What makes you different? Set the foundation
A great company culture is not an option nowadays, it has became a need to attract, retain and motivate talent. But what works for some companies might not work for others. Just pay attention to the missions statements below, all of them are different.
- Google →“Organize the world’s information and make it universally accessible and useful.”
- AirBnB → “Whether an apartment for a night, a castle for a week, or a villa for a month, Airbnb connects people to unique travel experiences, at any price point”
- Ikea → “At IKEA our vision is to create a better everyday life for the many people. Our business idea supports this vision by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them”
These companies all have different mission statements, high aspirations and difficult challenges to go through. However, all of them have strong company cultures. Not surprising, those companies, known for their strong company culture, are those consistently outperforming others in their industries. As a result, they have higher profit margins, higher ROIs and better cash generation.
All together, this leads us to inference that having strong company culture leads it to creating a competitive advantage. Their business models are well known, deeply analyzed and many competitors have tried to replicate them unsuccessfully. Why? Mainly because there are factors that you can’t recreate unless you really believe them. As a result, a give – take relationship is created between them that drives the purpose, defining who you are.
If all agree that the company culture is great, necessary and the driver, the next step would be setting the foundation. Before you start, here are a couple of concepts to bear in mind while creating your culture:
- Aim to build a safe and trustworthy work environment
- Leadership,management and employees are in charge to protecting it
- If you think it is expensive to have it, try without
- It is not a competition of fancy and shiny perks
WHY → HOW → WHAT
While building a company culture, there are several points, and will be matter of other posts in the future. Yet, there is one that, from my point of view, is the foundation. This is the Purpose, or in other words, clearly define the why. Once you define and set the why, the rest will be consequence of the purpose.
People drive themselves by the why not by what. You can lead people join you with a claim of better a better what, but this claim will not create loyalty. This why there is a huge difference between Why → How → What vs. What → How → Why, because transmit a message of
“The ability to win hearts before minds is not an easy task, it is a delicate balance of art and science” (Start with Why, Simon Sinek, Chap. 5). People value and are driven by purpose not by perks. Building a purpose will lead a safe and trust environment regardless specific guides.
WHY → Michael Porter’s most important research has been focusing in competitive advantage. Well, in a world with a lack of resources, specifically at early stages, setting the purpose and clearly defining your why is the first step to build your competitive advantage.
Again, there are plenty of aspect that you would consider while building or analyzing a company culture but the purpose is, in my humble my opinion, the most important one. This will determine what values your company stands for.
HOW → While analyzing operations in any possible investment, question yourself whether it is impacted by the purpose of the company. If so, you have found a competitive advantage in a company that will outperform over its competitors.
WHAT → It is the consequence rather than the driver.