Across industries, companies are learning that a strong corporate culture that values and develops the company’s own human capital is an essential asset in today’s highly competitive marketplace. Experts point out that employees who feel that their values and those of their companies are well-aligned are more likely to work at peak performance and help the organization to grow.
Read on for some important insights into the importance of a company culture.
Building—and fixing—corporate culture
In their 2011 book Corporate Culture and Performance, John P. Kotter and James L. Heskett provide a comprehensive overview of the ways in which a company’s culture can either foster its economic success or create problems. Their research, focused on the cultures at major firms such as Hewlett-Packard, Nissan, Xerox, and hundreds of others, resulted in a range of insights about how positive and negative qualities of organizational cultures emerge and cement themselves over time.
One of the key takeaways of Kotter and Heskett’s book is their insight that “strong” organizational cultures do not automatically lead to exceptional economic performance. They point out that although a number of common norms and best practices can often foster success, these same traits can exist within cultures that have become overly bureaucratic, solipsistic, and dysfunctional, leading to a difficulty in embracing beneficial change. Furthermore, even when a corporate culture aligns well with a company’s strategic plan, it must still be able to adapt to shifts in markets and against a dynamic competitive background.
In any case, Kotter and Heskett advocate for increasing the quality of leadership as an essential step toward building a healthy organizational culture and keeping it responsive to ongoing challenges. The heads of the successful companies they studied focused on delivering strong, positive, and relevant new vision statements while modeling strong leadership and a customer-focused attitude for their managers and staff at each tier of the organization. This type of responsive leadership not only creates a high-functioning corporate culture, but it can go a long way toward repairing one that has become ineffective.
Creating a supportive culture
In a 2017 interview with Time, author and HuffPost founder Arianna Huffington outlined some of the qualities she finds important to fostering a strong and effective organizational culture. One of these is a concentration on transparency and openness. When leadership is open about problems, the company is better able to correct and learn from these mistakes—often even recognizing and addressing challenges before they become major problems.
Huffington also emphasized a topic much discussed in business circles today: building a support system to help managers and staff (top executives included) to avoid burnout and achieve a workable balance among responsibilities in all areas of their lives.
Focusing on staff-driven ideas
A 2018 piece in Forbes magazine offered a list of practical actions, sourced from experienced CEOs, that companies can take to bolster the effectiveness of their cultures.
One company, dataxu, holds an annual “Innovation Day,” in which staff forgo their usual duties to work on various prototypes and concept development projects. After the innovation teams demonstrate their products, the whole group votes for the ones they like best. The company has already put more than half the Innovation Day ideas into practice.
Being flexible to nurture new insights
Another item from the Forbes article advocates allowing staff to work from home or another off-site location. Some companies even allow staff to plan working vacations abroad and use online tools such as Slack to stay in the loop on important projects. Employees appreciate the flexibility, and they return with fresh perspectives.
Setting perks according to values
Brett Farmiloe, the CEO and founder of Markitors, stresses the importance of making sure that employee perks are in line with overall organizational values. One of his company’s values is “You Are Unique,” and in recognition of everyone’s individuality, each employee receives a paid day off on their birthday.
Other ideas for perks include sponsoring community engagement through company volunteerism, providing generous opportunities to use time off, and offering casual spaces that foster conversation, such as a coffee bar or break room.
Flattening hierarchies to enhance communication
The 2018 book Entrepreneur Voices on Corporate Culture, by the staff of Entrepreneur magazine, points out that a company’s culture is defined starting at the top.
The book suggests flattening out hierarchies and communication structures, which can ensure that a greater range of voices and opinions are heard by top management, leaving employees with the freedom to express themselves without fear of retribution. This method also gives leaders the opportunity to learn of potential problems from those who often see them first: the staff working at the front lines of the organization.
The book also notes that successful corporate cultures foster collaboration, strategic risk-taking, informed decision-making, and trust and respect among all levels of a company.
Establishing a shared vision
Among its other lessons for CEOs, the Entrepreneur book notes that corporate culture is formed at a much deeper level than that of perks, as welcome as those may be.
In order to become truly successful and competitive in its field, a company should concentrate on establishing a foundation of shared vision, principles, and goals on how it does business, as well as how it treats its employees, customers, and the wider community.