One way to think of corporate culture is what employees do when the CEO is not in the room.
When no one is watching, how do your employees behave?
The norms that guide their behavior when they are on their own are the basis of a company’s culture. According to Frances Frei and Anne Morriss at Harvard Business Review, it is organizational culture that “guides discretionary behavior and it picks up where the employee handbook leaves off.” We agree. Our organizational alignment research found that cultural factors account for up to 40% of the difference between high and low growth companies.
For example, what happens when a customer service rep is faced with an extraordinary request? The rep must decide how to respond. A strong company culture will guide possible reactions from one end of the spectrum to the other. A rep inured in Zappo’s culture will most likely have the discretionary power and will to provide extraordinary customer service. A rep guided by a less customer-focused culture (my cable provider comes to mind) might ignore the request because it takes too much time and effort to understand the problem or push it on up the ladder for someone else to figure out.
In your own organization, think about what happens when an employee encounters a problem on the job. Do they feel comfortable solving it or reporting the situation to a superior? Or do they hope someone else will notice and become the bearer of bad news? A company culture where everyone feels responsibility for and ownership of the company’s success is one where problems are pointed out early enough to be dealt with before too much damage has been done. A corporate culture that keeps employees fearful of the consequences of pointing out issues is one where problems go undetected until they grow too large to handle easily.
What happens when an employee comes up with a great idea for improvement? In an open environment, a new idea can be considered and tested by the team. Ideas for doing things better are always welcomed. In more closed or toxic cultures, good ideas may never be aired and many opportunities for improvement lost.
So corporate culture matters. But who is responsible for creating it…
Our research shows that the answer needs to be a fine-tuned combination of leadership, HR, and the employees.
First and foremost, leaders should work with employees and senior managers to determine just what kind of organizational culture they want to best execute their business strategy. When it comes to effective corporate cultures, our research showed that highly aligned companies’ employees:
What corporate culture will help you best achieve your goals in a way that makes sense?
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