Part 2: Principles Matter Series
Crisis of Culture
I think we are living in a period of eroding principles in the business world. The problem may not be the erosion of a foundation, but instead the absence of any value for a foundation. Too many companies in the last 20 years have found incredible success by being in the right place at the right time. They have built powerful businesses but have done so without doing the hard work of building a strong principled culture. They find themselves ahead of competitors, not because they have a strong foundation, but instead as a result of discovering a disruptive technology or business model.
I don’t want to suggest that I am discrediting their success; it required hard work, great innovation, and taking big risks to achieve the success that they have seen. However, I am advocating that they prioritize the building of a solid foundation of principles and culture in order to protect what they have built and enable a sustainable organization for the future.
Principled Cultures
Sustainable businesses require solid foundations built on principles. However, most businesses don’t take the time to build a principled culture. These companies gain success by selling innovative products or services but stumble when faced with challenges. How often have you purchased an innovative product only to find that you are treated poorly when problems arise or are required to jump through hoops to receive support.
These companies focus their time and energy on winning in the marketplace. Any weakness in their cultures seems irrelevant while they thrive financially; the problem they face is the long run. How long can they provide bad service and support until the customers seek out alternatives? Broken cultures in companies lead to bad outcomes over time; these businesses ultimately fail or become regulated.
Lack of Discipline
Too much in our world has become too easy. If you compare the quality of life today compared to virtually any historical measure, life is quite easy. We can get information instantly, order anything we can imagine and have it delivered to our door in a day or two, stream music and movies, and video chat with anyone anywhere. This ease has built an expectation that everything should be easy. When faced with something difficult, too often we seek the easy.
This emergence of ease has permeated the business environment. Starting and building businesses is easier than it ever has been. You still need innovative ideas, but once you have a great idea, everything else is much easier than at any other point in history. Businesses, just as individuals, have emerged without the discipline required to build and cultivate strong foundations.
Building and sustaining a principled culture requires commitment, investment in time and money, and a relentless willingness to hold to the principles in the face of challenges. You have to prioritize your principles above all else; you can’t cut corners.
It’s More than a Chicken Sandwich
There are examples of companies that have succeeded; I think Chick-fil-a is one of the best. The most visible example of their commitment to their principles is the fact that they are closed on Sundays. Critics would argue that they are sacrificing tremendous profits by staying closed a day on weekends, but the critics are missing the bigger picture. Chick-fil-a’s culture, including closing on Sunday, is part of a grander vision that produces some of the highest quality operators (their “franchisees”) in the industry. The employees at every restaurant deliver the best customer service experience in the QSR business. The financial performance of Chick-fil-a speaks to the effectiveness of their strategy. The average Chick-fil-a restaurant produces annual sales exceeding $4.5 million per year. If you don’t think that is impressive, consider that McDonald’s which is widely considered the volume leader, averages less than $3.0 million per year in each of their restaurants. Another, Wendy’s averages less than $1.7 million per year.
Principles matter, Chick-fil-a is proving that every day.
Are You Failing as a Leader?
Do you have documented principles? Did you develop these principles with the engagement of other employees? Do all employees understand these principles and how to apply them? Do you ever find yourself turning to these principles in order to resolve a decision? If you answered “no” to any of these questions you are leading an empty organization. You may be putting up numbers today, but there are cracks in the walls, whispers in the halls, that all weaken your ability to build a sustainable future.
Many companies experience a moment of success that leads them to believe they are great. However, only those who are willing to do the hard work of cultivating a principles-based organization will survive for the long-haul.
It is Never Too Late
It is never too late to start building your foundation of principles. You should not think of it as an event, but rather the start of a never-ending process of culture building and learning. You will make mistakes, but don’t give up. Great principled organizations are tested all the time and fail occasionally. However, they hold themselves accountable, learn from their mistakes, and move forward.
Principles will serve to bind your team together. The teams will operate more effectively and efficiently. Business performance will become more consistent and customer relationships will strengthen. In the end, the principled foundation you build will directly translate into increase value for the enterprise.
It is easy to get started, but if you want quick results, I can show you how and help you avoid common pitfalls.
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