Every organization has a culture.  The only question is, has the organization’s culture evolved on its own without any real thought or guidance from the organization’s management?  Or has it been carefully crafted and nurtured as a guide for how the organization intends to conduct itself?  Most organizations will claim to have a strong corporate culture, but in many cases, that “strong corporate culture” is nothing more than a meaningless collection of words and platitudes that don’t truly reflect the way the organization behaves from one day to the next.  As the owner and/or CEO of your organization, you are the keeper of your culture   If you try to pass off this responsibility to HR or to someone else further down the food chain, you will fail.  However, if you are willing to make a genuine commitment to creating and maintaining a strong and vibrant culture, you can make that happen, but only if it has your unconditional support and has your fingerprints all over it.  For more on how to create a real, breathing, functioning culture, please continue reading below.

“A company’s culture is defined by what it tolerates.”

So what’s the big deal about culture?  Why do we really need a strong, cohesive culture?  What does it really do for us?  Recently, the Daily Herald Business Ledger convened a panel of “Leaders from businesses known for their excellent work cultures to discuss what makes a company a place people want to work.”  There’s the key: creating “a place people want to work.”  Not a place they have to work, but a place they want to work.  A strong, vibrant culture creates a work place where people can be with friends and colleagues who support one another and who share common beliefs and values.  But cultures are fragile, difficult to establish and even more difficult to maintain.  Still, a strong culture can be one of a company’s most valuable assets.  Below are some thoughts about how to build and nurture your culture.

1. A company’s culture is simply the sum of the values the company wants to follow and uphold . . . think of it as a sort of Operating Manual for your company.  So if you’re starting from scratch, you need to first select the values that you want to define your company.  If you already have some values in place, review them to make sure they’re still applicable and appropriate.  Don’t go crazy here by creating a list of 100 values . . . you should try to hold it to 10 or fewer.  Find ways to involve, not only your management team, but all your employees as well, in your values selection process.  In the end, the values must be a reflection of the owner/CEO’s values, but still, everyone will be more likely to support and embrace the culture you’re trying to create if they have a hand in crafting it.  Look for values that have special meaning for you and your company, and that accurately define the way you expect the company to operate.  Commit the values to writing and post them prominently where employees, customers, and vendors will see them.
2. Once your culture’s values have been enacted, you’ll need to find ways to keep them fresh and top-of-mind for everyone in your organization.  Talk about them in staff or departmental meetings.  Select one of the values and talk about what it really means.  Talk about what it looks like when you see it in practice.  Find ways to reward and recognize individuals who go “above and beyond the call of duty” to honor this value or that.  As part of your employee performance review process, evaluate how well an employee adheres to the company’s values.  Counsel employees when they need to work on some of those values.
3. As with any workplace change, there will be people who embrace the culture you’re trying to create, and those who don’t.  Of those who don’t, many will uphold the new values even though they might not agree with them, and that’s OK.  Those people may not help create the culture you want, but they won’t hurt it either.  However, there may be others who don’t see the point of all this culture stuff, who “like the way we’ve always done things around here,” and who will actively try to subvert your efforts to enact it.  In those cases, you’ll have little choice.  You cannot enforce your values selectively.  You cannot say, “Well, you know, old Bob’s been around here for a long time and is sort of set in his ways, so we’re giving him a pass on joining our culture.”  No, you can try to advise or counsel Bob on the merits of a strong, values-based culture, but in the end, if Bob can’t (or won’t) get with the program, he will unfortunately have to seek employment elsewhere.  As the quote above suggests, if you tolerate behavior that is at odds with your values, then you really don’t have those values.
4. You and all your hiring managers need to make a total commitment to hiring only people who will be a good “fit” in your culture.  You may be able to find testing instruments to help you determine if a candidate’s values align with the company’s, or if you’ve got strong interviewing skills, you may be able to learn the same thing through an interview, but however you do it, you and other hiring managers need to be faithful gatekeepers who refuse to let anyone into your tribe who does not belong.  This will test you.  From time to time, you will be absolutely desperate to fill a particular position and willing to settle for anyone who can fog a mirror.  Don’t give into the temptation.  Employ workarounds to keep the position open until you can find that candidate who is demonstrably a good fit.  And despite your best efforts, you will still make hiring mistakes.   Don’t compound that mistake by delaying what you must do to correct it.  Acknowledge the mistake and as quickly and humanely as possible, correct it.

To summarize, to build and maintain a strong, meaningful culture, you need to:

• Make an absolute commitment to it, starting with the owner/CEO.
• Carefully establish the values that will make up your culture.
• Find ways to keep your values relevant and top-of-mind throughout your company.
• Over time, weed out people who don’t fit your values and are detrimental to them.
• Make “culture fit” a centerpiece of your hiring practices.

