Is Your Company Culture Broken?

PHoto Credit: Getty Images

Photo Credit: Getty Images

I read with interest A Glaring Example of a Broken Company Culture on Inc. that prompted me to reflect upon my first turnaround experience sometime back and the absolute import of Company Culture to Success. While the Inc. article is about the B-C Restaurant industry and my first turnaround success was in the Advertising industry the parallels are virtually identical – customer service and attitude, Company culture rings through loud and clear, whether you are fully cognizant or not. The Inc. article is a worthwhile read hopefully the following as well.

A Short Turnaround Success Story

This division of an Advertising Industry giant had become the only unprofitable segment in the Company on the heels of earlier successes. The market was growing, where had they slipped off the tracks?

Clearly over time management had unwittingly cast a blind eye to: client/project profitability/margin (keeping a keen eye on margin is key to EVERY business’s SUCCESS), redundancies (often more a problem that creeps in during high growth), hiring practices (Hire the Best) and the like.

I was brought in to work with the Division President to right the ship. There was seemingly resistance at every level – from the quantifiable obvious as margin vs industry to staffing ~ three $40K employees are not the solution that calls for the experience and expertise of one $120K manager but can appear to be the solution if you’ve lost your winning perspective to pricing and importantly price positioning ~ I can guarantee you that there is a clear difference in perception of cost between a contractor that promises delivery on time and materials and comes to you with his hand out for 10 consecutive weeks @ $5K vs. a fixed fee proposal of $50K that you either accept or reject at the outset.

Yet why resistance? It was squarely in management leadership and company culture that had become one of “being right” and “losing” … if you have said you will never return to profitability, if you resist even the most obvious changes to return to profitability, you have virtually guaranteed you are right, you have not returned to profitably, yet you have clearly lost clear perspective of the goal. The problem had become a mindset from the top down of a “losing” attitude – I told you we would would never be profitable again – we are not profitable – ergo I am right, is a self fulfilling prophesy that misses the goal by a mile.

Fortunately I had earned the confidence and favor of our CEO. We in the Division implemented suggested initiatives that I won’t expound in full detail but happy to discuss if you’d like – I promised a short story – but did include virtually a complete restructuring due to either redundancy or more materially, cases of “losing attitude” that didn’t appear curable …. and I didn’t have to terminate my Division President boss in the process …

If your business isn’t where you think it should be it very well could be in your Company Culture … it might even be in the mirror ….

PS – Monthly deficits that had approximated $100K were eliminated by month 13 or 14 of turnaround effort, gross margin improved nearly 80% and bottom line, year two, nearly 250% vs. two years prior. That’s better than a sharp stick in the eye?



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