HR Question: Changing the culture

March 29, 2022

by a searcher from Massachusetts Institute of Technology - MIT Sloan School of Management in Los Angeles, CA, USA

I would like the community to provide some feedback on how they have successfully changed the culture/work ethic within the organization. Naturally, I would like my employees to be more focused, and yes, work more hours. In the absence of dangling a financial carrot in the form of higher salaries/bonus, and especially in this work-from-home-whatever-goes office culture, what strategies have worked? I'm afraid "leading by example" is not yielding any results.

I understand the lower middle market, perhaps doesn't always attract the best talent pool, but how does a motivated operator maximize employee productivity, increase the accuracy of operations, and motivate employees to not simply clock out at 4:30 PM without pursuing the hard-lined, rules-based boss approach?

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Reply by an investor
from Florida Institute of Technology in Melbourne Beach, FL, USA

It’s a great question and one that I think every company (large or small) deals with, albeit solved for in different ways. I like, and mostly agree with both Brian and David’s comments, but I’ll share my two cents. First, building off David’s point that you need to understand each individual’s motivation/drive – this is really the silver bullet here, but almost impossible to achieve, so I would think of it as something that is aspirational and worth continuously working towards and not something that has an end state or finish line. The key here is open and honest ongoing communication between the employee and their manager/leader/owner (i.e., the person that has an influence on whether or not they obtain what is needed to motivate them). To help with this (and scale it as you grow), lots of companies implement formal and informal processes of communication. For example, does the employee have ongoing check ins with their manager (or you in this case) about how things are going, what’s changing in their lives, what’s important to them, what their needs are to be successful (as defined by them)? The benefit here isn’t just that you can understand what you need to give them (because you won’t always be able to do that within the constraints of the business), but also that the employees truly feels a sense of trust and transparency with their leader. Having good intentioned, planned weekly check-ins or quarterly conversations could go a long way here (and as your company grows the new leaders learn this to be the norm and how to do it correctly so that it can scale over time). Second, I think it’s pretty clear that in a lot of the SMBs and blue collar type jobs that the hygiene factors tend to be most important (e.g., compensation and benefits). So assuming you get the same sense of this from your org., I would do a deep dive into this area to see what you’re offering, how that compares to what the employees want/need, and how that compares to your competitors (when I say competitors, I mean other companies your talent could go and work for, not necessarily your business competitors). Then take a look at those data points and see how you can adjust accordingly to do better. One key component is really understanding the ROI of additional dollars spent on things like comp and ben in terms of things like productivity, engagement, and retention.

Reply by a searcher
from Babson College in Arlington, VA, USA

Without knowing your specific industry, I would simply answer "good leadership and hiring practices." This may sound basic, but simply blaming the talent pool by saying "I understand the lower middle market, perhaps doesn't always attract the best talent pool" is a mediocre excuse IMHO. It's always going to be tough to attract the best talent for any small business with normal budgetary and operating constraints. However, those limitations can be overcome by aspiring to provide inspirational leadership and actively working to help your employees become *better* (subjective). By showing you care and putting effort into their development, you will almost certainly get more out of them. If your employees appear to lack inspiration, find a way to motivate them based on their individual personality (this takes nuance and patience). Doesn't mean you have to be their best friend - but you should show them you care about their professional development. Everyone wants to feel valued in their job and many want to see that there is some sort of upward mobility/reward if they do great work. Even the most hard core 9-5ers want to feel appreciated and that their work matters. If you hire someone and let them languish without coaching/regular feedback, motivation will usually wane. Some times you hire the wrong person for the job. It happens; and when it does - exit them as fast as possible once you realize they aren't going to improve. When you hire new people, always set firm performance expectations up front so there is no misunderstanding as to what is expected. - Note* this feedback is coming from a fellow small business owner and former Marine Corps NCO perspective.

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