How to Shape a World-Class Company Culture
Nick Sarillo is the founder of Nick’s Pizza & Pub, the sixth-busiest independent pizza company in per-store sales in the United States, boasting margins nearly twice those of the average pizza restaurant and an impressive employee retention rate of 80 percent, in an industry where the average annual turnover is over 150 percent. His secret? Culture.
“You can reap the benefits of a world-class culture—including more enthusiastic teams, lower attrition, more innovation, better customer service, more sustainability, and ultimately, better financial performance—by disciplining yourself and your organization to work the company’s culture into every decision you make and every action you take.”
Sarillo has written a book, just out, called A Slice of the Pie: How to Build a Big Little Business. If you're looking to build a world class company culture in your small business, this is a book you want to pick up.
In the midst of the economic downturn that saw many of his competitors close their doors, Sarillo sent an e-mail to his customers asking for help. It was a bold and risky move that flies in the face of conventional business wisdom that holds you should keep your customers in the dark if your business is struggling. Nick’s patrons responded immediately, though, and for weeks, the restaurant was packed with loyal customers intent on keeping the local pizzeria in business.
This fierce loyalty is due to Nick's culture, according to Sarillo. At the heart of his advice is discarding command-and-control management in exchange for a method he calls “Trust-and-Track”—a management structure that empowers employees to perform their jobs uniquely and with spontaneity, playing to their individual strengths. With intermittent checks for quality and to ensure performance is in line with the company’s purpose, Sarillo argues the benefits of freeing employees to be themselves and serve the organization in a way that is true both to their core and the values of the organization.
“While results under command-and-control are usually limited by the manager’s talent and pre-established norms, purpose-focused individuals who operate under the trust-and-track philosophy are free to tap the full breadth of their intrinsic motivations and abilities,” writes Sarillo. “People and teams can reach higher, previously undefined levels of performance—and so can the organization.”
Sarillo offers insight into how he defied his unlikely odds of success and how other business owners and leaders can do the same. The key components:
Know what you’re all about. The crux of a strong company culture is purpose. Determine what your organization’s purpose is, and then work single-mindedly toward it.
Get the word out. Establishing your organization’s purpose isn’t enough; you must continually emphasize and reiterate your purpose to employees and customers. From marketing materials to workspace design and internal communications, repeating the purpose in a variety of contexts bleeds naturally into actually living it organizationally.
Let people be themselves. The best way to ensure your team members join in your high-performance culture is to let them be themselves. This means letting go of some control—the “trust” part of trust-and-track—to unleash your workforce’s natural passion in the pursuit of achieving your shared purpose.
Train team members to lead. Building a strong company culture requires that everyone lead. Start by hiring only people with leadership potential. Then allow team members the autonomy to make decisions on their own, following your organization’s values; this includes allowing employees to take charge of their own leadership growth.
Train managers to be coaches. Rather than hiring managers to serve as enforcers of company rules and regulations, find and keep managers dedicated to serving other team members as mentors and ultimately helping them lead.
Inspire good behavior. The second half of the trust-and-track equation is tracking employees’ behavior through established practices, tools and guidelines as a way of ensuring their behavior is in line with the organization’s purpose. In holding team members accountable, managers must also reinforce the organization’s purpose and values at every turn by modeling them in even the subtlest actions.
Become as transparent as possible. Complete transparency creates trust within and outside of the company. Encourage transparency by embracing an “open book” policy on finances and human resources data, and encouraging free use of social media to talk about the company—from what’s new and exciting to what the challenges are. Sharing challenges, something frequently avoided by business leaders, is essential to being a transparent company.
Become a cultural warrior. Despite the best efforts and even carefully constructed frameworks, remaining vigilant about culture requires constantly battling our ingrained human tendencies—laziness, fear, desire to avoid uncomfortable situations to name a few. Leaders must become dedicated cultural warriors—through discipline, mindfulness and constant pursuit of the company’s purpose and values.
Beyond trust-and-track, Sarillo outlines three more essential tools for ensuring that culture remains central to every decision and action:
Purposeful architecture. Purpose must be reiterated in a variety of contexts, including your company’s architecture. From the floor plan to the wall décor, your physical space should reflect your company’s reason for being. Think of specific words in your company’s purpose statement, and try to connect those words with specific elements of your design.
Feedback loop. A blend of Peter Drucker's Feedback Analysis and the Gallup's 4-Keys Coaching guide, this two-way conversation between a manager and employee offers an opportunity to analyze a positive behavior demonstrated by the employee that day or week. More in-depth and frequent than typical annual or semiannual performance reviews, the feedback loop not only validates employees, but it also trains them to observe their behaviors on their own. Employees are encouraged to name one thing they thought they did well that day or week, then build upon their comments and list one other thing the employee did well.
Issue—purpose and values—solution. Encourage employees to solve unforeseen challenges or problems by filtering all potential solutions through the prism of the company’s values. This frees the manager from solving every problem and empowers the employee to better understand the relevance and nuance of the company’s values.
Shaping and strengthening a company’s culture, Sarillo argues, is a continuous process made easier with these culture-centric tools in place.
While countless books have been written about the importance of company culture, with Apple, Google, and Zappos as the poster children, there is a gap in the business literature where replicating Apple’s playbook feels anything but realistic for small and everyday businesses. A Slice of the Pie fills the gap quite well.
To read more of Matthew May's analysis on leadership, motivation and paths to success, click here.