Every organization has a culture. Successful companies create their culture instead of letting it happen organically.
A study by the Harvard Business Review found that companies with a strong, positive culture experienced revenue growth of 4 times that of companies with a weak culture. (Source: Harvard Business Review)
As a franchise owner, you seek ways to maximize your profits. One crucial factor in achieving that goal is having the right company culture. But how do you know when it’s time to change your culture? Here are 4 signs to look out for:
- Higher turnover rate than industry / regional averages. Difficulty attracting new customers and employees. The employee engagement survey scores are low for two or more consecutive quarters.
- Inconsistent execution leads to slower growth than anticipated and more customer complaints. The discretionary effort of disengaged workers is minimal and varies depending on the carrot of the moment.
- Legal or ethical violations. This is an issue for all stakeholders.
- Some days you dread going to work. As the franchise owner, you are constantly resolving unpredicted issues, and you are drained at the end of the day. Other days, when you’re leading your company and creating value, you’re energized and wonder how to make more of those days happen.
4 Types and examples of cultures:
- Clan culture is like a family; the company operates as a collaborative and nurturing environment emphasizing employee development and teamwork. An example of this culture is The Walt Disney Company.
- Adhocracy culture is entrepreneurial and innovative, emphasizing creativity, risk-taking, and experimentation. Employees in an adhocracy culture are empowered to explore new ideas, take risks, and generate novel solutions. Tesla fits this culture.
- Market culture focuses on competition, achievement, and getting the job done. The emphasis is on achieving measurable outcomes, setting and meeting challenging goals, and constantly improving performance. Amazon is the leader in this culture.
- Hierarchy culture rewards structure, control, and stability. It emphasizes rules, regulations, and procedures to maintain order and consistency in the organization. McDonald’s is a hierarchy culture example.
These categories were first introduced by Cameron and Quinn (2011) in their Competing Values Framework (CVF) and are widely used in organizational culture research.
4 Steps to define the culture Franchise Owners want using the Franchise Owner’s Dashboard to focus on their Leadership Attributes
- Start with your clear vision, mission, and values, and communicate those regularly to all stakeholders. According to a study by Gallup, companies with a strong sense of purpose and values outperformed the S&P 500 by a factor of 10 from 1998 to 2018. (Source: Gallup)
- Your leadership habits set the example for your company’s culture. Are you living your vision, mission, and values daily? What do you tolerate from your superstar?
- Create and implement systems and processes that align with the vision, mission, and values.
- Define and apply compensation and incentive structures that reward behaviors and actions that align with the desired culture.
Are you financially rewarding behavior in line with your vision, mission, and values?
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- Provide employees with ongoing training and development opportunities to help them grow and improve their skills. How do you find out your employees’ aspirations?
In addition to training employees for their current skills, add training for the skills needed for the next level, and increase your team’s soft skills and teamwork. Ensure those running meetings are trained to do so effectively and efficiently.
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- Encourage open and immediate communication and feedback from all stakeholders, including employees, customers, and suppliers.
When Paul O’Neil took over a struggling Alcoa, he shocked investors in his first speech by focusing on his vision of zero workplace accidents. The communication system he installed notified him within hours of an accident, including non-injury accidents. In one instance, an accident occurred at the Star facility. It was minor, the employee admitted their lapse of focus, and the general manager thought the issue was too insignificant to report. Mr. O’Neil found out and called the GM to his office. The GM saw his error and resigned.
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- Recognize and celebrate successes, big and small, and create a positive and rewarding work environment.
- Continuously monitor and evaluate the company’s culture to identify areas for improvement and take action to address them.
Netflix has a unique and highly successful company culture based on freedom and responsibility. They use various methods to monitor and maintain their culture, including regular employee surveys, 360-degree feedback, and a “Keeper Test” that encourages managers to regularly evaluate their team members to ensure they fit the company culture well. They also have a set of values and principles that guide their decision-making and hiring processes.
- Treat everyone as a colleague. When you treat everyone as a colleague, your mind remains open to new possibilities, you listen to learn, and you show the other person respect.
According to a survey by Deloitte, 94% of executives and 88% of employees believe that a distinct workplace culture is essential for business success. (Source: Deloitte)
Summing up, creating a positive and influential company culture is an ongoing process. Still, with intentional effort and focus, franchise owners can build a culture that attracts and retains top talent, delivers high-quality products and services, and drives business success.
Every organization has a culture. Successful companies create their culture instead of letting it happen organically.
Download The Franchise Owner’s Dashboard, with the link in the comments, and create the culture you want for your franchise.