Establishing a robust culture is not easy, nor is it quick.  It will take a lot of effort and a lot of time . . . possibly years if you’re starting from scratch.  But if the result is a place people want to be, a place where people will bring their A game, and a place where people will willingly devote discretionary time and effort, the heavy lifting you did to create it will be well-worth it.

In our previous posting, we talked about the key role you and your management team play in retaining the best and brightest of your employees.  We noted that the main reason, by far and away, that people leave their jobs is because they can’t stand working for whoever their boss is.  That “boss” could be the CEO or a Vice President or a department head, or a shift supervisor . . . it really doesn’t matter.  If the relationship between the employee and whoever he or she reports to is strained, he or she will stick around only long enough to find another job.  Considering today’s record-low unemployment levels, finding that next job isn’t going to take long.  So what can you and your management team do to prevent good people from heading for the exits?  That’s what we promised to discuss in this posting, so for that discussion, please continue reading below.

7 Leadership Practices That Will Reduce Employee Turnover to a Minimum.

Begin with the understanding that leadership is all about relationships.  In the absence of a good relationship, employees may do what their managers tell them to do, but only grudgingly and without much enthusiasm.  Without a strong relationship with their managers, employees will do the bare minimum that is required of them, but you won’t get any discretionary effort from them.  They will be nine-to-fivers, and that’s all.

So how do you forge the sort of relationships between manager/leaders and their employees that will cause the employees to follow where their managers lead, not because they have to, but because they want to?  That’s the key question.  However, while we can’t answer that question exhaustively or in detail here, we can offer seven broad leadership concepts that will help guide you and your managers in the right direction.

1. Build trust.  Trust is the bedrock of leadership.  People won’t willingly follow you anywhere if they don’t trust you, nor will they particularly enjoy working for you.  So don’t make promises you can’t keep, and when you do make promises, deliver on them consistently.  Honoring commitments on a sporadic basis won’t cut it.  When you make a commitment, whether big or small, you need to honor it, not just sometimes, but every time.  Insist that your employees do the same.
2. Don’t be a “boss.”  Don’t be a cop on a beat always trying to catch someone doing something wrong.  Be a coach and mentor to the people in your charge.  Don’t be a micromanager, but do be available when your people find themselves in unfamiliar territory and need some help.  Understand their aspirations, ambitions, and goals and show them the path to achieving those.
3. Give credit, accept blame.  When things go well, give credit to your team.  When things don’t go so well, be their protector and defender by taking responsibility yourself.  Make sure they know that you have their backs and that you’re not going to throw them under the bus at the first sign of trouble . . . that you stand between them and other authority figures within the organization.  This is another behavior that will help build trust.
4. Make your employees feel like colleagues.  People are looking for more than just a job.  They want to be valued members of an organization.  When problems are being discussed and decisions made that affect their work, they want a seat at the table.  They want to know that their thoughts, ideas, and opinions are heard and valued.
5. Focus on what, not how.  Employees want as much freedom and self-direction as possible.  Give them credit for being intelligent adults who can manage their time responsibly.  Judge them by the results they are getting, by what they’re accomplishing.  As long as they are producing quality work on time, who cares when or where or how they’re doing it.
6. Give your people more than just a workplace.  People don’t want a workplace.  They want a community where they have friends, colleagues, and a sense of belonging.  In short, they want to be part of a tribe . . . their tribe.  Help them create that tribe.
7. Give regular feedback.  Forget about the traditional “annual review.”  People need more timely feedback than that, so give it to them.  On a regular basis, tell them what they’re doing well, and where they need to improve.  And use the occasion to ask for their feedback on your own performance.  Are they getting what they need from you?  Where would they like to see you improve?

Go to a bookstore or to your library, and you’ll find shelf upon shelf of books about leadership.  And rightly so.  It’s a vast topic that is crucial to all organizations . . . social, civic, business, military, or political, it really doesn’t matter.  Good leadership practices are essential to all of them.  Here, in this posting, we could only deal with the most basic leadership concepts in the broadest possible terms with little or no detail.  But hopefully, it provides a framework for leadership against which you can compare your own leadership practices.

Adopting these seven leadership practices will not put you into the Leadership Hall of Fame, but they will earn you a reputation as a good place to work, and a place your best and brightest won’t want to leave.

