The Power of Culture Surpasses that of Strategy

The importance of a healthy corporate culture cannot be overstated. This lesson was brought home to me recently when I encountered a business that was struggling due to a lack of a positive culture.

The company was a small manufacturing business that had been in operation for over 20 years. Despite having a clear strategic plan and a well-structured board, the business was failing.

Over the past few years, staff turnover had risen to unacceptable levels, customer complaints were increasing, and the company was losing money. It was clear that the business had lost its way. But what had caused this once-thriving company to falter? As I dug deeper, it became apparent that a toxic work environment was to blame. The CEO and upper management were distant and unapproachable, and employees felt undervalued and unappreciated.

In hindsight, it was clear that the CEO had not made building a positive culture a priority. Instead, he had focused solely on implementing his strategic plan. This short-sighted approach ultimately led to the downfall of the company.

Upon reflection, it was apparent that the CEO had made several crucial mistakes. Firstly, he had not sought independent advice when it came to management and ownership succession. Instead, he relied solely on his own instincts. Secondly, he had failed to recognize that the employees were the company’s most valuable resource. Instead, he viewed them simply as a means to an end. Finally, he had ignored the importance of non-financial factors, such as culture and goodwill, in building a successful business.