“The biggest protective moat you can create is your company culture. Finding and keeping talented employees is the most challenging thing we have to do as business owners.” Scott Allison
How many times have you heard business owners boast “Our people are our greatest asset” or “Our people are our USP”? The truth is that it sounds good, but the reality is actually different.
Saying that you put your people right at the heart of your business requires a company culture that delivers just that, and it can be hard to achieve.
Tony Hsieh of Zappos on why culture matters:
Scott Allison, now founder and CEO of Teamly Teamly but previously CEO of telecoms provider Abica spoke at a recent Exchange event (June 14 2011) about Company Culture and shared some of his experiences with fellow members.
Scott highlighted the importance of company culture to a business and to its employees:
• Productivity can increase by anywhere from 20% to 100%
• Staff churn is incredibly low
• Ideas are generated from the ground up and this innovation can keep a company ahead of its rivals
• There is a clear framework for delegated decision making, and by giving people autonomy, job satisfaction vastly increases too
And he told the story of how he and his fellow directors took Abica on a journey that saw the company reevaluate its core values, focus on a goal to scale the business, and ensure all employees were part and parcel of the process. It was a challenging journey, but it ultimately resulted in happier employees, a better business, and winning a prestigious award for customer service.
This is what Scott said:
On why culture matters:
“It’s all about motivation: Once money is not an issue people are motivated by autonomy (empowered and involved), mastery (feeling great about their job, their skills and well trained) and purpose (what gets people up in the morning; being part of something bigger)”
On recognising the need to do something about culture:
“In 2006 four of us created “abc” by merging our businesses together. A year in, and although we were commercially successful, that was more about past success and we hadn’t made great progress in scaling the business beyond the founders.
“We definitely had a big challenge ahead of us: Operating in telecoms there are a lot of cowboys, and having been burned once with a bad experience, a lot of companies are very reluctant to change providers again.
We had our own set of “standards” which we had agreed, but weren’t taken that seriously by everyone.
We had a loosely articulated goal of what we wanted to do (create a £20M company and exit within 5 years)”
On how they tackled the challenge
“We started by defining our values. That evolved into a core purpose, a vision and a BHAG (Big Hairy Audacious Goal).
The benefits were significant: we developed an exciting atmosphere, we were attracting good staff and repelling bad ones, creating more loyal staff, with people more confident in how to behave and focused on competing with the big guys in our sector.
On specific tasks
“With the help of our coach we wrote down our personal values, agreed a set of business values – with input from everyone – identified professional behaviours and created a list of actions that reinforced those behaviours.
“It was powerful because then people understand why we do everything we do. And we talked about them. ALL THE TIME.
On the results for Abica
“People were motivated by more than money. It was about feeling challenged and being part of something bigger. It’s motivating, it’s exciting, it’s satisfying.
“People joined us because of the power of the story of the vision, and also because they were looking for something different.
“We won a major award for customer excellence beating John Lewis who were runners up. We were punching well above our weight. We were a small company of 12 people with just over a million turnover but people thought we were ten times bigger.
“We had employees that cared and felt part of the team, and we wanted them to think like us; as owners. So we shared KPIs with them weekly, and we planned to share monthly management accounts as well. That way it’s completely transparent. I know a number of companies who’ve done it to great success.”
“The biggest protective moat you can create is your company culture. Finding and keeping talented employees is the most challenging thing we have to do as business owners.
“Competitors can copy your pricing, your products, your promotion, but they can’t copy your culture, and they can’t steal your people if you have loyal and satisfied employees.
“Believe in it, and build on it and you will create a company, a brand and reputation that no amount of advertising will create and a company with true long term value.
Scott’s “Things to Remember”
• It doesn’t matter what your core values are as long as you commit to them.
• If you can commit to your core values, you will be proud of the organization you create; you can’t buy that kind of branding.
• Being a values based company can require more patience with revenues and profits, but if you lay the foundation it means long-term success.
• Make sure your values don’t become just a plaque on the wall by truly committing to them; otherwise it will all be for naught and you will be at square one again.
• It will get worse before it gets better, but if you can push through the dark parts the culture can almost completely take care of itself.
If you liked this, here are some links to additional content we think you will also like:
A great video to watch:
What motivates us, RSA lecture by Dan Pink
Some great books to read:
Dave Logan, Tribal Leadership
Tony Hsieh, Delivering Happiness (Zappos)
Cameron Herold, Double Double
Howard Schultz, Pour Your Heart Into It (Starbucks)
Ricardo Semlar, Maverick
Firms of Endearment, How World-Class Companies Profit from Passion and Purpose
Rajendra S. Sisodia, David B. Wolfe, Jagdish N. Sheth