A strong corporate culture is at the heart of every business success story. But achieving such a culture is often more challenging than the business results that follow.
This can be attributed to a harsh reality: to take a company to the next level, culture must almost always change in uncomfortable ways. Doing so supports a needed strategic shift to propel a business or company to new heights. This is especially true in the current economic environment amidst rising restructurings, reorganizations, and layoffs – particularly in the tech industry, which has enjoyed a prosperous bull market for more than a decade.
Having led several businesses in publicly traded companies over the past 20 years, I’ve seen and experienced firsthand the long-term impact of corporate culture on company performance. Siloed workplaces may be the biggest detriment to building a culture of success. They are inefficient, deter collaboration, and prevent the company from understanding and then responding quickly to market changes and shifts in demand.
A purpose-driven culture, on the other hand, has the power to unite a company’s workforce in a way that not only drives value for employees, but also for shareholders, customers, and the community. So how have I used culture as the foundation to grow companies’ market capitalizations, annual revenues and profits?
I started with a fundamental belief that culture must be rooted in values that align employees with the shift in business strategy and vision – where we are going, why we are going there, and how we are going to get there. At the same time, the culture must be flexible enough to support continued evolution to the benefit of employees and the business. Anything less hampers the leadership team’s ability to achieve their envisioned success for the company.
I’ve had the great privilege to lead three successful corporate transformations, paired with significant growth initiatives. In doing so, I’ve learned how to approach business success through disruption – whether it’s culture or operations – because the two are inextricably linked.
First, recognize change is hard and uncomfortable.
I feel it is necessary to state the obvious because it is as true for businesses as it is for people.
To drive continued, positive results, leaders must recognize that the whole must always be greater than the sum of the parts. When a business is stagnant in its ways, its ability to adjust to market changes, shifts in demand, and evolving customer preferences is significantly hampered. Silos must be broken down in favor of integration and collaboration. Redundancy eliminated. Old ways sometimes thrown out for new methods. Problems must be addressed, quickly and at the source, ideally when they are still minor issues.
These changes are often disruptive – and intentionally so. Change demands flexibility, increased accountability and transparency. Company culture often needs to adapt, shift and evolve as a result. We need to learn from one another and be accepting of new and improved method of doing things.
These adjustments, and even the results, are difficult for all of us. But they are downright painful for some. As leaders, we must recognize that by overcoming these challenges collectively, we are taking the necessary steps to transforming not just the business – but also our people – in a way that helps them realize their full growth potential. But it requires a willingness and desire to change that can only be achieved if there is trust in the vision and leadership. It also requires leadership to make the right, but tough, strategic decisions at the right time to continually aid in shifting the organization in its desired direction.
Be the face of the change.
Former Ford CEO Alan Mullaly recognized the importance of a cultural shift to long-term business success. What is often overlooked is that he allowed himself to be the face of the change from the start. He built relationships through one-on-one conversations with employees. After building trust, he created organizational change, altering the way employees interacted, communicated and collaborated. Only then was one of the most acclaimed turnarounds in business history possible.
Throughout my career, I also have been the face of change at companies. It has not always been easy, but I suspect I have a slightly different perspective that enabled my success. As a leader, I seek opportunities to create something meaningful. Some of my favorite memories are when I was inventing things. But not just in the literal sense. Business transformations are also opportunities to invent – or reinvent – people, businesses, brands and reputations.
In fact, these new versions of companies are the most significant “inventions” for me. It wasn’t the 11 patents I spearheaded during my tenure at 3M that excited me most. It was that they helped to lead 3M down a path of innovation that allowed the company to align with shifting consumer behavior, accelerate its growth, and ultimately be listed third in BusinessWeek’s iconic list of The World’s Most Innovative Companies, behind only Apple and Google. This success propelled me into my next role as the driver and face of change at Electrolux and James Hardie.
They always say, “Insanity is doing the same thing over and over again but expecting different results.” This adage is as true for individuals and professional development, as it is for companies working to reach their highest potential. Although once the company’s vision is clear the operational and cultural shifts will yield the desired results. It won’t be without some discomfort, but nothing good in life is.
My most recent example of such an uncomfortable shift is from my time leading James Hardie Industries. With growth lagging and valuation declining, I decided to implement an aggressive turnaround strategy – in an industry unaccustomed to innovation. Together with my team, we worked across company verticals to increase speed and efficiencies. The result was a redesigned company capable of supporting fast, high-quality construction for homeowners. James Hardie grew its market capitalization by more than US $13 billion (+370%), organic annual revenue by more than US $1 billion (+45%), and its net profit by more than US $260 million (+85%) in less than three years.
Communication is key.
One final note of caution: while a company’s vision must be informed by market forces, customer trends, and employee values, too often that vision isn’t communicated correctly by its leadership. Employees need to not only understand the company’s vision, but how potential changes in operations will eventually support intended results. Change for perceived change’s sake is a sure-fire way to frustrate employees.
Above all, it’s crucial to lead by example and empower employees to take ownership, as well as accountability. This will foster positive company culture. It’s also equally important that leaders make the tough decisions at the right time to ensure the whole is always greater than the sum of the parts. When employees buy into the vision, align with corporate values, and understand the end goal, the future possibilities are endless.
