04 Oct Bad Company Culture: The Warning Signs
Company culture is important. It affects employee engagement, differentiates your company from competitors and drives success. For small companies, finding the time and energy to focus on defining company values and culture may seem a luxury. But whether it’s consciously cultivated or it grows organically, every company has a culture. Whatever the origins, it’s important to understand what your company’s culture is — not just on paper, but in practice. While a strong culture has many benefits, a bad company culture can wreak havoc. No matter how virtuous a company’s stated values and principles are, if the reality is an environment where unethical behavior can take hold, big problems await We’ve identified the signs of a bad company culture and some culture pitfalls to avoid.
The Plan vs. Reality
There is no shortage of companies that are dragged up to Capitol Hill to testify before congressional committees about actions, mistakes, or cover-ups that harm consumers. Consider the examples of Wells Fargo, Volkswagen, and GM. Certainly the leaders of these seasoned companies did not seek to foster organizational cultures that value cheating customers, harming consumers or deceiving the public. Yet it is not hard to trace these companies’ crises back to cultural issues that did indeed exist at the heart of their organizations. How did things go so wrong?
An examination of how companies find themselves in crisis often relates back to some common themes that promote undesirable, yet somewhat predictable, behavior among employees.
Three Culture Pitfalls to Avoid
In companies that don’t embrace open communications and feedback, a culture of silent acceptance can develop. If employees are ignored or, worse, ridiculed when sharing ideas, reporting problems, or questioning procedures, then why would they bother? They may work around the problem, but it remains unsolved. They are more likely to decide it would behoove them personally to do nothing — just keep their head down and keep quiet, contributing to a bad company culture. In this environment, fixable problems, poorly managed systems, and bad behavior can continue undetected by higher ups.
Certainly every business wants to maximize the productivity and output of its workers. However, if the pressure to perform is too intense and expectations too lofty, employees may make the calculation that it’s preferable to cheat or lie, rather than to fail. If budgets are unrealistic, will employees make the right decisions about where to cut corners? If sales goals are too high, what steps will employees take to make their numbers look good?
No one is perfect and people make mistakes. A healthy company culture does not promote blame and punishment, but rather accountability and improvement. If errors are treated as learning opportunities, employees will be more comfortable owning their mistakes. In turn, there is less risk to the company of cover-ups that can spell disaster.
Proactively defining your company’s culture is a worthwhile exercise that can have numerable benefits. As important as determining what your culture should be, is understanding what your culture is and where the risk of dysfunction lies. Then you can make the adjustments necessary to make sure your culture, both in plan and practice, is in sync with your values and vision for success.
We’re extremely proud of the company culture we’ve created at Focus Data. If you want to talk about it, get in touch!