We all love to have a clean car – start your own business today
Shiny wheels, the perfectly clear windows and not a streak in sight. In today’s fast paced world we often don’t have the time to do it ourselves – and when we do, there are other things that quickly fill that time.
And so we pop off to the local car wash to have it done and ticked off the list so that we can move on to other things.
How often have you sat considering owning a car wash of your own while you’re waiting for your car to be done? If it’s more than once, then maybe you should consider taking the leap and starting a car wash business.
Contents in this guide
- How to Choose What Type of Car Wash to Open
- Steps for Registering a Car Wash Business
- Car Wash Funding Options
- Choosing a Location for Your Car Wash
- Car Wash Insurance and Liability Cover
- Car Wash Equipment and Supplies
- Car Wash Marketing and Branding Basics
- Hiring and Managing Your Car Wash Staff
- How to Set Your Prices?
How to Choose What Type of Car Wash to Open
The first decision that needs to be made involves deciding between a franchise and an independent business model. Both of these come with their own set of risks and rewards – all of which have been set out in the table below.
The decision between an independent venture and a franchise opportunity must be a personal choice based on your personality.
In general – if you are someone who likes to blaze your own trail and like to have complete and utter control over every aspect of your business, then starting a car wash, or any business, as an independent is the way to go for you.
If however, you are better at working within the guidelines and like the freedom of someone else, in this case the parent company, making the decisions for you – then starting a franchise is the way forward.
Make sure when investigating the car wash franchise you are interested in, that you choose a recognisable brand with a good reputation in order to get the full benefit of buying into a franchise.
With both franchising and independent ventures, you now also have the choice of starting a mobile car wash, instead of a fixed full time entity. This also comes with pros and cons and these are listed below.
Need to know: Should You Purchase An Existing Franchise?
Steps for Registering a Car Wash Business
Here are the main steps for registering your new small to medium enterprise:
Register your business with the Companies and Intellectual Property Commission (CIPC). This involves lodging a Notice of Incorporation (CoR 14.1) and a Memorandum of Incorporation (CoR 15.1 A-E). These forms are available at www.cipc.co.za. They take roughly five to seven days.
Alternatively, it is possible to use a service that registers your company for you with the CIPC such as this one. These services do of course have their own fees attached.
Thereafter, you must open a bank account for your business. Depending on the correctness of the application forms, this only takes a day or two and is free of charge.
For an SME, earning less than a million rand a year – the only form that SARS requires is the IT77C that must be accompanied by a certified copy of your ID and a copy of the company’s registration documentation. The IT77C form is available from www.sars.gov.za. If your employees aged 24 – 65 will be earning more than R5 000 per month, then you will need to register for UIF and PAYE.
To register for unemployment insurance – visit www.labour.gov.za for more information on the process and for the forms.
The final step that takes place in conjunction with the step above is to cover your employees in terms of occupational injuries, diseases or death in terms of the Compensation Fund. This is optional. These forms are available from www.labour.gov.za
In terms of the permits and licenses you will need to start a car wash you need to first assess whether or not the premise you want to work from is purely residential or if it has been zoned to allow it to be a business property.
Furthermore, to operate a car wash you might need to apply for a permit under the water restriction bylaws depending on your municipality and the province you are in. For more information on the permits possibly required visit the Department of Water Affairs website.
Car Wash Funding Options
Before you even begin to look for funding, you will at this point need to create a detailed business plan. No institution will give you funding without one. For instructions on how to put a business plan together watch this video on business plans for dummies.
Sourcing funding for a start-up can be a bit of a challenge if you do not know where to go or what they are expecting of you. Here is a quick rundown of what you would need to prepare in order to encourage others, such as financial institutions, to give you the funding you need to start your venture.
Resource: New Ways SMEs Can Find Funding
Broadly speaking there are four main options available to entrepreneurs starting their own businesses. These are: Loans from financial institutions, own capital, investors and grants. Grants usually come from the government and are loans that you won’t have to repay, but grants come with strict guidelines on how the funds may be used.
