In the past weeks I’ve run into many great articles about Company Cultures. So many actually that I started to think it makes sense to do some sort of a series of posts on Corporate Cultures. So far I’ve captured them around 3 themes:
- Why – what’s so important about Corporate Culture?
- What – are there building blocks that get make up a Corporate Culture?
- How – Corporate Cultures can not, should not be replicated because every company is different
This is the first post, giving insights in ‘Why’, combining:
I wrote before about the potential of having a great company culture.
The question that remains is ‘Why’?
Why is it that many of the same companies appear repeatedly on lists of the best places to work, the best providers of customer service, and the most profitable in their industries? In their new book, The Ownership Quotient , HBS professors Jim Heskett and Earl Sasser and coauthor Joe Wheeler assert the answer lies in recognizing that strong, adaptive cultures can foster innovation, productivity, and a sense of ownership among employees and customers. […] We can learn a great deal from organizations whose strong and adaptive ownership cultures give them a powerful competitive edge.
I’d like to focus on that learning… Let’s see what the first article gives us.
Leadership is critical in codifying and maintaining an organizational purpose, values, and vision. Leaders must set the example by living the elements of culture: values, behaviors, measures, and actions. Values are meaningless without the other elements.
Which means that…
…Like anything worthwhile, culture is something in which you invest. An organization’s norms and values aren’t formed through speeches but through actions and team learning. Strong cultures have teeth. They are much more than slogans and empty promises.
…Employees at all levels in an organization notice and validate the elements of culture. Their reactions often come through in comments about subjects such as the “fairness of my boss.” The underlying theme in such conversations, though, is the strength and appropriateness of the organization’s culture.
…Organizations with clearly codified cultures enjoy labor cost [and other] advantages.
And it doesn’t stop with that…
…Organizations with clearly codified and
enforced encouraged cultures enjoy great employee and customer loyalty.
But don’t forget that…
…An operating strategy based on a strong, effective culture is selective of prospective customers. It also requires the periodic “firing” of customers.
Which is great, because it results in…
…”the best serving the best,” or as Ritz-Carlton’s mission states, “Ladies and gentlemen serving ladies and gentlemen.”
Keep in mind that…
…High-performing organizations periodically revisit and reaffirm their core values and associated behaviors.
Because if you don’t…
…Cultures can sour. Among the reasons for this are success itself, the loss of curiosity and interest in change, the triumph of culture over performance, the failure of leaders to reinforce desired behaviors, the breakdown of consistent communication, and leaders who are overcome by their own sense of importance.
How was that for a learning experience? But we’re not there yet, are we? I thought the article useful, though not yet giving me the real ‘why’, the what’s in it for my company. It is, like many articles on the web unfortunately, not concrete enough. Which is exactly the reason to highlight a few points from the second post. Concrete points of benefits of a great Company Culture, points if tried to group in people, functional and health/wellness related benefits.
The first group, ‘people’ benefits are the most discussed. I included a short list out of the article, and encourage you to read them all in the original article:
Increased morale is a key to success. It is closely connected to trust, purpose, team loyalty, pride, and faith in the leadership — all qualities that improve as the culture develops. Employee Motivation blossoms in a well-developed culture that recognizes the employee’s personal work needs and desires and allows people to fulfill these needs through the business tasks. When people are recognized and appreciated for who they are and what they can contribute, the two-way benefits are large and unending. When the leaders show that they want everyone involved, people step forward energetically in creative and productive ways. And additionally a great culture lead to better Teamwork, Relationships, and so develops people’s sense of Responsibility for their work. Which in turn increases self-organization and adaptability to change. And of course, perhaps most important, satisfaction and happiness go hand-in-hand with improved performance.
Often less thought about are the potential benefits in functions. Company’s are complex systems that drive on actions and interactions of people, people work in functional departments (or -project- teams). It thus makes common sense that functions subsequently see benefits. These benefits are easier to quantify, though not always easy to relate to an investment in Culture, give them a thought as metric for that investment.
Finance – A culture that deeply engages people is understandably much more productive. A 10% increase in productivity is minimal. Unit productivity often doubles in 2 years… Because the developing culture creates across-the-board improvements, increased profits are inevitable and large.
Supply Chain – As the culture develops, relationships, cooperation and communications improve. The supply chain becomes more efficient, streamlined and responsive to rapidly changing markets, technology, and customer needs.
Customer Service -As the culture builds, managers learn to better manage the quality of everyone’s experience, inside the company and with outsiders such as customers, clients, suppliers, and other corporate entities.
A last set of related benefits seem to occur around health and well-being. Again, look at the company as a system where action and interaction influence each other. I kept the descriptions short to -hopefully- increase the ease of seeing the relationships (again, the full descriptions are available in the article link provided waaaay up).
- Increased Safety – The keys to safety are trusting, open relationships.
- Leads to reduced Absenteeism – It is common sense that there will be less absenteeism when people like their jobs.
- Which in turn reduces Injuries and Claims – This is a complex area, closely related to attitudes and relationships.
- Turning logically in lower Insurance Rates – Along with a safer workplace, with fewer injuries and claims, come lower insurance rates.
- And all together improve Union-Management Relations – Cooperative relationships have few grievances and low workers compensation costs.
Of course I can’t guarantee that adding it all up is indeed leading to outperforming others by 400%… I do hope that I’ve been able to make clear why I believe it pays of to Design A Better Corporate Culture!
Featured image found on The Financial Adviser Coach