You’ve developed your company’s slogan and have a tagline that appears on every marketing piece and press release.
But what about your corporate culture? Can you describe it? Do you even have one? And if you do, is it the one that you want?
Make no mistake, whether you’ve actively created one or just allowed it to happen, your company does have a culture. It’s up to you whether it helps your business or harms it.
The Definition of Company Culture
There is the appearance of a corporate culture — the games in the break room or the formal dress code five days a week — and then there is the real corporate culture, where the values are inculcated throughout the business, starting with the recruiting process and continuing at every level and in every department.
But what is corporate culture? According to TriNet’s Culture is a Business Issue, corporate culture is “the identity and personality of an organization. It consists of the shared thoughts, assumptions, behaviors, and values of the employees and stakeholders… Culture exists in every organization, whether it is by design or by default.”
You may not have consciously developed one but it’s present nonetheless. Just ask your employees what the priorities are for the business or how performances is measured or rewarded. Or ask customers why they choose to do business with you — or, for those who have gone elsewhere, what motivated them to leave. All those reasons and explanations provide insights into your company’s culture.
The Relationship Between Culture and Success
You might think it’s your product or service that drives your financial success but culture also plays a subtle, behind-the-scenes role. As the TriNet article pointed out, “an organization’s culture may be one of its strongest assets or it can be its biggest liability.”
Let’s start with the impact the corporate culture can have on staffing. According to Luanne Kelchner in Importance of a Healthy Corporate Culture, when the culture is unhealthy, employees work for their own reasons and feel little connection to organization. Morale is low, which leads to reduced productivity. Turnover is up, increasing the costs for recruiting, hiring and training.
But in a healthy corporate culture where each member feels valued regardless of their position or job title, wrote Kelchner, employees work as a team to meet the company’s goals as well as to satisfy their own personal needs. Both productivity and the level of quality rise, leading to promotions and awards for the staff and a higher level of profitability for the company.
In her article, Culture Matters: Why Is Corporate Culture Important?, Jamie Nichol cited a Gallup meta-analysis of 1.4 million employees that linked employee engagement, a positive workplace culture and profitability, writing that “companies in the top-quartile of employee engagement are 22% more profitable than those in the bottom-quartile.”
As for recruitment, when a company is known to be a good place to work, where the “walk” matches the “talk,” then it will attract a better class of job candidates who want to be there and, if hired, will stay. This definitely plays a role when the candidates are millennials, according to Greg Besner. In Why Company Culture Is More Important Than Ever, he wrote that millennials, unlike previous generations, look at “company values, meaning, community, and culture” when choosing what job offer to accept.
The corporate culture is also tied to your company’s reputation and how it is perceived in the marketplace among its peers and customers. When a company has a healthy culture, its stock, both financial and metaphorical, increases in value. Customers may prefer to do business with companies whose values match their own, while competitors will be forced to “up their game” if they want a piece of the market pie.
But if culture is that essential to success, why does it so often get short shrift among business owners and managers? Because it requires time to develop what Babette Ten Haken calls a “corporate culture value proposition.” As she explained in What’s Your Corporate Culture Value Proposition?, “Your goal, in building a corporate culture of worth, is for each customer, post implementation, to be able to clearly articulate the value that your organization delivers to them… You simply can’t create a sensational-sounding corporate culture value proposition if your organization is unable to walk that talk.”
And to get your organization ready to “walk the talk,” you need to articulate all the components of the culture clearly and concisely, and then have a mechanism in place to monitor adherence, solicit feedback and adjust as needed.
As the TriNet article noted, “Company culture is unique and provides arguably the most sustainable competitive advantage an organization can have in the marketplace for distinguishing itself against the competition. … The stronger the culture and the brand, the more difficult it is for competitors to pose a threat to the organization.”
Creating a Healthy Culture
There is no one-size-fits-all model for a healthy corporate culture. What works at a technology firm in Silicon Valley probably won’t work at major health system based in the south or a manufacturing firm in the Midwest.
But there are some common denominators that you can employ when developing your own corporate culture, as listed by Tiffany Black in 12 Ways to a Great Corporate Culture. These include valuing your employees’ opinions, sharing your vision for the future with all members of your company and actively encourage a sense of camaraderie. As part of your culture-change process, ask for input from all levels regarding what needs changed and how to make the change.
Culture, like fingerprints, is unique to each organization. Once you have defined the culture you want for your company and established the framework and expectations that will support that culture, focus on making it work, not on what is working for the company down the street.
Then, wrote Peter Ashworth in Why Company Culture is So Important to Business Success, acknowledge those who “live your culture.” “The most common mistake in regards to company culture is defining it, only to soon forget about it,” he wrote. “If culture is important to your company’s success, address it often and often publicly recognize individuals, teams or units that exemplify or demonstrate what your culture is and what you aspire to be.”
Discover what Transformation Point can do for you and your company. Take advantage of a unique opportunity to have a one-hour telephone consultation with Transformation Point founder and CEO Kevin L. King, when he’ll help you better define your challenges and provide ideas on how to address them. Call 888-202-3411 today or schedule a consultation today!