these smaller companies thought they could attract better talent and scale faster if they copied the big boys.

And by the way, one of those owners came back for funding about a year after we first passed on them and he was pitching a new company.

I had to ask him what happened to his other business. He blamed the economy, and lazy employees, and a bad partner for that other company going belly up. And those might have all been true, but he pitched the same "culture" for this new company and unanimously we passed up funding him.

Killers of Scale

Now there's a few Killers of Scale we all need to be aware of, and we need to check ourselves every once and a while to make sure we don't get caught up in all the BS we hear about companies growing for reasons like "32 flavors of coffee in the breakroom", or "foot massage Mondays".

Companies grow because they are led by great leaders who know how to build teams of confident, unified, driven people.

But even great companies die or become stagnant when they fail to focus on culture, and that might mean that their culture is now out of date, or it might mean that they simply outgrew their culture and they need to fix it. Because the culture that go you to $1 million is not the same one that's going to attract the A-players you need to get to $10 or $50 or $150 million.

Don't get me wrong here: you rarely have to change your culture completely, but your culture has to be flexible.

So what kills culture other than trying to copy a large brand?

Well, one amazingly fast killer is when one team member goes rouge but they're still allowed to remain on the team. What I mean by that is when someone on your team is no longer happy and they begin acting out or they begin doing poorly at their job.

You have to remember that your other team members are watching everything. When they see someone being allowed to give 70% or 50% or 30% at their job when the rest of the crew is giving 100%, that becomes a virus, and infects other people fast.

It makes the rest of your team upset that you as the leader are allowing someone to be on the team who is not a full-team-player. That begins to infect the culture and team productivity, and revenue, and happiness, and everything in your company.

And if left alone for long enough - which might just be a matter of a week or two - the whole team will begin to perform poorly.

And when asked, most of those good employees will all point a finger at the one employee who started it. Even though that employee might have finally been let go, or bounced back and become great again, the fact is, once their attitude infects the team, it effects the culture and drops your whole organization's performance down a notch.

Even if they come out of their funk and start performing great again, the fact that they were allowed to perform poorly without the rest of the team knowing that you were addressing It caused damage between you and the team.

How to Prevent Culture Killers

So how do we prevent this?

Well, first, as a team, we get very clear on the company targets and on the actions every person needs to own in order to for us, as a team, to be successful. And everyone buys into and agrees to those actions.

Next, we need to hold regular accountability meetings with people, so they always know how they're doing.

We run Performance Reviews every quarter in most of our companies. And in those meetings, if someone is not consistently reaching their targets, we have them sign a form so they know how important it is to stay on track. Then together we decide on how I, or the company, can best help them to reach their targets, not by doing their work, but by putting them through a day of additional training, or maybe they need a day off to get their personal life in order so they can focus, or maybe they need to role play if they're sales people. But whatever it is, they know that they need to reach their targets and that we're a team and we're going to support them to become the kind of person who reaches their targets.

Now, if they go another month without reaching their targets, then we let them know the company is moving forward fast, and we need someone in their position who's going to take the actions needed to meet or exceed the targets for that department. I might want it to be them, but if they're still not hitting their targets and it's effecting the rest of the team, then we need to find them another job that makes them happier and that they'll excel in.

When and How to Reallocate Talent

Another killer of culture is when the wrong people are hired, or when the right people are in the wrong positions. Which happens a lot as we scale companies, because what we needed in a Project Manager when we were at $8 million might be a lot different than what we need at $40 million, and that person is going to feel like we're asking the world of them because we need different things that are no longer in their core competencies.

So part of scaling a company is knowing how and when to reallocate talent, by either moving team members into different boxes on your org chart, or by writing them a great recommendation letter and letting them find another job that suits them better, while you put a more qualified person into that position.

So those are some of the fastest killers of culture. But I want to leave you on a positive note, with a handful of tips on how we build powerful cultures. Cultures that makes people love work, and that drives growth.

How to Strengthen Your Culture

And here they are:

In my experience, culture is most strengthened by consistent team meetings - annually, quarterly, monthly, weekly, or daily. Because our meetings give us the opportunity to attack obstacles as a team, and celebrate wins as a team.

Culture is also strengthened when you choose staff rewards that are aimed at the family, like baskets of gourmet organic foods that you send to their home. Or one thing we did that went over really well was to deliver a barbecue to one of our team members homes because we knew that their family loved to host neighborhood barbecues. It's important to know your team, and their family, and pick rewards that show them how much they mean to you.

Now culture is a far larger topic than just one quick video, but those 2 tools work time and time again and are often overlooked by growing companies.