I first published this article over five years ago. It quickly became one of the most popular articles I have ever written and one of my personal favorites as well.
Enjoy!
Your organizational culture has a dramatic impact on your success as a small business. Most new businesses start off with a family-like culture. Everyone trying to get along. Emphasis on survival and continuity. Think of great television families like the Waltons, the Cosbys, and even the Sopranos.
The most successful small companies, at some point, transition from a family culture to a team culture. The focus shifts from sustainability to growth. From compatibility to winning. Think of great sports teams like the San Antonio Spurs, the New England Patriots, and the Boston Red Sox with three World Series championships recently.
How can you tell where your organizational culture falls? Take a look at the comparisons below between families and teams and determine which category best represents your company culture.
Compensation
- Family members are given an allowance to cover expenses. More expenses = more allowance.
- Team members are compensated for performance. More home-runs = more salary.
Consequences for Non-Performance
- Family members are punished. Never fired.
- Team members are traded or cut (fired).
Peer Expectations
- Don’t embarrass the family.
- Maximum performance.
Continuity
- The family will exist for perpetuity.
- Every team player and every team has an exit strategy.
“Boomerang” Policy
- Family members are always expected to return to the family. Sometimes with additional family members.
- Team members are expected to move up or move over to other teams.
Leader Selection
- Family leaders are selected based on age.
- Team leaders are selected based on competence.
Leadership Style
- Family leaders usually lead from the front.
- Team leaders succeed by leading from the rear.
Headcount
- Families are always trying to increase headcount.
- Teams manage headcount and focus on return on investment.
Quality Time
- With other family members.
- Mostly outside of the team.
Ultimate Goal
- For families, it is survival.
- For teams, it is growth and winning.
Growth Strategies
- For families, mergers are good.
- For teams, it’s about acquiring top talent.
Leader Focus
- Family leader focuses on compliance. “Be at dinner on time”. “Clean up your room”.
- Team leader focuses on results. “We must outscore the other teams”.
Composition
- Composition of the family stays mostly constant.
- Composition of the team changes regularly. Always trying to upgrade the team with new players.
Is your company’s culture a family or a team? If it’s a family culture, are you ready to make the tough transition to a team environment? Are you prepared to lose family members? Begin holding team members accountable for their performance? If it’s a team culture, are you getting the results you want? Are you winning championships?
After over thirty years in business I have come to realize two things: I love my family and teams win championships.