[EDITOR’S NOTE: VITAL holds monthly CI Business Mastery Classes where it addresses important CI business topics via a webinar. Each class is supported by an industry brand. VITAL has agreed to share some of the information from these classes in a monthly column of highlights from its most recent webinar. The eleventh CI Business Mastery Class was on key management practices that drive the profit culture, and it was supported by Future Ready Solutions.]
This month, we’re going to discuss company culture and articulate what we mean by “profit culture.” We’ll discover the steps involved in creating that profit culture throughout your company, and we’ll show you how to create powerful motivation when your team understands what’s in it for them.
Culture is the who and the how of your business or, ultimately, its business personality. Some are strong and super obvious cultures while others are subtle and forgettable. The culture resides in the company values and actions. Those values are not just what’s on paper or on the wall in your conference room, but the real values that are executed every day and the actual behaviors of the employees in the business, their customers, and their vendors. Culture is literally in the celebrations, traditions, and activities of that company and what it finds important.
Who you hire and promote has a massive effect on the culture of your business, as it sets the expectation for what you consider behavior that should be rewarded — as well as who you decide to fire for not meeting those expectations.
Culture is what attracts, trains, and retains the talent you have today or prevents you from getting the talent that you want. The same goes for your customer base. Your culture is what brings them to you, keeps them from you, or causes trouble with those customers. When there is a culture mismatch, there is likely unhappiness on one or both sides of that customer interaction.
Every company has a default culture, and in the custom integration industry, the top value tends to be customer satisfaction, followed by values like attention to detail, exceeding expectations, and employee first. How do those words resonate in the actions of your business, from leadership all the way down? Because actions are what create and sustain culture.
Profit culture is simply a component of the behaviors of your company. When all employees know the value and importance of the company making a profit, they can tie that back to how they individually impact profit in their role. It’s simple to explain, but a lot more difficult to instill throughout the company.
Why is profit culture missing in a lot of organizations? People are scared to talk about profit and owners don’t want to give up control. Plus, our industry lacks this type of training. In many cases, employees have not been taught about profit and why it’s important. It has been vilified in some cases and it’s treated as a secret in so many businesses.
When the team understands where they’re going and the plan to get there, they can make decisions and turn out work that aligns with that vision and plan. When profit is part of the plan, which it should be, you must get your team in sync with that plan and rowing in the same direction.
The most common failure here is not having a profit plan in the first place. Profit is often a hope or guess rather than something that’s planned for. We must first start with a profit plan, which at VITAL we offer our members annually so they can create a financial plan that includes a clear profit picture and who they will play the game with to get there. That plan should not only be powerful, but also needs to be a plan that creates a vision your team can see. When you’re able to communicate that vision in a way that other people can understand and communicate to one another, the real power of that vision compounds.
To get your team behind that vision and instill the profit culture, you must demonstrate what’s in it for them. When a company makes profit, it improves job security and the longevity of the company for its clients and employees. Profit also clears the path for growth in pay and personal development for those who want and deserve it. Profit is required to have money to invest in training and time for development. Profit is an indicator that the group is working well, chaos is reduced, and the team is winning.
Your team is looking at your business from different perspectives — all with different actions that affect the bottom line. Share the state of the company with your team on a regular basis, otherwise they’re going to create stories of their own and those stories will not be ideal and will not support your goals. You also need to share with them how they measure up for each of your positions. Get clear on how that team member influences the profit performance and make sure that’s documented in your job description, and reward those team members who have an outstanding impact on the bottom line.
Creating Profit Culture
There are seven management actions to take to instill this profit culture in your company.
1. Involve the employees and their mentors in understanding how their efforts influence profits — all the way from the warehouse person to the designer and technician. Everyone in an integration company influences profit.
2. When there are problems to solve, involve the team and brainstorm ideas to solve those problems, making sure profit is an essential component of that discussion.
3. Make your actions visible. Have a scorecard that is clear so everyone can see how they stack up.
4. Encourage your team to self-heal the wasteful activities and practices and don’t micromanage these actions. Reward the outcomes of high performers.
5. Make sure those profit influences are documented as a written part of that job description and as a part of the review process, so that each person knows how he or she is affecting the profit of the business.
6. Celebrate those project wins when they come in on time or under budget. That is a huge factor in the overall profitability of a CI business.
7. Create a fair profit-sharing plan that’s based on high standards of achievement, so that it is not an entitlement — meaning that your team does not consider it a component of their normal compensation.
For more information about the CI Business Mastery Classes and the other services VITAL provides, visit http://growwithVITAL.com.