7 Steps to Set the Direction for a Healthy Corporate Culture

Picture of a compass representing a Healthy Corporate Culture

Most Companies and Employees Want to Create a Healthy Corporate Culture
A healthy corporate culture matters.  Culture exists by design or by default. Every company has a way they do things…for better or for worse.

  • For better, your employees come to work with a clear sense of purpose and care about turning in their best performance for the right reasons.
  • For worse, the corporate culture can be so toxic that the company enters a downward spiral that can only end in failure.

Is your company culture good or bad? Where are you on the continuum between a healthy and toxic workplace culture?

An Example of an Unhealthy Corporate Culture and What Made It So

  • General Motors is a classic example of a culture that was rotting from the inside.
  • Remember the case of the defective ignition switches that disastrously resulted in up to 300 fatalities?
  • According to the US Attorney, it took more than eleven years for GM to take the necessary actions to fix the problem.
  • Even though GM espoused the values of integrity, safety, accountability, quality, and customer focus, it allowed itself to be infected with a culture of avoiding accountability, stifling bad news and caring more about cost control than the safety of its customers.

Five Warning Signs of an Unhealthy Culture
In our two plus decades of working with clients and observing a variety of corporate cultures, we have come up with a list of warning signs that can lead to a failing corporate culture.

1. Unstated or Unclear Values, Beliefs and Assumptions
When expectations are unclear, performance results become unclear. Unless an organization’s values and behavioral expectations are specifically stated, clearly explained and consistently reinforced, your default culture may significantly inhibit your success. In GM’s case, while the values seem to have been clearly stated, they do not appear to have been monitored or reinforced.

Unfortunately, we often come across leadership teams that proudly display their core values, but make no effort to embed them across their organization.

2. Weak Leaders Who Do Not Practice What They Preach
When employees see a double standard, your desired workplace culture is in big trouble. Unless the vast majority of leaders consistently model your chosen company culture, it has little chance to cascade throughout the organization and motivate people to do their best.

At GM, the US Attorney identified a consistent unwillingness to raise problems for fear that it may delay the launch of a vehicle, cause reprisals or increase costs.

3. Lack of Accountability
When substandard performers who do not improve are tolerated and retained, top talent often becomes discouraged, engagement levels decline and performance standards slip. Additionally, unless the majority of high performers consistently live your company’s desired culture, how can you expect your weaker players to get on board?

4. Closed Communications
When the information flow across an organization is untimely, gossip and behind-closed-door communications undermine trust and defeat the kind of collaboration that successful teams enjoy.

5. Overwork and Overstress
When there is too much work pressure, poor decision-making, errors in judgment and levels of disengagement increase dramatically. Unless people believe that the “struggle is worth it,” you cannot increase performance pressure to improve results.

An Example of a Healthy Corporate Culture and What Made It So
Zappos, the online retailer, loudly proclaimed customer service as its core value and then backed it up by empowering their employees to do whatever they felt necessary to satisfy their customers. The expectations were clear and leaders were role models for ensuring that each and every customer was delighted with Zappos’ service.

Seven Key Features of a Healthy Corporate Culture

  1. Employees understand, care and believe in the company’s vision and mission.
  2. Employees experience the desired corporate culture on a regular basis and are proud to be a part of it.
  3. The culture motivates the majority of employees to do their best in their job.
  4. Employees believe the corporate culture is essential to achieving the business strategy.
  5. The majority of leaders and high performers consistently model the desired organizational culture.
  6. Substandard performers receive support and must improve if they wish to remain employed.
  7. Open communication allows for the free and timely exchange of information, ideas and concerns.

What You Can Do to Create a Healthy Corporate Culture
Set the direction for a healthy corporate culture by opening up communication. Work with your team to zero in on the way you want people to think, behave and work. Hold senior managers and employees alike accountable for modeling the desired culture. Promote collaboration by rewarding teams rather than individuals. Seek long-term success over short-term gain.

The Bottom Line
Culture matters…matters a lot…not only for the overall health of the organization but for its success.

To learn more about creating a healthy corporate culture, download: The 3 Most Important Levels of a High Performance Culture to Get Right

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