Dec 122010

By Rick Ziemski

“Culture is a little like dropping an Alka-Seltzer into a glass – you don’t see it, but somehow it does something.”
~ Hans Magnus Enzensberger

Richard Ziemski

Richard Ziemski

Frequently, when we wonder why things happen in a business the way that they do, we find that “corporate culture” is behind the outcomes. Whether you plan to start a business or already own one, your corporate culture can make the difference between mediocrity and excellence in performance.

By definition, corporate culture is “the character of the organization” that embodies the values, customs, traditions, meanings and norms shared by the people in the organization, and determines how these people interact with each other and with the stakeholders outside the organization. It is what makes your corporation unique and is the foundation for the ethical standards and behaviours within the organization.

Typically corporate culture is a reflection of the values and visions of the founder/leader of the business. As an owner, to understand your corporate culture is to understand yourself first. Businesses normally start small and because the owner/manager plays a direct role in all activities, he or she cannot help but shape the evolving culture. As new people are added, they pick up on the norms and behaviours and become assimilated into the culture. As an example, an owner is distrusting of his employees and believes that he is the only one who can get things done right. Eventually, the assimilated employees do not behave with initiative, but act defensively to cover their behinds. Performance suffers.

With time and growth, business conditions change and that necessitates change in organizational behaviours, which in turn requires change in corporate culture. Enlightened business leaders understand this need and either change personally or step aside to allow for the birth of a new culture. It takes an insightful realist to understand when they are driving the wrong culture in the business. For those leaders that don’t get it the usual result is a broken business and lost shareholder value. It is no surprise that in broken businesses, turnarounds are most successful only after first lopping off the head of the organization through executive terminations. Where the task of changing the corporate culture is insurmountable it is often better to let the ailing business die. Should General Motors have been taken off life support?

We humans often aren’t very good at looking in the mirror to see the truth about ourselves. Usually we can use some third party objectivity in these matters. It makes good sense to periodically conduct a corporate culture audit to see if the culture is right for your business conditions. Using external, experienced mentors or advisors as a resource can provide that third party objectivity needed for this exercise.

Richard Ziemski, C.A.
Management Consultant

Richard Ziemski

Rick Ziemiski - A Chartered Accountant and experienced senior financial executive, is owner and principal of Weslaw Management Services (Hamilton, Ontario), a provider of strategic and operational management services to small and medium sized businesses. He enjoys being the “grey hair” support to younger and less experienced entrepreneurs and business owners.

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