It is always preferable to start with the bank that you already do business with – that way they have all your information and know your financial habits and behaviours as well as your credit record. Another option is to look at credit unions.
When applying for funding here are a few tricks to help you get the cash:
- Make sure that you have a detailed business plan that shows how the funds will be used and spent. It is highly necessary for you to have a detailed knowledge of the costs involved in your business – from supplies to staff to overheads and equipment.
- Know about the industry and the market you are entering. It can be beneficial for you to do a market analysis.
- You will more than likely have to use your personal assets and wealth as collateral for your new business.
- It will show your dedication and commitment if you use your own capital to place an initial investment. In some cases, it is required for you to do so – such as with SEFA – the Small Enterprise Finance Agency who require a 10% personal initial investment.
Choosing a Location for Your Car Wash
With a fixed location – most of your business will come from ‘walk ins’. It is essential to your business that your car wash, or any service based business, is in a location that is convenient.
More often than not people do not specifically set out to go have their cars washed but rather end up having it done because it was easily available and they had the time.
Here are a few tips of choosing a successful location:
- Being near a shopping area is always preferable
- Heavily populated residential areas with high traffic volumes are better for business
- The site must be easily accessible from the road
- It must be easy for customers to get back onto the road once their car is clean
- Highly visible
- A decent size car wash has more than one washing and drying bay, there needs to be enough space for these as well as a waiting area
- Enough space for cars to queue
- It is also in your interest to pick a location that will allow for expansions as your business grows.
In South African law, verbal leases can be upheld in court, but it is always best to get the agreement in writing.
In clear and concise language that both parties can understand, make sure that your lease covers any changes you may or may not make both structurally and superficially.
Make sure you know how your rental will be calculated – it is usually quoted in Rands per square metre per month, excluding VAT for commercial and industrial properties in South Africa. Make sure you both agree on what costs will be covered by your rental and what costs you will incur (i.e. electricity).
Know under what circumstances the lease may be voided by either party. And finally, know who is liable for damages to the property or for instances of burglary.
Car Wash Insurance and Liability Cover
First off, for new owners the importance of a disclaimer needs to be highlighted. A disclaimer can exempt car wash owners from covering the costs of repairing vehicles that are damaged on their premise but they do not cover gross negligence on behalf of the business owner.
It is the responsibility of the owner to ensure that all machinery and equipment is well maintained and is regularly checked for foreign objects that could cause damage. It is also the responsibility of the owner to make absolutely sure that all cleaning products used throughout the process are car-friendly.
Furthermore, public liability cover is not enough. Property in the custody, care or control of the car wash owner is excluded from cover under the public liability section. The correct policy to have in place is the Motor Traders Internal section.
Your level of insurance coverage will have to be higher if you and your employees are the ones driving and moving the cars.
It is important that you as the owner of the car wash to have general liability insurance that covers:
- Medical expenses to yourself and your employees in case of injury
- Custody, care and control coverage
- Equipment break down
- Damage to cars – you will need to set this limit for your policy
- It is also important (especially if you have bought the property) that you have property insurance that will cover your premise in terms of theft, damage, fire, flooding etc.
Leonard Degee, who has been in the independent car wash industry for 12 years, knows that in order for his car wash to continue successfully, it is important that only management handles all the cars.
Not only does it make the insurance coverage easier and cheaper, but customers are usually happier knowing that the person who might be moving their car is more accountable.
Car Wash Equipment and Supplies
In some cases, all you’ll need is a bucket, clean water, soap and some good cloths – and the willingness to approach people to offer your services. But if you would like to open a more professional business and reach a broader market then there is some equipment that you’ll need.
If you are opening a franchise, the parent company or franchisor will be making the decisions for you. If you are opening an independent location or mobile business then you will need to source the necessary equipment.
