What Makes a Corporate Culture Good…or Bad?

Picture of people rating their corporate culture good or bad

Culture Defined
When you think of “culture” outside the corporate world, terms like “hip-hop” or “the arts” may come to mind. Broadly, culture is the set of beliefs or practices that are characteristic of a certain group of people. Over time, cultures develop because they are useful for success and survival.

For example, early studies of African, Eskimo and Native American societies revealed ways of living that were not only different from western societies, but were also very different from each other. It was found that each population had its own unique way of adapting, surviving and thriving together. These traits are passed from one generation to the next because they are believed to be useful for survival and adaptation. The same is true in business.

Corporate Culture
Culture in the corporate world is not all that different. We define culture as “The Way” things get done within an organization. Every company and team has its own unique way of doing things. “The Way” endures because it makes sense to the people of the organization. “The Way” represents smart and proven strategies for success and survival that have worked well in the past and should work well in the future. Some aspects of corporate culture are very easy to see – i.e. how people dress, when they show up to work, how they treat customers.  Other facets of organizational culture are harder to observe because they represent assumptions, values and core beliefs – i.e. honesty and integrity, putting employees or customers first, or collaborating with teammates.

The Impact of Culture in Business Performance
Regardless of whether the cultural attributes are observable or not, they matter.  Our latest organizational alignment research found that cultural factors account for almost 40% of the difference between high and low growth companies.  Additionally, your corporate culture will evolve whether you like it or not. Only you as leader have the ultimate power and influence to shape it…for good or for bad. The message? Decide what kind of culture will support your business strategy and then take steps to make it happen.

If you are a business that needs to depend on innovation (e.g. Apple), you need to create a culture that has characteristics that encourage creativity and out-of-the-box thinking. You want employees who are not constrained by “rules” and who like to dream; who are not into competition per se but are looking for “new and better;” who are not afraid of failure but learn from their mistakes and set off in a new direction; who experiment and re-work their ideas in a spirit of collaboration because it’s not just about them but about making a positive difference.

If you are a business that, instead, needs to depend on productivity (e.g. UPS), you need to create a culture that is efficient and predictable. You want employees who are dependable; who are the very best at their job; who thrive on competition; who are not content with anything less than perfection; who are loyal to the company because the company is loyal to them.

Neither of these cultures is good or bad and neither is exclusive of the other. In fact, they will often share traits. The point is that once you have clarified your business strategy, you need to explicitly shape the performance culture that is most aligned with your short- and long-term goals. This sets you up to find the unique talent that will be attracted to and display the cultural behaviors that you seek.

So, to answer the question we began with…what makes a culture good or bad? A culture is good when it aligns with and promotes your business strategy. A bad corporate culture gets in the way of hitting your targets in a way that makes sense.  As a leader, be intentional about creating a corporate culture that supports and accelerates your strategy.

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