12 May Three Missteps That Can Tank Your Company
Sixty-five percent of businesses fail within their first 10 years. So, what is a common thread between these unsuccessful companies? While a lack of strategy or execution can cause that failure, a lack of intentionality and emphasis on their people and culture are most often the underlying reasons. Few factors contribute to sustainable business success more than these.
Keeping up in today’s world of work is no easy feat, but there are several missteps that can easily sabotage success. Here are three common things that can tank your company.
Misalignment between culture and strategy
Every company has a culture, whether it’s intentionally curated or not. The culture is the set of values, beliefs, and practices that guide the behavior of employees within the company. On the other hand, strategy encompasses the plan of action that a company takes to achieve its goals. Culture can be a major driver of employee engagement and productivity, as well as customer satisfaction. In fact, culture often trumps strategy when it comes to influencing what gets done. Consequently, when culture and strategy are misaligned, strategy often goes out the window.
One of the common things we see when engaging with clients around culture work is that their stated values don’t line up with the strategy or how work is done. Clients may say that they have values of collaboration and creativity, but those are not the behaviors that you see demonstrated. In fact, what I often see is the opposite. What gets rewarded gets done. So instead of people working together and innovating around new ideas, a culture of competition and individualism prevail. Big sales goals get rewarded despite the fact that those individuals did not collaborate or even worse, demonstrated the very opposite of the values the company was ascribing. Leaders may try to brush the bad behaviors away by saying “it’s just how they are” or “they are incredibly valuable to the company, we can overlook some of their behaviors.”
Unfortunately, employees are often confused by the lack of alignment in what the company says and does. It also sows distrust in leadership leading to employees feeling disconnected and disengaged. Ultimately this leads to difficult retaining talent and challenges with recruiting talent to the organization. Being intentional in defining culture and walking the talk is key to mitigating this issue.
High-level relationship dysfunction
Another area that we see often derail a company’s success is the relationship among the c-suite/leadership team members. Sometimes we see dysfunction between the co-founders or the CEO and COO. All of these scenarios cause problems and impact the execution of strategy.
These dysfunctional relationships can manifest in various ways. For example, if there is a lack of trust between these individuals, they may not work well together, leading to miscommunication, conflicts, and missed opportunities. Similarly, if there is a lack of communication, the CEO may not be aware of what is happening on the ground, leading to decisions that are not well-informed. Silos and fiefdoms can form, information is used as power versus sharing and collaboration and innovation is stifled. Two co-founders at a former client had a toxic relationship that spilled over into the organization. The co-founders would overrule each other publicly and behind each others’ backs, they spoke disrespectfully of each other and their behavior caused people to take sides, others to bury their heads and try to ignore the dysfunction. Product delivery was delayed, sales teams were rudderless, and it was challenging to fill the seats vacated by the revolving door.
Debate and discussion are good to see in organizations. Dysfunctional behavior and communication are not. It is critical to invest in building trust and open communication among members of the leadership team. Leaders also need to be aligned in terms of the vision, culture and strategy for the company. Often leaders need help through individual and team coaching to learn new behaviors, mitigate derailers and build a high functioning leadership team. Coaches can help the leaders develop self-awareness to see how their behaviors are impacting the business outcomes and help them build effective tools to redirect to more positive habits.
Chasing profits over purpose
While making a profit is essential for any business, focusing solely on profits can have negative consequences. When companies prioritize profits over their purpose, employees and ethics, they risk losing sight of their mission, values, and the needs of their employees as well as their customers. Chasing profits over purpose can manifest in various ways. For example, I’ve seen companies focus solely on increasing their top line revenue, and as a result they may cut corners, compromise on ethics, or sacrifice customer satisfaction to achieve their goals. In these types of organizations it is hard to innovate, take risks, make mistakes, it’s hard to feel psychologically safe, and you can’t do your best work. This often leads to burnout, high turnover, disengaged employees, negative customer feedback, loss of trust, and ultimately, a decline in revenue.
There is a better way to operate. Companies that embrace a holistic approach to their business strategy and focus on people, purpose, planet and profits often outperform their competitors. Rather than being the target, profits come because you are doing the right things, leading the right way, putting people, purpose and culture first. Our current and future talent live in a rapidly changing world – they are no longer willing to tolerate outdated cultures and work for companies that have a singular focus on the bottom line to the detriment of all else. Research shows that customers are willing to pay more for products and services from companies that are committed to positive social and environmental impact. Making the shift from a profit to purpose focus is imperative for companies to succeed – and also to create a thriving, inclusive workplace where innovation and creativity abound. Business leaders who realize that purpose drives profit are far more likely to build sustained success and achieve their goals..
In order to avoid becoming a statistic of the 65% of businesses that fail within their first 10 years, it’s essential to prioritize your people and culture. By avoiding these three common pitfalls – misalignment between culture and strategy, high-level relationship dysfunction, chasing profits over purpose – you can set your company on a path to success. Remember that investing in your employees and cultivating a positive workplace culture will pay dividends in the long run. By doing so, you can build a thriving and sustainable business that will stand the test of time.
Shaara Roman is author of The Conscious Workplace and Founder of The Silverene Group