The High Growth Challenge: Are You Winning on the Cultural Battleground?

Every business has a cultural battleground, for most the battle is little more than a skirmish. Even that, for many businesses, is something they struggle to win. For High Growth Businesses, winning on the cultural battleground is vital to their survival.

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Are You Winning on the Cultural Battleground? (Photo credit: Wikipedia)

The first question you're probably asking is "where is the cultural battleground?". The answer is anywhere a new recruit comes into contact with your company. So in a small start up it is most likely to be the founders of the business. For a larger company it would most likely be their direct reports and for a business that is bigger still it will be the next level down. In general, it tends to be at the lowest levels of the company hierarchy where most interactions take place.  The cultural battleground is where new recruits come up against your company culture and will try to add their own influence the intensity  of the skirmish will be based on their own history and closeness to your business's culture. The further away the recruits culture from yours the more intense the skirmish.

For the business, winning on this battleground is vital, after all if it cannot integrate new staff into its existing culture readily, then individual skirmishes will persist and the existing staff will become battle weary and be even less effective in protecting your culture. More importantly for a High Growth Business, at some point this new recruit will become the company's face for other new recruits, who will want to push their own cultural norms. It is easy to see on this basis, how quickly a company's culture can be undermined and changed. Very often this can happen without the senior management being aware of the issue. It will only become apparent as they see employees become less committed not only to the company's values but also those processes put in place to make sure the culture remains embedded in the business.

So far we have only looked at this issue on an individual basis, now let's imagine the problem from the aspect of numbers. For example, over the next 18 months you expect to grow from 32 to 44 people. That assumes a growth rate of a little over 20% per annum. It involves taking on 12 people at a rate of 1 person every 6 weeks over 18 months. 

This strategy carries a risk to your current culture and customer experience; unless you can convert your new recruits to buy into your culture quickly enough, to prevent them from being polluted by other new recruits.  So in this case time is of the essence. Using our previous example, if it takes you 18 months to integrate a new recruit, you'll have a business with potentially up to 12 heretics in a group of 44 as none will have yet been integrated.  Under those circumstances it would be almost impossible to preserve your cultural values and you'd certainly lose the cultural battle. However, if you can integrate your new recruits in say 6 months then you'll only have 4 heretics in a group of 44, that's a much more manageable number.  Better still with the short integration time certainly 1 and possibly 2 of those five will be very close to integration giving you a great chance of winning on the cultural battleground.

As a High Growth Business it may be that you will be taking on new people about every month for the foreseeable future. Then this becomes a real concerted and incessant battle. No doubt your success has in part been achieved by the application of your cultural values and you’ll want to protect them to ensure your continued success, then winning on this battleground is a matter of survival. In which case to support your side you need to provide your “troops” with the best equipment. That will include:

1) A clear and strong recruitment process that seeks to take on only the best talent with the best cultural fit.

2) A comprehensive operations document which describes in detail “the way we do things here” and is what I call "The Big Colouring Book" of your business.

3) A well thought out and considered statement on your cultural values. Or what might be described as “why we do things the way we do things here”.

4) An induction and integration process which enables new recruits to understand “the why” thereby making it easier to accept “the how”.

The better prepared and supported your troops the more new recruits you can manage. If you get this right you can cope with almost any number of new recruits. I can give you two examples based on my own experience:

1) A company with a planned growth of 7 new starters per month for a year with a starting number of 120.

2) A subsidiary which, on the back of a big contact win, grew from 28 to 81 staff in a little over 10 months. 

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Exigent Consulting provides specialist services for Managing High Growth, Business Turnaround, and Mentoring to the Small and Medium Business. We help business owners improve the profit performance of their business. 

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Good Culture and Return On Investment

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There has been a lot in the press and blogosphere recently about how its people that matter in providing a competitive advantage to a business. In a recent discussion with a number of  high growth companies, whilst there was a general acceptance that people and more specifically Culture mattered; there was a mixture of both skepticism and confusion about how one might quantify the benefits. 

Buddhist Flags Tibet

I went away to think about how I could use simple recognisable examples to demonstrate the economic value of "good" culture over a "bad" culture. 

Lets take two examples. The first is a company which might be described as having a bad culture or perhaps a culture where the employees don't feel engaged or committed to the business. I expect we can all recognise similar companies.

In this business employees turn up for work between 8 and 9 am but do not voluntarily start their work and continue to read their newspapers or use their smartphones until 9am. During the working day they stick religiously to the rules having 15 mins break in the morning and having their 1 hour lunch break. At the end of the day to make sure they can leave at 5pm exactly, consequently work winds down around 4:45 and everything is put away, necessary ablutions done in time for a mass exit at 5pm.

