A Harmful Corporate Culture Can Destroy Your Company
Your culture exists by design or by default. If you and your leadership team do not proactively shape your workplace culture to align with your strategy, your beliefs and practices can morph into a harmful corporate culture that can derail your people, your customers and your business.
The Definition of Workplace Culture
We define company culture as the way work actually gets done in an organization on a day-to-day basis. It includes the overall purpose of a company’s workforce and their collective attitude, assumptions and behaviors. When company culture is aligned with company talent and business strategies, you have an unbeatable combination of factors that drive success.
Culture Accounts for 40% of the Difference
Corporate culture matters to the success of an organization. Our organizational alignment research at more than 400 companies across eight industries found cultural factors account for 40% of the difference between high and low performing companies in terms of revenue growth, profitability, customer satisfaction, leadership effectiveness, and employee engagement.
Yes, for sure, workplace culture matters.
Three Examples of Harmful Organizational Culture – Brought to You By United Airlines
But there is a risk in being too rigid in the way culture is defined and interpreted. From passengers being dragged off planes to dogs dying, United Airlines harmful corporate culture may have cost United over $800m overnight. Here are three ways harmful corporate culture can manifest.
You only need to look at United Airlines’ recent disastrous negative publicity to see how they blew it.
1. Too Much Fine Print
From the recent reports, it appears United Airlines relied too much on “policy” guidelines that were overly complicated and confusing. It seems the company expected employees to follow policy no matter what. If you have ever stood at a customer service counter with a legitimate complaint and been told “it’s our policy,” you know how inadequate that explanation can be.
In United’s case two teenagers were denied their flight because of “inappropriate” attire – leggings for heaven’s sake! And just two weeks later, a passenger was dragged off the plane (and injured in the process) as a result of the airline’s policy of overbooking seats.
Employees were so-called “prisoners” of ill-conceived and inadequately explained policies; they made poor decisions that hit the headlines and dramatically hurt the organization in the public eye. Make sure your culture does not allow leaders to create an environment where employees feel like they must:
2. Too Little Employee Discretion
A strong, positive and healthy corporate culture should help employees make the right decisions in both low and high stress situations. If common sense had been at work, as well as the flexibility for employees to make humane and reasonable decisions, neither of these situations would have occurred.
The teenagers would have been granted their seats. The overbooking would have been handled without the use of physical force. And most recently, a dog would not have been placed in an overhead bin without access to air.
A company’s cultural goal should be to empower employees to serve their customers without having to read the fine print of company policy or without being afraid of “doing the right thing.”
3. Misaligned Performance Metrics
United Airlines, not unlike Walmart, focuses on being operationally excellent. The goal is to provide customers with timely, reliable and convenient flights at competitive prices with minimal inconvenience. Unfortunately, based upon United’s customer experience, it seems that United only cares about keeping costs as low as possible and meeting departure time targets while other performance metrics, like customer satisfaction, are ignored.
In 2013, United ranked last in airline quality ratings. In 2017, United ranked eighth ahead of only one regional carrier and two ultra-low-cost carriers.
While a strategy of operational excellence and an organizational culture that aligns with that strategy can certainly be effective (e.g. Walmart and Dell), United is learning that you cannot compete without a satisfactory level of customer intimacy. Southwest Airlines is a classic example of an airline delivering competitive pricing while delivering a compelling customer experience.
Misaligned performance metrics can cause cultural havoc on a business strategy. From the outside, it sure seems like United could create better results by better balancing how they measure operational excellence and customer intimacy.
The Bottom Line
To thrive, we believe companies need be on the lookout for warning signs of a harmful corporate culture. Strive to simplify and reinforce policies that align with your strategy, give employees discretion to carry them out in a way that is in the best interests of the customer and the organization and align success metrics with what matters most.
To learn more about the early warning signs of a harmful corporate culture what to do about it, download The 3 “C’s” that Create a High Performance Culture
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