The basic equipment needed for a manual car wash is:
- High pressure system
- Oil/water separation Unit
- Drainage unit
- Industrial vacuum cleaner with wet upholstery cleaning option
- Possibly an upholstery cleaner
- Depending on the products you choose you might need a foam attachment on your hose.
Alongside your basic equipment you will also need your location to have:
- Concrete wash bay slab
- Pump room
- Drying bay
- Ancillary Walling and Paving
The Basic equipment you will need for a mobile car wash is:
- Pressure washer hose with a compressor
- An industrial hose with nozzle and gun
- A good sized tank in the back of the truck/van or even trailer
- A generator (remember to keep extra fuel handy)
- A powerful vacuum cleaner
For cleaning products and supplies, you have a multitude of varieties to choose from. If you are inclined to go the eco-friend route, there are even ranges of waterless cleaning solutions.
The cleaning product basics you would need are:
- Car soaps
- Metal polish
- Plastic polish
- Car wax
- Glass cleaner
- Fabric shampoo
- Leather cleaners
- Detergent for the pedals
- And then sponges, cloths, brushes – preferably suitable for use on all cars.
Here are some suppliers of equipment and cleaning products:
- Eco Wash – http://www.ecowash.co.za
- Hurricane Car Wash – http://www.hurricanecarwash.co.za/about.html
- Kwik Car Wash – http://www.kwikcarwash.co.za/page2.htm
- Eco D Wash – http://www.ecodwash.com/
- Durawash – http://www.durawash.co.za/
- Dynachem – http://www.dynachem.co.za/
- Geowash South Africa (for mobile car wash systems) – www.geowash.co.za
Keep all equipment in good working condition with regular check-ups. For an easier resale, make sure you have detailed maintenance records on all equipment.
In Degee’s car wash, they purchase R3000 worth of stock every month – which covers the 360 or so cars that they clean.
Car Wash Marketing and Branding Basics
Branding and marketing are two very different concepts, both of which are highly important to the effectiveness of your business.
In order to bring the customers to you, there are a couple of things you could do. These involve connecting on an emotional level, staying relevant and flexible, committing to the community you work in, staying visible and finally aligning your marketing tactics with your brand strategy.
The biggest secret to marketing is being able to differentiate yourself from your competitors. Brand Strategy Insider is an online resource for branding and marketing and they list 50 ways to differentiate your brand.
For the car wash business here are the applicable ones:
- Expand your appeal
- Rewrite the experience
- Break away from conventional wisdom
- Be the expert
- Share values with your customers
- Engage the senses
- Focus on aesthetics
- Treat people differently than your competitors do (treat them better)
When you are implementing these values in your brand, make sure that they go deeper than just your aims. Make these things that make you different the foundation of your business.
That means engraving these changes in the mission statement and instilling it in your staff. It’s important to note that your staff are your brand ambassadors. A good service experience means that people will come back and more than that, they will tell others about you too. Word of mouth is a powerful tool in launching a new business.
Degee says that the best marketing strategy they have is their car wash’s visibility.
In terms of marketing schemes available to you as a new business owner, you have a couple of easy options.
Available marketing options:
- Keep the conversation active with your customers
- Customer databases so that you can text or email them your specials (these must be opt in)
- Advertisements in local papers and on local sites
- Always squash any bad word of mouth by proving the opposite
- Consider loyalty reward programmes to encourage repeat customers.
Hiring and Managing Your Car Wash Staff
“Good management and good staff is the most important thing,” says Degee. With your staff often handling the money, it is easy for untrustworthy staff to “slip it into their pocket.”
Make sure your staff is reliable and Degee advises that you need to keep theft as low as you possibly can.
If you open a bigger operation than just yourself, or if you are needed to expand your business as it grows, then you will need to hire staff. Because you are in the service delivery industry, you need to remember that your staff needs to treat your customers well – as do you.
