Company Culture is the Only Durable Capital

I was impressed when I listened to tech billionaire, Sridhar Vembu, CEO and Cofounder of Zoho at ZohoDays in Austin this past week. It’s the annual conference where the company gathers the analysts from around the world to discuss the future of their business.

My any measure, Zoho is one impressive privately held company serving small business owners: 8,000 people, 50 million users, and 45 integrated applications. It is a company that has built all its own technology from the ground up; no acquisitions or outside capital. They even run their own infrastructure using no public cloud services.

Sridhar did not give the typical CEO presentation. He left the metrics, growth statistics and new features to others in the company. Instead, Sridhar talked about growing a business in today’s market environment.

He started with a few warnings:

  • When you sell a commodity, the consumer names the price! (In other words, sell something that is more valuable than your competitor.)
  • Digital marketing on the most popular platform become very expensive. (In other words, don’t be afraid to use in person or personal outreach in your marketing.)
  • Financial capital is a moat. (In other words, you do need money to grow a company to a certain size.)
  • Avoid competitive consumption. (In other words, don’t consume, just because others are doing it.)

Sridhar then discussed the importance of culture in operating a successful company:

  • Company culture is the only durable capital.
  • Culture eats financial capital and strategy.
  • Culture provides resiliency to face diversity.
  • People are happier and more productive in small groups.

I have always preached to small business owners the importance of establishing and maintaining company culture; that they need to hire for cultural fit and not just skills. I agree with Sridhar that even if you have all the financial capital that you need, without a solid company culture, the business ultimately fails. This is because there is no unifying mission or belief that keeps the team together during difficult times like leadership and market changes.

Finally, people are happier and more productive in small groups. It allows them to feel they are on a team where they are part of something bigger than themselves. After a while, they feel an obligation to achieve their goals and do their part for their teammate not just the bigger company mission.

Check out the all in one solutions Zoho provides for small business.



By | February 1st, 2020|Business, Leadership and Management|Comments Off on Company Culture is the Only Durable Capital

About the Author:

Barry Moltz has founded and run small businesses with a great deal of success and failure for more than 25 years. He is a small business expert that helps companies get unstuck. Barry is a bestselling author, in-demand keynote speaker, and dynamic radio talk show host.