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Corporate Culture Is A Powerful Force

November 24, 2009

With all the attention given to the subject of “corporate culture” in recent years, it is important for managers to understand the concept. It is equally important for managers to understand the factors that influence the development of a “corporate culture”.

The culture of a society at large consists of the acceptable ways of human interaction that are transmitted from one generation to the next. Every business, regardless of how big or small, establishes its own culture and its own internal value system. It is shaped by the behavior that gets rewarded and punished, who gets hired and fired, the reasons for praise or criticism.

While the concept of “corporate culture” may at first seem too esoteric for a smaller business, the definition of “normal, acceptable behavior” is important in the privately owned business because of the enormous impact of the owner/manager. “Cultures” are rarely reduced to writing and they will vary from business to business. They are communicated informally by words and deeds. Once established, a “corporate culture” is not easily altered.

The owner/managers of a closely held business need to understand Leo’s Law of management and how it exerts a powerful impact on the development of “corporate culture”. Simply stated, Leo’s Law says “whatever gets attention, draws attention”. The magnitude of the attention that is drawn to a particular subject is directly proportional to the perceived importance of the individual who initially focused the attention.

The practical application of Leo’s Law in the business world is that whatever you, as an owner or manager, pay attention to, the rest of your employees will eventually pay attention to also. However simple and obvious that sounds, the everyday implications of Leo’s Law are often not fully understood.

Businesses exist for the benefit of their customers. In the process of delivering an economic benefit to their customers, the owners of an enterprise create economic value for themselves. When the owner/manager gives attention to the interests of the customer, the rest of the organization will develop a customer oriented culture. If the owners of a business demonstrate to their employees that the business is being run primarily for the benefit of the owners, the opposite effect will take place.

If you want your employees to respect your business, you must respect it first. Too often management sees itself as exempt from the policies that it establishes. Special privileges are counter productive to establishing a healthy corporate culture.

Long term, clear, and consistent actions are the key to establishing a healthy culture within an organization. When conflicts exist between words and deeds, the resulting confusion will have a negative impact. A manager, concerned about productivity and employee morale, berates his supervisors for not taking better care of the employees. His words convey one message, his actions a far different one.

If your ritualistic first activity of everyday at the office is to have coffee and to read the paper, you can be certain that your employees will quickly learn the importance of having the paper and coffee ready for you each morning. Your first subject of attention has drawn the attention of others.

The owner of a small manufacturing business was hard working and expected the same effort from his employees. He regularly worked late. While the boss never specifically asked others to work late, it was apparent that those who did seemed to get special attention. To newer employees it was soon obvious that the “corporate culture” encouraged working late whether there was work to do or not.

As the manager of a business, your time is your most precious resource. Don’t spend time on low impact matters. How you spend your time communicates a message to your employees. They’ll pay attention to what you pay attention to. What you pay attention to will take on an increased importance within your company. That importance will become part of your company’s “corporate culture”.

If your want your company to be innovative, pay attention to innovation. Listen to new ideas, reward the innovators, and give encouragement to those who experience failure in the process of experimentation. Over time your “corporate culture” will encourage innovation.

Every organization will develop its own culture. Leo’s Law is at once a powerful tool and a heavy responsibility for a manager. In the final analysis, every business gets the culture it deserves. “What gets attention, draws attention.” If you don’t like what people pay attention to in your business, start by examining what gets your attention.

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