What is corporate culture and why should you care?
Corporate culture, in essence, comes down to the way you do things in your company. In reality though, it’s so much more than that.
Corporate culture includes a shared set of values and beliefs embraced by everyone in the company. Values and beliefs that ought to be reflected in a company’s HR practices, from performance programs to the way projects are coordinated. It even goes right down to the way meetings are conducted.
For some organizations their corporate culture may derive from the story of how they were created and might define the symbols used in their logo.
It’s essentially the glue that holds your organization together, and can be a big reason people want to work for you and with you.
Yet corporate culture is often so little-understood and rarely front-of-mind for many business leaders, but we can’t stress how incredibly important its role is within your organization.
For example, you can hire someone with the best skills in the world, but if they’re not a good fit for your team, how long will they last in your organization? Imagine then the cost of having to hire someone to replace them. All that time spent interviewing candidates, orienting them and getting them up to speed; repeated twice! Or, what if the dress code in your employee handbook doesn’t truly reflect the culture of your company and you have employees visiting clients in khakis and an un-tucked shirt when you’d much prefer they wear suits and ties.
We could go on, but you get the idea.
Why would you want to define your corporate culture?
I recently read that, “When working towards company goals or when trying to affect change in the organization, your organizational culture can be the very thing that trips you up.” This couldn’t be more true. We’re often asked by organizations to help create employee handbooks or performance programs without first understanding their company culture (oftentimes because it’s not clear to them). It’s like trying to build a house without a foundation – it’ll look good for a short while, until the walls fall down!
What does corporate culture have to do with HR?
As in the example above, HR professionals are in the unique position of being able to implement policies and practices that integrate with the values and culture of an organization. HR systems created in this way can truly have a great impact on your business success. When it’s clear what your culture is, everything from how you hire and orient new employees to how you develop, motivate and even transition them out (if / when necessary) is aligned to that culture.
As the business leader though, once the HR practices are in place, ensuring that company culture remains top of mind at all times and in all actions comes down to you.
The majority (85%) of 365 companies surveyed in 30 countries in 2004(1) said their companies rely on explicit CEO support in reinforcing a company’s ability to act on its values. Of this percentage, 77% said CEO support was one of the most effective practices for reinforcing a company’s ability to act on its values.
As a leader, how can you help design (and define) your corporate culture?
If these are not yet defined, there’s no need to panic — they likely already exist but might not be written down. The best way to discover them is to seek out the person who created the company (which may be you) because, more often than not, corporate culture and values are conceived by the creator.
Start by asking the following the questions:
- Who are we?
- What do we believe in?
- What inspires us?
- Where are we going?
- What will it look like when we get there?
If you are the “creator”, work with your HR team to summarize these into statements that get down to the company’s core and reflect deeply held, non-negotiable principles. While doing this, always keep in mind the dangers of not living up to these values, which include mistrust, cynicism, dishonesty, a demotivated workforce and low staff retention. If you are going to invest time in defining them, make sure you stick to them.
Actions speak louder than words
Having achieved clarity around your corporate culture and values, it’s time to translate these into action. One of the surest ways to align your corporate culture with your overall strategy is to apply leadership practices that speak to them.
What I mean is that it’s not enough just to hang up a plaque in the office on which your values are written, or even to talk about them at meetings. As a business leader, you must explicitly support and reinforce your values and corporate culture with your actions and behaviour. You must also help create clarity around these values for your teams and encourage employees to adopt these principles.
For example, if you choose to set goals that align with your culture and values (which we highly recommend you do), invest the time to keep employees well-informed about how the company is doing in reaching them and any business developments.
You may also wish to create features in your HR practices that align with your corporate culture such as an annual holiday bonus, flexitime in the summer, or naming an employee of the month. Depending on your organization, these HR practices may help to bond employees and teams together and create a sense of collective identity, which is very important to the creation of a positive corporate culture.
Aligning corporate culture for success
Many companies struggle to connect values with the bottom line, however, according to Wikipedia, “Performance-oriented cultures have been shown to possess statistically better financial growth. Such cultures possess high employee involvement, strong internal communications and an acceptance and encouragement of a healthy level of risk-taking in order to achieve innovation.”
To this point, if you’re able to combine a well-established corporate culture with integrated HR practices, you’ll have a company that is actively driven towards its goals, and a workforce that is well-informed, motivated and productive.
It is important to note that organizations who don’t have a defined corporate culture, or one in which the rules are unclear or constantly change, or where employee input is not encouraged are said to have a negative or counter-effective corporate culture. Without the support of all employees and a dedication to corporate culture and values, the majority of companies will experience slow or limited growth and may even fail to survive long-term.
Which path have you chosen for your company?
How would you describe the corporate culture at your workplace or organization? We’d love to hear from you.
(1)Deriving value from corporate values, 2004, by the Aspen Institute and Booz Allen Hamilton Inc.