Most of my readers aren’t aware that for a period of about 4 years (1996 – 2000) I owned an internet wine retail company. It was one of the first internet retail wine companies out there and had a really great name, Secret Cellars. Our USP was searching and sourcing small quantities of exceptional wine from small vineyards that were more focused on quality than quantity. We would then offer a limited number of bottles or cases to our registered internet customers.
If you want a million dollars from a wine business, start with two million!
The Dot-com bust, combined with a weak business model, killed our business and we went bankrupt in 2000. But I definitely learned a lot about good wine and the wine business, from the vine to the glass, and also drank some exceptional small production wines.
One of the interesting things about wine is that a wine will often take on some of the characteristics of the barrels it is stored in. Many fine wines, especially reds, are stored and aged in oak barrels, which imparts a certain amount of tannins and other elements essential for longevity and a particular robustness and taste. Chardonnay wine aged in oak barrels is rich, buttery and “oakey” in taste whereas the same wine stored in aluminium vats has a crisp, “steely” character. Some wines are even stored in old whiskey or sherry barrels, giving the wine a heady aroma and sweeter taste.
Like aged wine, corporate cultures tend to take on the characteristics of their surroundings. A corporate culture can be developed by the company founders to fit their own belief and ideas about how a business should be. And for the first 5 or so years of its life the culture tends to closely match the founder’s intent.
But as a business grows, new employees are added, the influence of the founders diminishes through sheer size of the company, and sometimes neglect of the values and culture in favour of profit and growth. With an influx of new employees coming from different company cultures, bringing in their own work habits, tends to dilute the original culture. And very few companies project their original culture with robust new employee on-boarding programs or culture workshops.
In addition, some of the internal policies and work process are changed in order to add more control or a greater focus on profit maximization and cost reduction. The original policies of exceptional customer care that put the company on the map now are overshadowed with policies designed to propel growth and earnings.
One of the lessons we have learned over the years in our advisory work on culture and business performance, is the strong, yet almost invisible, impact that company policies and work processes have on culture and employee behaviour.
Structure and Policies Shape Behaviour and Culture
What if each player on a rugby team was paid solely on the number of points they scored? It would be a different game, indeed. Reward and remuneration policies tend to drive behaviour, sometimes in ways that cross the line. It is well-known that Traffic Wardens write more tickets, and more “dodgy” ones, when they are on a tickets-written-per-week bonus system.
The top-down sales goals imposed on bank employees for opening more bank and credit card accounts led to a massive 2 million fraudulent accounts being booked by Wells Fargo employees in order to meet sales quotas based on the number of accounts opened. And the fact that many financial institutions have mortgage brokers and lenders who are remunerated on the number of loans they write have led to multiple cases of poor quality lending, doctored loan applications, and misselling throughout out the financial services sector.
Wine barrels provide the structure to hold the wine during its ageing and development and also imparts its own unique flavours. Company policies and organizational structures shape employee behaviour.
The culture you wind up with may not be what you expected when you developed your policies and work processes. Our suggestion is to take a very close look at your policies and internal processes to determine the behaviors they are really promoting. You may be surprised.
A great wine reveals its true nature, not the nature of the cask!
Written and Posted by: John R. Childress
Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid
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John also writes thriller novels!