The beginning of a new year is a time for reflection.  It’s a time to consider what’s working and what’s not . . . what needs to stay the same, what needs to change.  If there is one thing we did last year that we could do over again, what would that one thing be?  And how would we do it differently.  And what better outcome would we expect if we had done it that way in the first place?  What about the coming year?  What challenges do we expect to face, and how will the lessons of last year help us deal with the challenges of this year?  Coincidentally, we recently had an opportunity to speak with Lisa Gilbert, President of the Schaumburg Business Association, so we asked her what she’s hearing from her members.  “What are business leaders worrying about?,” we asked.  “What are their concerns as we enter 2020?”  For her answer, and for some thoughts about her answer, please continue reading below.

Employee turnover is not a human resources issue.  It’s a management/leadership issue.

Employee turnover.  That’s what Lisa Gilbert told us seems to be uppermost in the minds of her Schaumburg Business Association members.  She didn’t say, “Hmmm, let me think about that.”  She answered without hesitation as if she had been expecting the question.  She hadn’t surveyed her membership on the question of employee turnover, but still, she does talk with members every day, so she has a pretty good sense of what’s on their minds.

Considering we’re in a period of extraordinarily low unemployment, it’s not surprising that business leaders are worried about holding onto their best and brightest.  During the Great Recession a decade ago, the opposite was true.  Employees weren’t leaving because there was no place to go.  Most companies, if they weren’t laying people off, were at least declaring a hiring freeze.  Obviously, that’s not the case today.  If an employee is unhappy in a job, he or she probably needs to look no further than the company next door to find a new one.

So what should you do?  How do you hold onto people who may be eyeing what they perceive to be greener pastures?

First, let’s agree that you’re not going to hold onto everyone.  Some defections are preventable, but some are not.  For instance, there isn’t much you can do when an employee is leaving:

• due to a health issue
• for retirement
• to take a job offer that you simply cannot match
• to pursue work in a different industry
• because his or her family is moving out of the area

So our retention efforts should be focused on departures that are preventable.  That is, people who are leaving simply because they can’t stand working for us any longer.

You probably already monitor your compensation and benefits programs to make sure they’re competitive, but if you haven’t done that lately, do it now.  It doesn’t matter how many ping pong tables you put in the break room or how many Friday afternoon pizza blasts you have, if people feel they are not being fairly compensated for their work, they’re as good as gone.  But let’s assume that’s not an issue . . . that your pay and benefits are fair and competitive.  Then what?

The old axiom where employee turnover is concerned is this: “Employees don’t leave their companies.  They leave their managers.”  There is also another concept that applies here which is: “You can manage things (equipment, schedules, buildings, etc.), but you can’t manage people.  People need to be led.”  Think about that.  Do you really believe people get up in the morning saying to themselves, “I can’t wait to get to work where I can be managed.  I love having the boss breathing down my neck, watching my every move, and pushing me to work harder and faster.”  No, of course not.  People don’t like to be managed and will resist being managed.  But people do want to be led and will accept, even seek out, enlightened leadership.  Therefore, your first line of defense against employee turnover is you and your managers.  If all of you are following sound leadership practices, the amount of preventable turnover will be minimized.

There is a fallacy held among many small business owners that if you’re in a managerial position, you’re automatically a leader.  Or that if you’ve got a college degree, you’re qualified to step right into a leadership role.  Or if you’ve been with the company for five years or more, you qualify as a leader.  Wrong, wrong, and wrong.  While it’s true that some people are natural leaders, the vast majority of us are not.  Leadership is a skill that can be learned through a formal training program or through informal coaching and mentoring, but it does have to be learned and practiced and honed.  It doesn’t just happen because you’ve got a managerial title or a college degree or few years of experience on the job.

Employee turnover is very, very expensive.  Productivity takes a serious hit.  You not only have inexperienced people who will need some time to ramp up to the productivity level of their predecessors, but you also have experienced people who can’t be as productive as they normally would be because in addition to doing their own work, they’re burdened with helping to train the new people.  When productivity suffers, so does profitability.  Quality also suffers because new people make more mistakes than the old hands they replaced.  So if you’ve been telling yourself that you can’t afford leadership training, it’s hard to imagine that leadership training would cost anywhere near what turnover is costing you.

As noted earlier, you can’t stop all turnover.  You probably wouldn’t want to even if you could.  Some turnover is a good thing because it brings in new people with fresh ideas.  But you do want to prevent good people from leaving your organization just because of leadership failures amongst your management team.  So the challenge is, how do you recognize strong leadership potential in people before you put them into positions of authority?  And then, how do you nurture and develop that potential into leadership skills that will help prevent valued employees from walking out the door?  Those are the questions we’ll explore in our next posting.

Meanwhile, if you’d like to explore ways to develop leadership skills specific to your organization, call me . . . always glad to talk and to help where I can.