To this effect, hire people that are
- Have a good sense of service delivery.
The number of people you hire depends on your expected workload. The more washing and drying bays you have, the more people you will need. You also need to consider how many days of the week you are open and how many hours a day.
Obviously, if you want to go the more automated route with a machine run conveyor system, then the need for physical staff will be less.
How to Set Your Prices?
If you are going to give a variety of different services then you should have options for all budgets and time frames to suit the biggest market possible.
As with any service industry business – you need to have competitive prices for the services that you offer. It’s important to do some market research in your area as to what your competitors are charging for which services.
Important factors to consider:
- The cost of your cleaning supplies
- Your overhead costs
- The amount of cars you can do in an hour
- The number of staff members you have
- Your working hours for the week
- Competitor prices for similar services
- The type of area you are in (residential, urban, rural, business?)
For a mobile car wash it is important to consider many of the same factors including fuel price and distance travelled. In general, the cost of a mobile car wash service is higher than that of a car wash that a patron will go to because of the added convenience factor for the customer.
When deciding on prices for a mobile business, you will once again need to do current market research into what your competitors are charging.
To end off, it is important that you and your staff do a good job on the cars that you clean. The best way to get repeat customers is to supply the ones you have with an amazing service. For an in-depth tutorial on how to professionally clean a car – watch this video.
Advice from Car Wash Pros
Degee offers a few tips for an entrepreneur starting his own car wash.
- Trustworthy staff is hard to find. Sort that out before anything else.
- Sometimes, the easiest way to bring in new staff is through our existing staff.
- A high turnover rate brings the possibility of more theft – try keeping good staff for as long as possible.
For the International Carwash Association visit www.carwash.org.
3 Actionable Insights To Make Your Investment Pitch Perfect
The best pitches aren’t just short and to the point, they deliver on investor expectations and needs.
The best pitches aren’t just short and to the point, they deliver on investor expectations and needs.
1. Confront your product and market flaws from the start
Investors come from business and investment backgrounds. They will recognise the potential dangers in your business model. If you ignore these elements, you’re not addressing key concerns they may have, and how you will protect the business against them.
DO THIS: Look at your business from every angle. Where are your potential weaknesses, and what is your plan to overcome them?
2. Pitch to the right investors
The sectors and mandates that different investors and funds follow dictates the businesses that will interest them. Pitching your business to the wrong investors wastes their time, your time, and potentially damages your brand in the market place — waste the time of too many investors, and the word will spread.
DO THIS: Research the investors and funds you are pitching to thoroughly. This will narrow your focus, and help you develop your pitch deck. It will also help you unpack the areas of the business that you’ve discovered are important to the particular investors you’re pitching to.
3. Don’t follow fads
Investors aren’t interested in ‘flash in the pan’ business ideas. They care about products that stand a chance of long-term success. You might start off selling to a niche audience, but the goal must be to reach a wider audience as the product develops and matures.
DO THIS: Critically evaluate the staying power of your business idea. Is it a product that’s trendy but could lose traction as market fads change, or does it solve a real and enduring need?
5 Tips To Get You Ready To Launch That Business Now
Are you dreaming about becoming an entrepreneur, but not sure whether you’re ready to take the plunge? Some of the world’s top entrepreneurs weigh in on what it takes to be a success.
1. Think out the box
A general rule of thumb is that you should do what you know. Spend time in an industry before launching your business, build up a network and understand your target market and their needs. This is all sound advice, and has been the foundation of many successful start-ups.
However, there is an inherent danger that entrepreneurs should avoid at all costs: Many industries are bound by legacy ideas and systems that are the enemy of disruption and innovation. Entrepreneurs who didn’t know something couldn’t be done are often the ones who find a way to make it happen.
Approach an industry or idea with fresh eyes. Take lessons from other industries. Don’t be limited by your lack of knowledge — go out and learn, even if you’re learning on the fly.
