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Is Your Foundation Secure?


No matter whether I am talking with the former chairman of Merck & Company, a family run company of tens to hundreds of millions of dollars in sales, or the 2-4 founders of a new tech startup, the importance of setting and maintaining the right culture comes up. It, literally, is the foundation of every company. Culture has seven parts to it that pervade and infuse a company. It is not just a few words that conjure up some feel-good images. It may be logical to some to understand the importance of culture and values to a business and to the relationships of people within the company and with those external to the company. To others, it may be the emotional connection that is evoked by words and images of values. But logic and emotion are not enough. The culture, values, character, ethics, and morals must result in daily actions.

LOGic—>EMOtion—>acTION (LOGEMOTION)

The former chairman of Merck & Company spoke in March this year to a group in Seattle of corporate directors of boards of companies. He related the issues he faced with VIOXX from its FDA approval in 1999 till it was withdrawn from the market in 2004. You can read a synopsis of the story at Timeline: The Rise and Fall of Vioxx. The back story related to culture is important, however, and not reported in the summary. Imagine being the head of Merck and deciding to stop selling a drug that was making billions of dollars for your company. How do you make such a decision?

In the written words of the chairman in the annual report for 2004, he says, “Merck conducts its business based on guiding principles of scientific excellence, ethics and integrity, and, above all, putting patients first. These principles and values have allowed Merck to play a leading role in discovering and developing medicines and vaccines that preserve and improve human life.” Complete Text. This is based on statements from the founder, “We try to remember that medicine is for the patient. We try never to forget that medicine is for the people. It is not only for the profit. The profits follow. And if we have remembered that, they have never failed to appear.” View a 2:39 video of the history of Merck here.

That’s how a business remains alive and successful 125 years after it was founded. The former chairman related the positive response from company employees after the difficult decision was made. The indicated they would have left the company, if the company had not remained true to the ideals that they had both logically and emotionally become connected to. They needed the action to be consistent with their beliefs and that of the company.

In the area of family owned businesses, culture is really personal. It’s not just the culture of the company, it’s the culture of the family. The Betts Company was founded in 1868 and is now headed by the 7th-generation of family leaders. Here is a short video they published this year. They created an excellent document they use when hiring and on-boarding people that details their seven core values and how they play out in day-to-day action. Contact me at PaulMenig@BusinessAccelerants.com if you would like to know more and view the document.

For the new company, you may have heard the phrase, “Hire slow—Fire fast.” That’s because a rotten apple in the barrel of your company will destroy what you are trying to create. The other adage is, “Get the right people on the bus in the right seats.” If people don’t act in concert with the logic of your company, or are not emotionally connected to your way of doing business, then, your action needs to be to find someone else that fits better. Don’t let it fester and get worse. Don’t let it be a virus and multiply. Don’t let it become cancerous and destroy the company.

Culture is as pervasive and strong as tree roots

The seven elements of culture that make it as pervasive as this tree’s roots are:

  1. Social Organization
  2. Customs & Traditions
  3. Language
  4. Religion
  5. Art & Literature
  6. Forms of Government
  7. Economic Systems

It might not be obvious to you, how something like “religion” can exist in the business world. Here’s a hint. Religion is beliefs. Watch for my upcoming short video series on this topic. In the meantime, check out my other videos.

One Response

  1. Ted Powell says:

    Paul,

    As always, very topical and always a nugget or two to takeaway.

    Thanks much!

    Ted