In this article we consider 'culture' in your family business - what it is, why it is important, and what you can do to help shape it to your business' advantage.
What is the 'culture' of a family business?
Every group of individuals that work together will create a culture which defines the way the group interacts with its members and how it projects itself to the outside world. 'The way we see and do things around here' is one way of describing it, and it is likely to involve a set of 'values' that everyone shares, believes in and acts upon every day.
Bob Diamond, the former CEO of Barclays Bank, talked about culture in a BBC Reith lecture as being identified by 'what people do (in an organisation) when no-one is looking'.
Not long after that he became engulfed in a regulatory crisis for Barclays, at the root of which was its own culture at the time - a bonus culture which saw some people prioritising personal bonuses over the interests of the business and its customers. The financial and reputational damage caused to Barclays was considerable.
The culture of any business is important to the way its customers and other key stakeholders (including staff and potential recruits) perceive it.
Why is culture important?
Research shows that organisations with a strong culture have many competitive advantages. For instance, they:
enjoy higher levels of employee satisfaction and retention
can react more quickly to, and cope better with, change - both internal and external
become market leaders and premier brands
sustain long term success
work effectively across geographical boundaries
deliver superior financial performance
A strong positive culture can therefore be an important differentiator and a great competitive advantage for family businesses.
What is the culture of your family business?
You may have given thought to this already, and an important part of it is likely to be the fact that it is family owned and/or managed. If you have not found the time to think carefully and critically about your family business culture (you will not be alone) it will repay the effort.
As a firm, Veale Wasbrough Vizards went through a cultures and values programme of our own around four years ago, which has been enormously beneficial to us. We will share some of the lessons we learned with you in our next Family Law Brief. We will also take a look at 'values', how they underpin a business' culture, and just as importantly, how they can help you to shape your business and deliver better performance.