Earlier in my career I paid very little attention to the importance of culture. Being on the lower rung of the organization, I just needed to worry about myself.
As my career has evolved and I now have direct reports, I am much more aware of the need for a positive culture and spend more time thinking about how we can all work faster, achieve better results and feel more satisfied with work. I have found that when everyone is rowing in the same direction, the success of the organization seems effortless, and when there is dysfunction, simply going to work requires monumental effort. The difference between these two scenarios is the quality of the culture within the organization.
Private equity funds are in the business of buying, improving and selling companies for more than they bought them for. If a good culture can make people work faster and achieve better results, you can bet private equity professionals like myself are going to focus on it.
Companies with bad cultures are never easy to sell because, in most cases, they are not performing well financially. There are a lot of tell-tale signs of a company that has a bad culture, including lots of closed office doors, dour faces, a lack of verbal communication, people arriving late or leaving early from work and general sloppiness of the office.
Turning around a bad culture typically requires a change in at least parts, if not all of, the leadership team. When we invest in an organization, one of the first tasks we tackle is reviewing the mission, core values and quality of the culture. Through this process, you can generally find the one person or few folks who are not on the same page with the rest of the organization.
In-person meetings are key so that you are better able to determine who is participating positively in the dialogue and those who don’t participate or are argumentative. From these meetings, you are able to make personnel changes that will make for a happy and productive workplace.
It is vital that leadership teams live by a company’s core values, which sets the stage for the culture of the business. Reinforcing core values and screening your decision-making about whether a project should move forward, what customers you should pursue and even which personnel you hire needs to adhere to core values and the culture that results from those values.
In any organization, but particularly in a small one, one individual can spoil the work experience for many. Business leaders need to be vigilant in ensuring a good culture and quickly eliminating those individuals who knowingly or unknowingly detract from a positive culture.
Anyone who has had to manage a group of people can tell you that people can be your most challenging experience. But with a positive culture, they can also be your most important asset.
Jeffrey Kadlic is the founding partner of Evolution Capital Partners