5 Top Misconceptions about Corporate Culture

Picture of hands rubbing a genie lamp and wishing for the right corporate culture

If you believe, as we do, that a healthy, purposeful and aligned corporate culture is what sets a company apart, you should be committed to promoting a culture that works.

But you can’t just magically wish an organizational culture into place. A corporate culture exists either by design or by default. It evolves from the way employees treat each other and can be measured by the way people think, behave and work. An aligned culture can have a significant impact on your bottom line. But you must go about it the right way.

Here are the five top misconceptions about corporate culture that you should know.

Culture is NOT:

  1. Just about fun
    Sure, people like to enjoy their work and have fun with their co-workers. Fun can be a wonderful part of a strong corporate culture, but what really matters and what keeps employees happy about coming to work each day is a more important and lasting and more purposeful attribute…like innovation, or authenticity, or service, or quality.
  2. Just about perks
    Perks like free dry cleaning and gourmet cafeterias are certainly appealing. They quantifiably add to the “plus” column when employees evaluate their levels of employee engagement. But unless those perks are connected to a core belief, they lose both value and appeal over time. External expressions of a culture alone don’t retain employees; a sense of purpose that underlies the organization does.
  3. Just a nice-to-have
    Culture actually matters to the bottom line. A positive culture engages employees and reduces turnover. People want to identify with a company that has a strong culture and positive brand. Engagement is symptomatic of high morale and high morale translates into high retention rates. The opposite is expensive. You pay the price of low retention in higher expenses and production gaps.Our organizational alignment research at 410 companies across 8 industries found that corporate culture accounts for 40% of the difference between high and low performing organizations. A strong culture can directly drive 58% faster growth and 72% higher profits.
  4. Just about behaviors and values
    This trips up even the most passionate culture practitioners. Yes, behaviors and values are an important ingredient for a healthy corporate culture.  Every organization wants to be healthy.We define cultural health, the little “c” of culture, as how values are lived consistently across the organization.  Those values manifest themselves in observable behaviors.  We believe that organizational health is necessary for success regardless of industry, geography or size.  We measure seven characteristics of organizational health in the areas of leadership, organizational trust, individual trust, individual capability, team capability, organizational climate and organizational capability.  We also believe that organizational health can be measured on a “good” to “bad” scale.  Organizational health however, is just the ticket to play the game and one component of the cultural fabric.

    The differentiating impact comes from the big “C” of culture in terms of its level of alignment with the corporate strategy.   A purposeful and aligned culture is the secret sauce -the DNA of an organization – that determines success or failure.  A purposeful and aligned culture means that teams are operating with the same objectives in mind, and approaching those objectives in the same way.  Because strategy must go through culture to produce results, how the company culturally views areas like customer intimacy, market leadership, focus, risk tolerance, process variation and decision making plays a key role in strategy execution.  Unlike the little “c” of culture, the big “C” of culture is not measured on a “good” to “bad” scale.  It is measured on a “aligned” to “unaligned” scale in terms of its ability to drive the strategy forward in a way that makes sense.

    Remember that a high performing culture is about both the little “c” (health) and the big “C” (alignment).

  5. Just defined by employees
    Employees reflect the values articulated and modeled by the organization’s leadership. Culture flows from the top. In companies where leaders understand this, they work to define their mission, what is unique about their organization and how they will treat each other on the path toward their business goals. Leaders can purposefully design the underlying values and assumptions that drive key business practices and behaviors across the strategic dimensions that matter most.As a leader, recognize how much organizational culture matters and be thoughtful about how you shape and cultivate it to move your strategy forward.

To learn more about defining an aligned and high performing culture, download How to Build a Purposeful and Aligned Corporate Culture.

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