Is Your Corporate Culture Good or Bad?
Smart leaders assess culture to determine if their corporate culture is good or bad for the people and the strategy. Why? Because they know culture accounts for 40% of the difference between high and low performing organizations in terms of revenue growth, profitability, customer loyalty, and employee engagement.
Corporate Culture Defined
Corporate 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 were 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 Good or Bad Defined
Culture in the corporate world is not all that different from general culture. 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 are harder to observe because they represent assumptions, values, and core beliefs.
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 40% of the difference between high and low performing companies. Additionally, your corporate culture will evolve over time whether you like it or not.
Shape Your Corporate Culture for Success
Only you as leader have the ultimate power and influence to shape the way work gets done – for good or for bad. The message? Decide what kind of culture will support your business strategy and then take purposeful steps to make it happen.
For example, if you are a business that needs to depend on innovation (e.g. Apple), you need to shape a workplace culture that has characteristics that encourage creativity and out-of-the-box thinking. You want people to be less constrained by “rules”, looking for “new and better” ways to get things done, unafraid of failure, learning from mistakes, and experimenting and re-working ideas.
If you are a business that, instead, needs to depend on productivity (e.g. UPS), you need to shape a workplace culture that is efficient and predictable. You want employees who are dependable, experts at their job, thrive on competition, are not content with anything less than perfection, and loyal to the company.
The Bottom Line
While corporate cultures can be healthy or unhealthy, we do not believe workplace cultures are good or bad. We believe corporate cultures are aligned or unaligned with their business strategy. Once you have clarified your business strategy, you need to explicitly align your culture with your plans for success.
To learn more about aligning your culture, download The 3 Levels of Culture to Get Aligned
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