October 31, 2014

5 Warnings About So-called Corporate Culture

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There’s a lot of good web writing on corporate culture lately.  Business Insider has a series by Small Business Trends regular Lisa Barone on corporate culture and innovation. And Tony Hsieh of Zappos set off a wave of blog posts with his post about culture on Inc. There’s some great advice here. I really like Lisa’s list of major factors in corporate culture and innovation. And who’d want to argue with Tony and Zappos’ success?

But meanwhile, good as that advice is, I can’t resist adding some warnings about old-fashioned implementation, particularly as corporate culture applies to small business.

1. Culture isn’t Corporate in small business

We shouldn’t write about corporate culture in small businesses because small businesses do have their unique cultures but they aren’t corporate. There’s a real difference between culture as you and I deal with it in small business, and corporate culture in larger businesses.

Larger companies can create and manage corporate cultures over the long term because they’re a mosaic of strategies and policies. When I consulted with Apple Computer, IBM, Xerox, and Hewlett-Packard in the 1980s and early 1990s the cultural differences were obvious, even though they were all big companies in the same industry. It’s not for nothing that research and the academic discussion focuses on culture in larger organizations. Corporate culture is something the upper levels of management can decide on and dictate, if they’re effective, throughout the organization. Not that it’s easy, but it’s possible.

2. You can’t fake it

While maybe the big companies can influence culture over time with high-level decisions, in startups and small business the culture is determined by owner-operator-manager actions, period. It’s actions, not words. It’s what ideas win, and whose ideas win, who and what rises and who and what falls. Do you give that customer a replacement product? Do you refund that money? Does the person who’s always late get held accountable? Do you listen to suggestions?

You don’t get to read a list of corporate culture tips and decide to change yours. You have to change yourself first.

3. Just being nice doesn’t cut it

This one is subtle, hard to explain well, but also critical. The literature on corporate culture is a lot about humanizing the large corporation because there’s the assumption in larger organizations that the individuals, personalities, beliefs and such get lost in the larger numbers. Since business metrics and cold analysis are assumed, culture in business literature sounds like counter culture: Lisa Baron’s advice, for example, includes “abolish hierarchy, support mistakes, and give people access to information.”

In small business, in contrast, we tend to emphasize the personal and forget the metrics and analysis. Most of us confuse small business culture with me being liked. As I look back on may own small business management between 1995 and 2007, the 1960s counter-culture values I have didn’t optimize the business side of small business culture. I wasn’t comfortable enough with wielding authority. It seemed like everybody liked me well enough, but we needed more hard-nosed management. We missed the real work ethic at crunch times. Well, actually, we missed the crunch times. My daughter is doing a better job at this, but it’s hard. We needed to be more hierarchical, harder on poor performance, and more careful about access to information.

It would be nice if everybody loved their work, but nobody loves it like you do, and business has to go on, whether they like it or not. What does your small business culture say about that?  I’m not saying that nice guys (guys is both genders in this case) finish last, like the cliché would have it but they don’t finish first that often. To  make a team work, you need to be somewhere in the middle between nice and hard-nosed, and to waver between the extremes with a lot of fine tuning, and a lot of change.

4. Leadership and management styles don’t generalize well

And it gets worse. This is an offshoot of point #3 above. The right mix of hard-nosed and humanized will work for one person, but not the next. Some people need no reminders at all, and others need constant pressure.

It’s not just people who are so annoyingly individual, unpredictable, and hard to categorize; organizations, and groups within organizations, have that same quality. One kind of leadership works for one person, in one job, and not at all for the next person, or the next job. Your creative people need inspiration and flexibility, except for those who need constant badgering. Your on-the-phone with customers people need tough scheduling and discipline, plus empathy, except for the ones who don’t.  You, meanwhile, are the same person all the time, and that’s what determines your small business culture.

What you do will be imitated in alarmingly unpredictable ways.

5. Businesses, people, and needs change over time

Sad but true: the self starter of 10 years ago might be the problem today. That person who didn’t need management back then might need a lot of management now. And it’s 10 times harder to do right after you’ve established your styles and relationships and expectations, spoken or not.

So the culture that got you there might not be the one you need to keep you there. Have you noticed how often the founders who built the company aren’t the same people to take that same company up the growth ladders? This is part of the reason why and why not.

5 Comments ▼

Tim Berry


Tim Berry Tim Berry is Founder and Chairman of Palo Alto Software, Founder of Bplans, Co-Founder of Borland International, Stanford MBA, and co-founder of Have Presence. He is the author of several books and thousands of articles on business planning, small business, social media and startup business.

5 Reactions

  1. Very nicely said. As I have worked in both small business and corporate settings, the culture is definitely different. I can relate to all of these points.

  2. The culture in a small business is largely a reflection of the personal beliefs of the founder(s). It’s usually not formalized and preserving the culture as a business grows can become a very formidable task.

  3. Tim: Thought provoking post. This topic is dear to me as a former student of organizational leader in my business administration studies at Southern New Hampshire University and as an individual interested in business philosophy. I have written about this issue under the WorkLife section on my new site.

    I am interested to talk more about this area sometime in the future. Do you want to be a guest on my new podcast show on Blog Talk Radio?

  4. Tim,

    Speaking of culture, I bet that your HQ office (Non-corporate of course) had some cool vibes going, when you were there day to day.

    As a matter of fact, it’s too bad that the Flip camera wasn’t around a few years ago….

    Great post!

    The Franchise King

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