In the second business where they have a "good" culture staff arrive between 8 and 9am and mostly start their working day when they arrive, whilst everyone takes a lunch break many can be found back at their desks working resulting in them having substantially less than the mandatory hour. When 5pm arrives most of the staff are still working and they gradually drift away from work over the next  hour.

So its easy to see that on average people in the company with a "good" culture or where they are engaged with the organisation work longer. For the sake of this example lets assume that on average the "good" culture business get 30 minutes more per day per employee than the business with a "bad" culture. Based on my everyday example I don't think that's an unreasonable estimate to make.

Over a week that's 2.5 hours per employee on the basis that an employee works 46 weeks a year, excluding holiday entitlement and public holidays, that equates to 115 hours per employee per year or if you prefer about 16.5 days.   

For a company with 10 employees that's 165 extra free days work or 33 man weeks. That about 3/4 of a full time employee every year for a 50 man company that's 3.5 man years of effort extra.

So what does that mean in financial terms. That's a bit more difficult to quantify because were are going to have to make some assumptions about average pay across the business. Using composite rate of £10 an hour, which I suspect is a little conservative but makes the maths easier, we get an economic benefit of about £1150 per employee per year. For our 10 man company that £11500 per year. For our 50 man company that's £57500 comfortably more than a couple of employees. If we assume the businesses are in aerospace, IT or other high skilled industries the financial benefit increases dramatically because the average hourly rate is probably closer to £25 than £10.

So what have we discovered? Firstly I would say small differences matter 30 minutes a day isn't much spread across employees but it adds up to a significant extra saving and competitive edge. Secondly, in keeping this example as simple as possible we have ignored a number of other benefits including the fact that people work harder and more effectively when they are happy at work. They don't "clock watch", they operate better as a team. All these additional factors increase productivity and performance. They are however very difficult to quantify and certainly not without an organised an scientific study which is way beyond my capabilities. 

Nevertheless I think it has been possible to demonstrate clearly that there is a quantifiable benefit to having a "good" culture and even on this anecdotal basis its financial benefits are not to be ignored.

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Managing High Growth: Using Your Culture for Competitive Advantage

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In my earlier piece about the importance of culture in high growth businesses I talked about how culture is considered a soft skill and that most business people tend to ignore it, mostly because there is no imm

Aleutian Cultures (Photo credit: Travis S.)

ediate quantifiable benefit and of course because it involves dealing with people. That's for HR people isn't it?

What I wanted to share in this post was the idea that culture can be a potent weapon by giving you an important competitive advantage. If implemented and understood it can help significantly in promoting a company's growth. Your culture establishes how your company and its staff interact with one another and with the outside world (your customers and prospects). It reflects your core values and your ethics.

So how is this a competitive weapon? Well lets look at two areas where High Growth Businesses experience problems. Finding and keeping the right staff and dealing with new problems. 

All high growth businesses face many challenges which are outside the experience of the owners or the senior staff. There is naturally a high degree of risk involved in making decisions in this environment. However as a business owner you don't want to be the only person who makes these decisions and by getting your staff to face these issues it in turn develops their skills. In order for your staff to be confident about making these decisions you must have the right culture in place. That is firstly to allow them to make decisions and not be afraid of making mistakes; and secondly a culture which support risk management so decision making can be shared across the management team and moves away from blaming individuals. Having the kind of culture which supports this kind of decision making will give you a real competitive advantage.

The other area is the strength of your culture. One of the major growth inhibitors is not getting enough of the right kind of people together with the time taken to integrate them  into your business to become fully productive. Having a strong culture creates what I have termed a cultural wall it works like this.

A company'as cultural wall uses a strong culture to ensure that only those potential employees who align with your culture will stay with the company. Those who are not fully committed or are trying to change it will bounce off the wall. That is either deliberately not join or leave soon after joining. Those who align with your culture will cross the wall and feel protected. This affinity leads to significantly lower attrition and a quicker absorption of new staff bringing them up to full productivity quicker, not to mention the increased likelihood of staff putting in more effort and extra hours into something to which they feel fully committed. 

By contrast those organisations with a weak or poorly developed culture suffer from inherently higher attrition as left unchecked people develop pockets of competing cultures, which results in a generally high level of attrition, and an increased chance that new employees will take longer to get up to speed. 

It should be obvious from the above how important Culture is to a business, the quicker companies get to grips with this the better their chance of longer term high growth.

Exigent Consulting provides specialist services for High Growth Business , Business Turnaround, and Mentoring to the Small and Medium Business. We help business owners improve the profit performance of their business. 

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