Airbnb, Uber and Netflix are three of the most disruptive businesses in the world today, and they’ve achieved phenomenal success because they didn’t buy into the simple and engrained idea that an accommodation business should own property, a taxi service should own vehicles, or a movie rentals business needed to own DVDs.
If you really want to differentiate, you need to lead, not follow.
“Don’t be intimidated by what you don’t know. That can be your greatest strength and ensure that you do things differently from everyone else.” — Sara Blakely, Spanx founder and self-made billionaire
2. Be an open-source person
Have you been delaying launching your own business because you’re not sure if you’re ready? Some of the most successful entrepreneurs have taken the plunge and learnt along the way. Gil Oved and Ran Neu-Ner, founders of The Creative Counsel — South Africa’s biggest advertising agency with an annual turnover of R750 million — followed this simple rule in their start-up days: They always bit off more than they could chew, and then chewed like hell.
Their philosophy was that ‘no’ was never the end of a negotiation, but the beginning of one. This tenacity kept them going, even though they spent their first year barely making ends meet.
Gil and Ran are not alone in their thinking. Robin Olivier, founder of Digicape, a R240 million Apple products and services business, prepared himself for entrepreneurship by putting his hand up for anything and everything that came his way. “I’ve always been like that. I jump in with two feet and figure things out along the way.” For Robin, that’s the only way you learn.
Joshin Raghubar, founder of iKineo and the chairman of Bandwidth Barn and the Cape Innovation and Technology Initiative, began his career working for Ravi Naidoo at African Interactive. At 23, he found himself project managing the African Connection Rally, a massive partnership with the Department of Transport. Why? Because he was always ready to step in, learn something new, offer his opinion and take on any challenge.
Joshin believes that successful entrepreneurs are open-source people who are willing and able to consistently and continuously learn new things. If you’re moving forward every day, you’re already on the path to success.
3. Be significant
Start-ups are tough. They are lonely, and they take a lot from you physically, mentally and emotionally. Passion and significance are two key components that will keep you going through your darkest hours. If you can answer why you are doing something, you’ll be able to forge on, even when the challenges ahead seem almost insurmountable.
“If something is important enough, even if the odds are against you, you should still do it,” says Elon Musk, who isn’t letting go of his dream to colonise Mars during his lifetime, despite many challenging tasks ahead of him. The lesson is simple: Whatever you endeavour to accomplish, out of this world or not, do not allow yourself to be deterred by the odds. Bravely forge ahead.
Steve Jobs shared a similar outlook. Before entering into business with Steve Wozniak, he dropped out of college and took time off figuring out what he wanted to do with his life.
“Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work,” he said. “And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it.”
If you know you want to be an entrepreneur, but you aren’t sure what you should be doing or haven’t found the right business idea, think about the things that truly matter to you. What problem would you ultimately like to solve? Sometimes you need to build up to it, and start with one thing that will lead you to the next (consider how Musk built the Tesla to fund other parts of his business), but once you’re on the path to significance, nothing will hold you back.
“The key to realising a dream is to focus not on success but on significance — and then even the small steps and little victories along your path will take on greater meaning.” — Oprah Winfrey, self-made billionaire media mogul
4. Look for opportunities in every challenge
Some people see challenges, others see opportunities. The latter are known as entrepreneurs. Some of the most successful businesses have been launched in the midst of recessions. How? Because entrepreneurs aren’t daunted by a challenge. In fact, challenges are great, because they keep the competitive pool smaller.
Vinny Lingham, Shark Tank South Africa investor and serial entrepreneur, says that he would rather have been homeless than not start a company because he didn’t have any finances. He sold his house, rented back a room in his (now former) home, and launched Clicks2Customers, a business that hit the R100 million turnover mark three years later. He didn’t see the challenge; he focused on the opportunity.
You’ll have to keep a close eye on cash flow and find some really smart solutions to real-life problems, but that’s the foundation of a great start-up. It’s all about the lens you see the world through. Are you open to opportunities, or limited by challenges?
