Without a clearly understood company culture your contracting firm can’t grow. You can’t even hire new people with confidence, let alone believe those new hires will make the right decisions.
Leveraging your clearly established company culture solves a multitude of problems.
– Chuck McKay
Using Culture to Promote Word of Mouth
Not everyone will care about a company’s values, or even its services, but there’s no better way to attract a loyal customer base than to say, “The values you use as guiding principles are those we’re guided by, too.”
When consumers’ cultural values are in alignment with those of the company, advertising becomes more effective. It’s really not hard to convince people to take action on something they already accept as true.
Using Culture to Eliminate the Boss as the Bottleneck
Without an established company culture, procedures, and empowerment at the point of customer contact, every customer negotiation needs the boss’ approval. Without employee buy-in to “This is how we do it,” the company simply can’t grow.
Small companies that operate nowhere near capacity can ignore the owner’s values for a while. The overextended boss can keep expanding his own responsibilities. But, there’s a limit to the number of hours that boss can put in, and when the boss is spread so thin he (or she) can’t work even one more hour the company stagnates at that level.
The late Tony Hsieh, founder and CEO of online shoe retailer, Zappos, said: “If [the CEO] has to be the one making all the decisions, that just doesn’t scale.” (McKinsey Quarterly, “Zappos CEO Tony Hsieh.”)
The obvious solution is delegation. But without company culture, and a system of procedures, to whom could the boss delegate?
Company culture creates procedures that allow decision making at the front lines, by employees closest to the customers. Employees empowered to fix customer problems on the spot provide the best customer experiences. Companies thrive when employees, new hires, customers, vendors, and partners understand what’s expected at every touchpoint.
- The Ritz Carlton hotel chain allows employees to spend up to $2,000 per incident to solve customer issues without getting approval from a supervisor.
- Costco’s no-risk return policy gives employees the authority to take back items, or make exchanges, without time limits. Even without receipts.
- The U.K.’s Pret A Manger coffee shops don’t have a customer loyalty program. Instead, employees are required to give away a certain amount of free coffee and free food. The free goods can be used to resolve issues or simply to acknowledge long waits in line.
Like Brian Scudamore, Tony Hsieh’s attitude was that Zappos company culture was their most important asset:
“We’ve actually passed on a lot of smart, talented people that we know can make an immediate impact on our top or bottom line but if they’re not good for our culture then we won’t hire them for that reason alone.
“The reverse is true too. Even if a person is great at their job, even if they’re a superstar at their job if they’re bad for our culture we’ll fire them for that reason alone. And performance reviews are 50% based on whether you’re living and inspiring the Zappos culture in others.” (McKinsey Quarterly, “Safe Enough to Try: An Interview with Zappos CEO Tony Hsieh,” Chicago, October 19, 2017.)
Interestingly, employees can quickly feel whether the company’s values fit their own personal values. It happens at 800-Got-Junk. It happens at Zappos. It happens in your company, too.
Employees will admit misfitting far earlier than is obvious to an employer. That’s why Zappos offers $3,000 to each new employee to quit and walk away from the company. Between 2-3% of new hires take the money. Those who stay are passionate and engaged, and have bought into the company culture.
Share Culture Stories
Finally, it’s important that employees share stories of company culture in action.
- When Bob stays on the phone half an hour past closing to resolve a customer’s problem, the whole company needs to hear about it.
- When Steve picks up the watch at the repair shop and delivers it at home that evening so the customer can wear it when she flies out early in the morning, every other employee needs to be able to repeat that story.
- That time Wendy drove a Notary to a 50th wedding anniversary celebration to get a signature before the deadline; it should become a company legend.
The more examples we have, the more other employees can imagine themselves going beyond to deliver exemplary service.
A positive work culture, which embraces the constructive competition of ideas, and trusts the professionalism of employees, leads directly to a scalable business.
Company culture is always the outgrowth of the owner’s core values. And those values don’t change.
Now that we’ve empowered employees, what should the boss be doing? She (or he) should be following the principles laid out in Part 10.
The content for this series of posts was taken from Chuck McKay’s The Personality Prescription for Contractors, available on Amazon.
Links to previous posts in this series:
- Personality Prescription, Part 13 – Finding Talent - December 2, 2022
- Personality Prescription, Part 12 – The Perils of Celebrity - November 17, 2022
- Personality Prescription Part 11 – You Should Be a Celebrity - November 3, 2022