Why you need to think about your company’s mission, vision, values and guiding principles.
When they look at a company, bankers often emphasize the importance of the five C’s of credit: capacity, capital, collateral, conditions and character.
There is another “C” that is equally important, but seldom discussed: the company’s culture. It can have a huge impact on the long-term value and stability of the business.
New businesses are often built around the skill sets and backgrounds of their founders. Their business plans will often point out the experience and core competencies of the key people involved, but say nothing about their mission, vision, values and guiding principles. Those details are mistakenly dismissed as window dressing or fluff.
The opposite is true. A well-crafted corporate culture represents a road map for success and can reveal many “off-book” sustainable, competitive advantages. (Having a clearly expressed culture also can help win over bankers when they are considering whether to approve a loan to a company.)
A company’s culture—its mission, vision, values and guiding principles—starts with the head of the company, and that person is responsible for educating the rest of the staff about these guiding principles.
This is a relatively simple step that actually takes constant attention. You have to teach employees about the company’s guiding principles, and you have to keep reminding them.
However, spending time building out a clearly defined organizational mindset—an investment of hundreds if not thousands of hours—pays a high return. The resulting focus will expedite every subsequent choice or decision. During the hiring process, for example, it will help identify people whose values, attitudes and beliefs will be in alignment with those of the organization going forward—saving a fortune in opportunity costs and expenses related to high employee turnover.
A defined culture helps everyone involved in the business better articulate a strong message about the company that is simple and easy for everyone to understand. This is a real advantage when a founder is in startup meetings with bankers and investors.
Once put into practice, the culture and the way the employees project it will become the unique, sustainable competitive advantage that will differentiate the enterprise from its competitors. It all leads to improved operational consistency, which every banker knows is key to a business’s potential to scale up and become an even more valuable client.
