Early this year, during a company retreat, the CEO of a successful startup asked a question: “if we should die today, what would be the cause of our death? It was a rather unexpected question and a puzzling one too.
A lot of people gave varying answers as to what could possibly kill the company. I remember vividly answering that leadership team losing touch with her people could be one surefire way to kill a great company. My answer was largely based on a company’s culture. Culture is at the heart of every successful company. And this culture oftentimes has its roots in the company’s values. And I dare say that culture is one of the hardest thing to build, yet the easiest to destroy.
In the early stage of a company, it’s super easy for the CEO and most people in leadership to keep tabs with almost everything that is happening in the company. This includes memorizing team members names and having a deeper personal connection with them, easy to coordinate all-hands and town hall meetings. But as the company grows bigger, especially for high growth companies, the quest to succeed and dominate begins to take center stage and every other thing takes the back burner.
This is particularly true for companies who are in a highly competitive market. For a few weeks now, I have been reading Onwards, Howard Schultz’ account of How Starbucks fought for its Life Without Losing Its Soul. In Onward, Howard narrates the story of how Starbucks came to be. How a trip abroad brought him in contact with the intimate experience barista had with their customer. How an idea around setting up a café that sold coffee and not merely coffee beans within his former employers business brought around significant growth and profit. But the grow-fast-quick pace of the company — 20% year-on-year — which was largely fueled by the quest to keep Wall Street happy made the company deviate from her core competence — making the best coffee — into uncharted territories; movies, music, snacks, etc.
While this wasn’t necessarily a bad thing, coffee had always and will always be the north star of the company. With this new direction, the company’s culture took a hit and Howard was forced to return as CEO in 2007 after serving as the company’s chairman.
Upon his return, friends and well wishers sent Howard congratulatory messages and in the deluge of messages that came pouring, one stood out. It was from a regional cordinator named Sandi Torrente from South Florida. In Sandi’s message, she wrote: “I am an eight-year partner who started as a barista and this has been a tough year. I have always loved my job, but this year, not so much! I watched tenured partners leave the company and my optimism has been whittling away. I know how hard our partners in the stores work. We would not have a job if it were not for them. But it saddens me when I walk into our stores don’t legendary service or a greeting. It is not the fault of the baristas working behind the counter. It is the responsibility of the leadership team to keep our culture alive, growing and thriving. It will be a long hard road back; I am proud to count myself among those willing to do whatever it takes. Thank you for providing me with an uplifting day!
What I am particularly interested in Sandi’s message is how she acknowledged management’s responsibility to hold the culture together. Culture is subtle, it flows, it informs how staff treat customers’ and it influences customers perception about a brand.
I also believe another thing that can become an existential threat to a company is when the company gets drowned in its own success and stops listening to its own music. Paul McCartney, a member of the one time popular band, The Beatles, attributed the bands decline and eventual failure to a phase in its history. In 1965, the Beatles played in the New York Shea Stadium in the presence of 55,000 screaming fans. The atmosphere was so electrifying they couldn’t even hear their own music. To put it more succinctly, their art was drowned in their popularity. This phenomenon is also what makes companies to stop innovating. They get high on their own supply.
If you take care of the culture, the brand will take care of itself.
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