AP on Clyde Group: Culture shock: Business owners see need to change their ways

This piece originally appeared on The Associated Press. 

By Joyce Rosenberg, AP Business Writer

The results of a staff survey jolted Alex Slater into realizing how drastically his business needed a culture change.

About half the 19 employees at his Clyde Group public relations firm said they planned to leave in one to two years, and rated the environment as “average” or “needs improvement.” No one agreed with the statement: “I am adequately compensated.”

“It was a big, almost shocking, learning moment for me where I realized that I had been doing it wrong,” says Slater, who undertook the anonymous survey in 2015 after three staffers said they were leaving the Washington, D.C., firm. What he read was painful.

“A lot of this was personal on my part,” Slater says. “I really had to change my management style.”

That moment of truth is one that many small-business owners experience as their companies evolve. In some cases, the culture that worked for a startup is a bad fit for a more established, larger business. Owners in their 40s or 50s may have a different approach than younger staffers, making for an unhappy workforce. And when owners do see that there’s a problem, human resources consultants say, it takes a lot of listening and adapting to shift from a culture that turns employees off to one that motivates them.

Slater’s staffers, particularly employees in their 20s and 30s, said they were afraid to make mistakes for fear of being criticized, believed they couldn’t disagree with the boss and felt they had to work 60-hour weeks. Slater admits that yes, he chastised staffers, and would send emails to employees at night and on weekends and expect a reply.

“The old rules were going to end up literally jeopardizing the future of our business,” he says.

After Clyde Group brought in a consultant, the culture changed. Forty-hour weeks are now the norm, Slater says. If someone makes a mistake, the company’s process is to learn from it. Staffers at all levels are asked for input on running the company. In a follow-up staff survey in 2016, 85 percent described Clyde Group as a fantastic place to work, he says.

IT STARTS AT THE TOP

Culture issues at small companies often start with owners or CEOs who are complacent, self-absorbed or too set in their ways, human resources consultants say.

“A lot of CEOs have the mentality of, ‘Here’s the stuff that I did to get here, so everyone else should work the same way,'” says Brian Kropp, head of the human resources practice at CEB, a consulting firm with headquarters in Arlington, Virginia. “When people deviate from that form, or want to do it a different way, the expectation of CEOs is, you’re doing it the wrong way.”

Moreover, office culture and employee needs are often a lower priority than trying to bring in business or develop new products and services.

“Owners wear so many hats and are so busy doing the business that they may not have time for some of the softer-skill things,” says Patti Perkins, owner of Calyx-Weaver & Associates, a human resources consulting firm based in Eagle, Idaho.

Often an owner’s epiphany comes because there’s a crisis, Perkins says. Staffers aren’t getting along, productivity falls or there’s an exodus of employees.

GROWING PAINS

At data analysis firm Summit Consulting, new business was pouring in but the fast-growing company was losing staffers and couldn’t hire fast enough. Managers took a harder look at people’s comments from their exit interviews. They realized the Washington, D.C., company wasn’t clearly organized, had poor internal communication and was a frustrating place to work, says Jennifer Folsom, the director of corporate development.

Summit Consulting was still operating with a startup culture even though it was 10 years old and had 50 employees, Folsom says. Important jobs like chief financial officer and human resources director were being done part-time by employees who had other assignments.

“No one knew who’s in charge. The communication piece was really wrong. People were hearing different things from different people,” Folsom says. And without a clear organizational chart, younger staffers didn’t know what jobs they could advance to.

The solution was implementing clear tiers and teams, and hiring full-time managers to handle finances and human resources. The company also improved its retirement plan and other benefits. As a result, Summit Consulting now has about 100 staffers, and it takes less than a month to hire someone rather than about six months.

PASSING THE BATON

A culture change is progressing slowly at the Houston law firm Wilson Cribbs & Goren.

“Law firms are the most old-fashioned professional practices and one of the most old-fashioned business models,” managing partner Anthony Marre says. They’re run by senior partners, he says, while “young lawyers are looking for trust and responsibility, the freedom to interact directly with clients and to build their own practices.”

Senior partners recognized that they needed to prepare the firm to be passed on to the next generation, so they started giving Marre, who’s now 34, more responsibility, including recruiting younger attorneys. He became managing partner three years ago, and began suggesting changes like hiring marketing and business development consultants.

Among the changes: All the attorneys meet weekly, and while one focus is client issues, another is what the lawyers need for their own professional development.

“Not only are the younger attorneys more engaged at all levels, they are more enthusiastic than ever about their careers and contributions they are making to the law firm,” Marre says.