Understanding Corporate Culture: Impact and Key Elements
Corporate Culture
Beliefs and behaviors that determine how a company’s employees and management interact and handle outside business transactions.
Corporate culture is:
- Shared
- Pervasive
- Enduring
- Implicit
It Implies:
Behaviors observed regularly in the relationship between individuals.
The norms that are developed in the working groups.
The philosophy that guides a company’s policy regarding its employees or customers.
The dominant values accepted by a company.
The “rules of the game“, that is, the ways that a newcomer must learn to be accepted as a member of the group.
The environment or climate.
6 Components of a Great Corporate Culture
Vision – The mission that a company has to set, a simple phrase (vision statement) that characterizes the purpose of the firm.
Values – The set of guidelines on the behaviors and the mindsets to achieve the company’s vision.
Practices: The company has to demonstrate that it follows its values.
People: In order for a company to build a coherent culture, they should hire people with the ability and the willingness to embrace their values.
Narrative: The ability to craft the unique story of the organization into a powerful narrative, in a formal or informal way.
Place – Shapes culture; geographical place, architecture of a building, and design of the office are very important.
Link Between Culture and Outcomes
Top leaders and founders express cultural sentiments: Enjoyment, Result, Authority, Safety, Order.
These frameworks can also be used to define individual styles and values of leaders. Culture that emphasizes caring and order encourages a work environment. Managers can: understand, evaluate, identify, pinpoint, orient, measure, and design.
The past is different from the future, and companies are different from each other. Strategy + Leadership = Positive Results. Focus on the first priority. Combine results and caring. Have all values clear. Take into account culture.
6 Signs Your Corporate Culture Is a Liability
Risk #1: Inadequate Investment in People
This is the factor most predictive of cultural risk, and so it follows that an investment in your employees is an investment in a healthy culture, and ultimately in better business outcomes.
Risk #2: Lack of Accountability
When employees are under the impression that there are no consequences or that consequences are handed out unevenly, they may use it both as a justification for not reporting poor behavior (why bother?) and as a reason to be less careful about their own actions.
Risk #3: Lack of Diversity, Equity, and Inclusion
The #MeToo movement was a much-needed wake-up call for corporate America. With matters of sexual harassment and gender discrimination at the fore, more than half of companies revisited their policies, while others appointed diverse board members, established diversity & inclusion (D&I) councils, strengthened their employee resource groups, and tackled non-inclusive ways of working.
Risk #4: Poor Behavior at the Top
We all know that employees take their cues from those in authority, which is why it’s not surprising that poor behavior at the top is also a predictor of cultural risk.
Risk #5: High-Pressure Environments
Unrealistic deadlines, overly aggressive sales targets, and poorly structured incentive systems can lead people to take extreme – and often illegal – measures to deliver business results.
Risk #6: Unclear Ethical Standards
Employees whose companies have values don’t feel confident explaining them, and employees can’t live what they don’t know.
To Build a Strong Culture, Create Rules That Are Unique to Your Company
To build something distinctive in the marketplace, you first have to build something distinctive in the workplace. It also speaks to the role of “shocking rules” as a building block of a powerful culture. In other words, if you’re doing things at your company that outsiders can’t quite understand, you may just be doing it right.