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Corporate Culture: A Tale of Two Contrasting Companies

Mar 13, 2008
Corporate culture is loosely defined as the attitudes, behaviors and personalities that make up a company. In other words, it is how we view our work, ourselves, and how that qualifies and determines our look and feel. Culture is us.

If we accept this general definition, the next thought is: how does it apply? 'Yeah, we know what it is - but what does it do?'

Sometimes fate puts us in funny positions and in this instance my case studies involved two similar businesses, about the same size, and in the same industry and at the same time. Both were struggling financially.

Upon my initial analyses, both businesses had good growth potential and would be profitable. Both had very similar problems and both had owners that were ego-driven hard workers.

There was never a question in either company of the willingness to work hard. There was, however, a great deal of difference in the willingness to do what needed to be done.

After the initial analyses and employee interviews it was clear that both owners were holding their businesses back. Both owners acknowledged they were a problem in their own companies.

The owner of Company A became convinced he was such a problem that, for his business to grow, he paradoxically had to leave it. He turned his decision-making and management over to me and several key employees.

The owner of Company B also acknowledged he was part of the problem, but decided that by working harder, he could overcome the problems he created.

The first thing we did at company A was to fire some minimal employees and hire some better ones and give them added responsibilities.

The absentee owner of Company A expressed his concern at doing this but accepted it. He understood there was no alternative.

We made some tough decisions and at every opportunity there was praise from me on their efforts. They made mistakes but the mistakes tended to be small ones so they learned from their mistakes and moved on.

After several months at Company A, some very interesting developments occurred: (a) a fierce company loyalty developed among all employees; (b) they would not let the absentee owner make any decisions;

(c) my intervention became less and less necessary - all employees constantly discussed how to improve productivity and deliver more value to the customer;

d) profitability increased to the point that all employees got raises;(e) morale steadily improved; (f) Company A began to gain market share.

Company B took a different route.

The owner did not want to fire any minimal employees because he had become a friend and "father-figure" to them. The owner began to work longer and longer hours. He began to distrust his best people.

After several months, some interesting developments occurred in Company B: (a) the stress level of all employees went up; (b) several key people quit;

(c) Company B was not able to attract good employees; (d) employees began to resent the micromanagement style and looked for ways to get back at the company;

(e) more and more intervention was necessary on my part to keep the status quo; (f) profitability decreased and customers were lost.

Six months later, the results were not surprising. Company A was growing steadily, morale was high and their employees were the highest paid in the industry. Employees enjoyed coming to work and worked very hard. They constantly were looking for ways to improve and look for new customers and markets.

Company B downsized and filed for Chapter 11. Employees were discouraged and many began looking elsewhere for work. Customers noticed that Company B was in trouble and took their business elsewhere.

Several years later the ego driven owner of Company A sold out and received a handsome sum for his efforts. About that same time Company B folded and the ego driven owner cashed out about even.

It is ironic how the same force that creates a company can tear it down.
About the Author
Jack Deal is the owner of Jack D. Deal Business Consulting. Related articles may be found at http://www.jddeal.com/blog/business and http://www.freeandinquiringmind.typepad.com
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