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Academic Insight

There’s a wide breadth of information out there in academic literature about running a company. That’s why we wanted to provide academic answers to real life business questions so we turned to  Shontarius D. Aikens, Ph.D., Assistant Professor of Management at Offutt School of Business at Concordia College, to give us some academic insight.


QUESTION

“Our company is about 10 years old. We’ve grown the company through bootstrap efforts and have made plenty of mistakes throughout the year, which has affected morale. We’ve started going through an expansion, which is exciting but also terrifying. We’ve added about 10 new employees in the last year and will be adding another five or six more employees. How can we continue our growth, have high expectations for everybody but also grow our company culture through this period of growth?”

ANSWER

First off, let me congratulate you on reaching 10 years of being in business. Statistics indicate that 96 percent of businesses fail by the 10 year mark. So given the fact that your organization is still in existence and planning on expanding is a significant milestone that should be acknowledged and celebrated.

Now to your question. There’s so much packed into this question that I need to break it down into three different parts in order to answer it.

#1: Continuing Your Growth

Based on your question and the fact that your organization has been in business for 10 years, it appears that your organization has a sufficient business model that delivers value to your customers. When I use the term business model, I’m referring to how an organization creates, delivers and captures value. While you shouldn’t completely abandon a business model that’s made your organization successful, it’s important to make sure that your business model is capable of evolving. Why? Because history can point to many examples in which a company that was once a market leader failed to adapt their business model to meet customer preferences or societal changes. And most of the changes didn’t come overnight; they were subtle changes that were oftentimes ignored or dismissed. A successful business model today could perhaps become outdated sooner than you think. So a delicate balance between being static and dynamic is needed.

For your organization to continue its growth in light of this, I have two recommendations:

  • START, STOP and CONTINUE feedback system. This is a simple way to engage customers (as well as other stakeholders) that asks three questions via online survey: 1) “What should we START doing?” 2) “What should we STOP doing?” and 3) “What should we CONTINUE to do?” By engaging your customers and gathering feedback, not only can you stay in tune with customer preferences, you will become aware of new opportunities to provide your customers with additional value that could fuel your company’s growth goals.
  • The Business Model Canvas (BMC) tool. Jim Clifton’s book The Coming Jobs War makes a strong and definitive argument as it relates to creating growing organizations. He states: “Regardless of the size of the company, the business model really is everything.” The BMC tool is a one page document that graphically illustrates and displays the nine different components of an organization’s business model. By gathering feedback from stakeholders, your organization can utilize this tool to make informed decisions on possible changes that may need to occur to your existing business model. Udacity.com’s course titled How to Build a Startup and the website Strategyzer are two excellent sources with free information, training and tutorials on how to utilize the BMC to assist you in growing your organization.

#2: High Expectations For Everybody

In Dan Pink’s TED talk titled The Puzzle of Motivation, he makes a compelling argument that there is a mismatch between what science knows and what business does when it comes to motivation. He suggests that high performance can be linked to a person’s intrinsic motivation level. Having employees that are intrinsically motivated leads to employees who are committed to the organization (going above and beyond), rather than just being compliant (just following the rules and doing the bare minimum). Having employees who are committed rather than just compliant is more crucial for new ventures. Literature in the field of Organizational Behavior suggests that when employees develop goals and expectations with their managers, the result is higher levels of performance and higher motivation. So the key to motivating employees to achieve high expectations is to include them in the process of setting performance standards and expectations. Below are some principles that can assist you in that regard:

  • Management by Objective (MBO) supervisory approach. An MBO approach occurs when performance goals, standards and expectations are developed mutually by the supervisor and the employee. Ideally, codifying these at the beginning of the performance and evaluation period is preferred. In my previous experience as a supervisor, I have found using an MBO approach in supervising employees to be extremely successful.
  • Quality Circles. A quality circle is a Total Quality Management (TQM) technique that consists of a volunteer group of employees (between 6-12 employees) who meet on a regular basis to discuss and solve problems pertaining to the quality of work in their area. By doing this, employees are given ownership to make decisions and recommendations on how to do specific tasks rather than having them dictated to them by those who aren’t as knowledgeable about their work.

#3: Growing Your Company’s Culture

Consider the following statement: 

If I were to come in to your company, give each of your employees a blank sheet of paper and I asked them to describe the culture of the company, would the majority of the employees say the same thing?

Having high levels of agreement among employees about what is valued and high levels of intensity about those values makes for a strong organizational culture. But more importantly for company leaders is to make sure that the existing organizational culture is in fact the organizational culture that they want to exist within the organization. Then, the key to growing your company’s culture is through recruiting and selecting people for cultural fit. Since the culture of an organization has such a huge effect on an employee’s chances of fitting in and doing well, it is suggested that when evaluating potential employees, companies should give priority to cultural fit rather than job skills, since it would be easier to teach employees new job skills.

Below are some recommendations and tips for organizational culture:

  • The Cultural Web tool. The Cultural Web tool is used to analyze and to depict seven components of an organization’s culture: a) Paradigm, b) Stories, c) Rituals and Routines, d) Symbols, e) Organizational Structure, f) Control System and g) Power Structure. Practical application would be to have each employee complete this tool anonymously on a piece of paper, compile the results and discuss the findings as a large group. This would help to identify any gaps between perceived organizational culture and actual organizational culture.
  • Reinforce the organization’s culture (current employees). Determine various ways to remind existing employees about the values of the organization. Standard methods would include reminders through socialization and training, connecting informal rewards with the formal reward structure in the organization and reinforcements in evaluation and development structures. Other ways would include creating symbols or items that can be displayed throughout the organization’s workplace for quick viewing. For example, as part of its cultural transformation process, Time Inc. created a small business card that contained the company’s mission, vision, strategy, heritage and employee expected behaviors on the card. These “culture cards” were given to each employee to carry around.
  • Embed organizational culture in a company’s recruiting and selection process (new employees). I highly recommend Patrick Lencioni’s book “The Ideal Team Player” as an excellent resource that discusses in detail how an organization can take practical steps to vet candidates for cultural fit during the interview and candidate reference checks phases of the interview process.

I hope I answered your question succinctly but also thoroughly and provided you with practical tools from the world of academia that would be beneficial to helping your organization reach its future goals.

What do you think?

Jim Newenhouse

Veteran Entrepreneur: Jim Newenhouse

Joshua Seley

Veteran Entrepreneur: Joshua Seley