“Dear optimist, pessimist, and realist — while you guys were busy arguing about the glass of wine, I drank it! Sincerely, the opportunist!”— Lori Greiner, Shark Tank US investor
5. Failure is a critical element of success
Don’t let failure hold you back, or worse yet, keep you from trying. You already know that failure is a part of the business of entrepreneurship, but it’s easier said than done when you’re picking yourself back up after a bad break. Remember that with a shift in your perspective you can transform the stumbles and falls into opportunities to improve yourself and your business offerings. What didn’t work? What did? Keep at it — you only have to get it right once.
Oprah agrees. “At some point, you are bound to stumble, because if you’re constantly doing what we do, raising the bar; if you’re constantly pushing yourself higher, higher, the law of averages — not to mention the Myth of Icarus — predicts that you will at some point fall. And when you do I want you to know this, remember this: There is no such thing as failure. Failure is just life trying to move us in another direction.”
And what about Richard Branson? The billionaire mogul has launched more than 200 successful ventures, but he’s also had some dismal failures, including Virgin Cola and Virgin Brides. If he didn’t ‘screw it, just do it’ in the face of failure, where might he be today?
Instead, he believes in getting back up and pushing on. “The main thing is, if you have an idea for business, as I say, screw it, just do it. Give it a go. You may fall flat on your face, but you pick yourself up and keep trying until you succeed,” he says.
There’s no such thing as a successful entrepreneur who didn’t fail while they found their success. But, there are many, many entrepreneurs who haven’t found success because they’ve been too afraid to fail. Which will you be?
“Don’t worry about failure. You only have to be right once.” — Drew Houston, CEO of Dropbox
The 3 Blueprints For Starting A Business
There are three templates to starting a business. Get this first step right, and success will fall into place.
“One reason that America continues to do so well as a market,” an economist explained to the audience at a recent conference, “is that they are still leading the charge to do new things. In addition to pioneering new products, they are still pushing the boundaries of frontiers like space-travel and technology. They don’t merely copy the products made in other countries. They make and do entirely new things, and that matters.
“By contrast,” he explained, “many of the older economies, like Europe, are just ‘kicking the can down the road’. They don’t really have a vision for the future. They’re just trying to maintain what is, to survive a little longer.”
Grow or shrink
Companies, countries and entire economies are all broadly following one of these two approaches. One is the bold, growth option, while the other is only about maintaining what already exists. The trouble with maintaining, however, is that, in a dynamic system, you tend to be either growing or shrinking. A dynamic system rarely tolerates anything simply standing still. To stand still is, often, to shrink.
Once in a lifetime chance
Your company, team or organisation’s founding moment is a once-in-a-lifetime opportunity to get this one right. Are you simply going to kick the can down the road? Or do you want to build spaceships? Are you going to be a soulless ‘also played’? Or would you prefer to do something new and meaningful? Mission matters greatly.
In Exponential Organizations: Why New Organizations are Ten Times Better, Faster, and Cheaper than Yours (and what to do about it), Salim Ismail calls it a ‘Massive Transformative Purpose’. The stronger your purpose, the more you attract tribes of people, both as aspiring employees and as a supporting community of customers.
This is not to say that you are obliged to invent something brand new and original. A good deal of research is showing that pioneers in a new industry do not tend to do as well, or last as long, as the ‘settlers’ who come after them. One reason is that the pioneers have to make all the initial mistakes. The settlers get to enjoy greater leverage, by observing what has already worked or failed, then capitalising on that learning.
The idea of founding a company that thrives on meaning has more to do with how meaningful the work is, and how much of a drive to achieve goals is built into your corporation.
Elon Musk’s SpaceX is certainly not the pioneering organisation in space-travel. We have left earth’s atmosphere before, decades ago. In that sense, SpaceX is a settler, and not a pioneer. That said, it is nevertheless a strongly goal-oriented, purpose-driven organisation. You don’t have to invent something entirely new to create a mission-driven company.
