Why culture matters (now more than ever)

The need for a codified corporate culture becomes clear when you consider how the internet and, more importantly, social media amplify employee and brand mistakes. Misunderstanding a hashtag reference or picking a questionable image might not be eliminated, but culture can inform employee choices and set expectations for promoting the brand and serving customers.

This is nothing new

In 1951 post-World War II Japan, Dr. W. Edwards Deming was honoured with the Deming prize, aptly named for him as the first recipient. Working on reconstruction with the US Army, Deming was instrumental in helping the Japanese rebuild their economy. His 14-point philosophy on continuous process improvement starts with ‘creating constancy of purpose’, and ‘adopting the philosophy’. He urged management to ‘take on leadership for change’. These principles, in conjunction with his expertise in statistics, helped companies like Toyota and Sony achieve international success in product development.

Based on those results, US companies clamoured to have Deming participate in their improvement revolution. After sustaining losses of $3bn from 1979 to 1982, Ford Motor Company solicited Deming to help develop Ford’s quality culture. Instead of receiving the statistics and tools for the assembly line they expected, Ford was lectured on management and its responsibility for building a quality culture. Six decades later, culture is even more relevant to businesses as the need for innovation and advances in technology amplifies competitive hiring and retention.  

The absence of culture is still culture

Culture, like oxygen, is all around us. Without a defined culture that has purpose, vocabulary and guiding principles, the behaviours and assumptions of individual team members will drive the organisation. Think about the class clown derailing an entire lesson plan; the Type A dominating the brainstorming session; the grumpy cat casting gloom over all. Personality traits like these can be managed or eliminated within the guidelines of company culture.  

A well-defined culture can inform behaviour, even in the absence of rules or employee manuals. It is easy to assume there is a great culture when things are going well, where happy employees are delivering great financial results. But when tough situations arise, such as the fallout from a failed online publication, declines in readership, or impediments to innovation, culture is what focuses everyone on what matters. It factors in recruiting, retaining and engaging employees in every part of the organisation. 

Culture and the C-level

A culture needs to be adaptable to meet current challenges. Ford achieved initial success by implementing Deming’s principles, but stagnated again until Alan Mulally’s reign as CEO. Under Mulally, Ford implemented the ‘One Ford’ plan that centres on human capital. Mulally noted ‘you can’t fool anybody. Without leadership sharing the same vision and communicating how they would execute, the “One Ford” plan would cease to exist’.   

Other examples of strong corporate cultures include Amazon, Starbucks and Google. But it isn’t enough to develop a comprehensive list of platitudes. Consider the anecdote about the new CEO having all assigned parking places painted over, except for his. His message was intended to be ‘if you want a close parking space, arrive early’. But as he continued to exert privilege in retaining his space, the actual message was ‘we’re not on the same team and different rules apply to me’.

Why your team needs it

Culture warriors are the individuals who instinctively know how to keep a customer happy and how to prioritise daily tasks. Not all employees have these instincts, but with a prescribed set of principles, you minimise the risk of poor decisions or, perhaps worse, no decisions at all. 

Southwest Airlines Careers ()

Culture ties directly in to brand, unifying the internal and external environments. Before a candidate applies for a job at Costco, Whole Foods, or Southwest Airlines, they already understand the customer service, public mission or sense of humour of these brands. This understanding supports and guides employees to make the best decisions on customers’ behalf. For organisations that want to be more agile and responsive, a culture with core values and clear vision can help hire the right people, and help employees reach their goals and support customers when problems arise.  

Wells Fargo’s definition of company culture is ‘knowing what you need to do when you come to work in the morning, without having to read a manual or being told what to do’. Instead of rules, policies and regulations, culture can provide operational structure. Instead of telling employees what to do, culture tells them ‘who we are’ and gives them ownership for making decisions and taking initiative.

Motley ()

‘Great work environment. Lots of support for different work-life arrangements. Interesting work; you 

get out of it what you put in for the most part. Fairly flat hierarchy means everyone is accessible and there’s very little feeling of “management” per se–just people you go to for specific things’. This is how a current employee at The Motley Fool (TMF) describes the culture of that organisation on www.glassdoor.com, which also named TMF the number one company in America to work for based on their size (around 300+ people). Clearly, endorsements like this, along with the fact that 90 per cent of Glassdoor reviewers who worked at TMF would recommend the company to a friend, can provide other publishers with a distinct competitive advantage when trying to hire the best talent.

Corporate wellness and the bottom line

A shared culture is also necessary at the board level. With culture now an investment and employment criterion that can be researched via sites like Glassdoor.com, it is important to consider issues of risk, ethics and the long-term health of the company. And while it may seem very touchy-feely to some, it is a step-wise process.

1. Start with purpose 

2. Define common language, values, and standards

3. Lead by example

4. Seek, speak, and act with truth

5. Be greedy with your human capital – then treat them right

Developing a corporate culture is difficult, but changing one can be near impossible. Consistent behaviour, messaging and implementation will develop and nurture an environment of trust. Unhappy employees may be working in a culture that’s truly ‘bad’ but more likely it is just a bad fit for them. Telling an employee about the culture is important but leading by example is worth a thousand words. 

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