5 Warning Signs of the Wrong Direction for a Healthy Corporate Culture

Most Companies and Employees Want to Create a Direction for a Healthy Corporate Culture
Setting the direction for 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.

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 seems like it 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.  How can you keep your company from falling into the same traps?

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 little 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 becomes discouraged, engagement levels decline, and performance standards slip. 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. If workplace politics are high in your organization, you may have an unhealthy culture brewing.
5.  Over-work and Over-stress
   When there is too much performance pressure at work, poor decision-making, and errors in judgment, 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.

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 a company culture of collaboration by rewarding teams rather than just individuals. Seek long-term success over short-term gain.

The Bottom Line
Our organizational alignment research found that workplace culture accounts for 40% of the difference between high and low performing organizations,  Overall organizational health matters.

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