The Israeli Defense Forces is highly mission-driven, because it has to be. Pixar is mission driven, because it chooses to be, and because it believes in magic.
Being mission-driven, from the top to the bottom of an organisation, changes the energy. It converts ‘mere work’ into ‘shared purpose’.
Sociologist James Baron and his group of experts led a study in the mid-90s looking at how people founded their companies, across a wide spectrum of industries, including hardware, software, medical devices, research and manufacturing.
The study asked about their original blueprints. What organisational models did they have in mind when they started?
Baron determined that there were three templates for starting a business. You might start your company based on:
- A Professional blueprint, in which you hire people with a preference for specific skills (prior to its fall from grace, Kodak hired people based on specific educational qualifications)
- A Star blueprint, in which you hire ‘superstars’ based on future potential, placing a premium on choosing or poaching the brightest hires. You look for raw potential, not current knowledge
- A Commitment blueprint, in which you believe that skills are nice, but cultural fit and buy-in to shared values is more important. You build strong bonds to the company. Employees tend to be passionate about the mission.
Baron and his experts tracked the firms through the 1990s and into the next decade. Those that used the Commitment blueprint, which prioritises a shared sense of mission and values, greatly outperformed the others. The failure rate for firms with a Commitment blueprint was zero.
Failure rates were substantial for the Star blueprint, and more than three times worse for the Professional blueprint. It seems these approaches don’t keep people going in the same way that buy-in to a mission does.
Nevertheless, the Professional blueprint, which prioritises the specific skills on people’s CVs, tended to be the most common.
There were two other rare blueprints: Autocracies and bureaucracies, focusing on detailed rules and procedures. These blueprints were the most likely to fail, and autocratic was most likely to fail out of the two. This is an important point: Rules-based organisations and dictatorships, according to this finding, are so likely to fail that investing in them is not worthwhile. But where a culture of people is part of a mission, they are most likely to succeed. Translation: Autocracy rarely ever works, and systems of intense rules and guidelines work slightly less badly.
Rules and dictatorships = likely to fail.
Mission-driven culture = 100% success rate.
Most real-world autocrats would probably agree with this finding, if they heard it. Then they would continue to run their business as autocrats, because, they’d say, “My situation is different, I happen to be right, and people should do what I say.”
When you’re an autocrat, it’s hard to know that you’re an autocrat. When you create your business to follow a mission from the word go, and you allow a degree of genuine democracy in which others can outvote you for the good of the mission, you instil the possibility of overcoming this blind spot, sometimes in spite of yourself.
Now, here’s the kicker: The Commitment culture is extremely effective in starting an organisation and ensuring its initial survival. But over time, the same study found, it is not the best performer.
The challenge is that when organisations mature, encouraging layer upon layer of like-minded people tends to discourage innovation and original thinking. Too much shared value = groupthink.
So, what’s our total moral? In a best-case scenario, we need to start with a common mission and committed people, and focus on growing. Once we’ve matured, we need to make a point of bringing in diverse thought, in order to avoid too much homogeneous thinking and yes-mannery.
In Originals: How Non-Conformists Move the World, Adam Grant shows how these findings map perfectly onto the rise and fall of Polaroid. Like-mindedness worked well to get the brand going initially, but then, ultimately, the same like-mindedness prevented them from learning, growing, changing and adapting in a volatile market.
Like the IDF, they had a strong sense of shared purpose. But unlike the IDF, they were incapable of a belief system that said ‘the only tradition is that we have no traditions’. They were not a learning and growing organisation.
The more a company develops a culture, the more it will tend to hire for that culture, and the more resistant its own people will be to new ideas or contrary views.
So what if…?
What if you decided to be an organisation on an important mission, rather than merely a group of people kicking the can down the road?
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