In the digital age, it’s become simpler than it’s ever been in history to set up your own business and fulfill your entrepreneurial dreams. The initial steps are pretty common. A founder comes up with a business idea that he’s passionate about. He (or she) figures out how much money he’d need to kick start the business. He puts together the money from savings, loans and other seed capital. The business is registered. And voila, a brand new business is born!
So far, so good. But what happens ten years after the business is set up? Twenty years after? Data from the Bureau of Labor Statistics show that nearly 50% of all new business perish by the fifth year. By the tenth year since startup, the survival rate dips to 35%.
Who would want to put in all those blood, sweat and tears into setting up a business, only to see it vanish in a decade or so? Not me. I’d want to leave behind a legacy, build a brand that is looked up to generations later. My bet is, so would most other entrepreneurs.
Here I share with you three fundamental steps I’ve learned over the years on how to lay the foundations for just such a business.
1. Pick a Core Value and Live Up to It
Walk into any office and chances are, you’ll see posters lauding teamwork, integrity, customer service, and a whole assorted range of values that the company wishes to foster among its employees. The trouble with these lists is not that they’re wrong. They’re simply impossible to attain all at once.
Do yourself and your employees a favor and pick one single value that sums up the company and how it does business. Spend some time reflecting on what makes your company unique right now. Is it your amazing service levels? Is it the fact that you’re obsessive about offering the lowest price to the customer? Or is innovation your biggest driving force? Dig deep and unearth your one core value and focus on hardwiring it into the organization’s culture. Reward behavior that lines up with your core values. Encourage such behavior with incentives and public praise.
It’s OK if you focus on just one or two core values at the cost of other lofty ideals that many companies aspire to. Disney values customer service and consistency over individuality. Innovation and creativity are a priority for Adobe. Apple worships product design and improvement. A much younger company like Evernote puts employees first by offering unlimited vacation time to employees and actually paying them a $1000 to go on vacation for at least a week every year.
2. Hire People Who Reflect Your Core Values
When it comes to sustaining a corporate culture across the years, it’s hiring the right kind of people that makes all the difference. While you can definitely mold individuals to match your culture to some extent, it’s a lot easier to hire employees who share your values to begin with. Once employees who are a great fit with your existing culture come in, all you need to do is work on honing their skills so they can perform to the best of their abilities. An employee who shares your values and cultural quirks will carry these forward and build on them in the years ahead, ensuring that the culture does not die out with the current generation of employees.
A study by researchers at the University of Iowa found that a cultural fit between employees and their organization led to better job performance, greater job satisfaction, and higher levels of commitment from employees. Organizational psychologist John Morse proved this experimentally, as far back as 1975. He split employees into two sets – one that was assigned tasks at random and the other that was given tasks that matched their personalities. Morse found that employees who were placed in jobs that were congruent to their value systems and personalities felt more competent and performed better than the ones who were in the randomly placed set.
The writing on the wall is clear. A company survives in the long term only when it performs consistently well year on year. For a company to do well, each employee must perform well. And for employees to perform well, they’ve got to sync with the organization’s culture.
3. Inculcate a Culture of Teamwork
It is not enough to zero in on your core value. To build a lasting culture, it’s important to share it with each and every member of your team. “Sharing” goes beyond division of work of allocation of responsibilities. It’s about coming closer as an organization, in terms of communication and in terms of results achieved.
The best companies make sure their leadership has open lines of communication with the rank and file. Daniel Mead, former CEO of Verizon Wireless was famous for dropping by unannounced at their 1900 retail outlets across the country unannounced and interacting with customers and employees alike on a regular basis. Mead encouraged his C-Suite and executive team to spend 70% of their time outside the head office and spend it instead at stores where the real action is.
However, reaching out to every single member of the organization is not easy with the daily demands of growing a business thrown into the mix. Only about 39% of CEOs communicate with their entire organization at least once a month, as per a CEO.com report. They are more accessible via email, though. While 69% of employees receive a direct response from their CEOs within the day via email, 15% get back within the hour!
It’s so easy to replicate this level of communication within your organization, regardless of its size. Tap into technology to up your level of sharing with your teams. With a tool like Slack, your employees are just a single @mention away. Another nifty plugin called Grexit allows you to create shared mailboxes with your team. Goodbye, project management!
Succession planning, mentoring programs are all great to carry on a business into the future. However, without a strong foundation of a winning culture, none of these future wise moves create any measurable impact on your organization’s longevity and long-term success. Investing time in building a strong shared culture is like laying the foundations for a skyscraper. Here’s to many great stories ahead!