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Why is Right Corporate Culture indispensable for survival?

“You can have all the right strategy in the world; if you don’t have the right culture, you’re dead.” – Patrick Whitesell This statement by Patrick Whitesell, Co-CEO at WME speaks volumes about the significance of the right culture in an organization. More than ever there has been quite a buzz around corporate culture now […]

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“You can have all the right strategy in the world; if you don’t have the right culture, you’re dead.” – Patrick Whitesell
This statement by Patrick Whitesell, Co-CEO at WME speaks volumes about the significance of the right culture in an organization. More than ever there has been quite a buzz around corporate culture now and how it’s challenging to recognize its state inside the company. Before we dive deep into its dynamics, let’s take a step back to first understand what exactly the corporate culture is.
What is Corporate Culture?
All companies aim to provide the best of products and services to their customers. While that should be the case; how would anyone achieve it if the employees working in that organization are not happy and thus not productive? If the family members in a house are fighting with each other and do not know on what principles they exist, what are their values, how are they going to welcome an outsider and treat him well? The internal dynamics of a company is reflected in the teams’ efficiency and their experience with the customers.
Corporate Culture is, therefore, sum-total of how the employees interact with each other at their workplace. It includes rules & guidelines, frameworks, policies, norms and the values on which the company works. It can be seen embedded in the day to day activities and processes of a company such as hiring, rewards systems and promotions etc.
While defining corporate culture in words might seem simple, but in reality, it’s very complicated to ascertain what kind of culture exists and what impact it holds on organization, business, employees and customers.
Holistic Impact of Culture
As per Deloitte’s report, it has been found that Exceptional Organizations think about their business as a two-sided ledger: strategy and culture. Also, the majority of executives and employees believe that workplace culture is important for business success.
While the strategy is more of a logical approach to running the business and ensuring that the organizational resources, structure and design, portfolios and management fit together in such a way to create the maximum value; Culture, on the other hand, is more of intangible aspect which focuses on people factor and ensures that employees can thrive in the workplace.
When analyzed deeply, one can realize that employees are the main asset of any organization. One person might have the best of ideas but to implement it in reality, a team is needed. If those people are not taken care of if they are not happy if they are not well – what result do you expect? CFO has co-related the fact that companies with good cultures positively impact their share prices. This should not come to anybody as a surprise since positive environment impacts the employee’s mental, physical and emotional well-being and thereby transforms the organization into an efficient team.
Indeed, culture can’t be measured in quantifiable terms but it definitely can be seen in the long term performance of the company. Though no two companies can have the same culture and values, still there are few attributes which are found common in them:
• Brand identity
• Attract talent
• Loyal and engaged workforce
• Higher retention of talent
• Delighted and loyal customers
• Innovation
As per the Harvard Business Review, firms with rich corporate culture have more chances to outperform the ‘culturally unremarkable’ competitors. Thus, the right corporate culture is good for business in the long run. Now that we have understood about what corporate culture is and how it affects the organization; the question which arises is why and how it is crucial for even survival?
Why the right culture is crucial in current times?
• Organizations which are satisfied with the status quo and not innovating will surely fall off the cliff very soon
• Those who are still working with management by fear methodology will no longer be able to retain the talent especially the millennials
• Culture of over-work will not be able to sustain the growth in the longer run
What is common in all the above scenarios? Focus on employees and work-life balance is missing. In Business Roundtable, the top CEO’s of the companies agreed and realized that in changing times the focus on employees and customers is of paramount importance and not just the shareholders. Only when the employees are happy and find meaning in their work, they can satisfy the customers.
Setting realistic goals, maintaining diversity while ensuring inclusion and employees working together towards clearly defined mission sharing same values are few factors which would help the company achieve the right culture in the organization.
All the successful leaders have put great emphasis on the relevance of culture ever-evolving market. In the book “Who Says Elephants Can’t Dance?” Lou Gerstner, former CEO and Chairman of IBM (1993-2002) wrote :
“I came to see in my time at IBM that culture isn’t just one aspect of the game – it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value.”
Again, Adam Bryant in his book “Quick and Nimble” has compared the successful culture with the greenhouse where people and ideas can flourish.
Right corporate culture can take an organization to a zenith in the long run; on the other hand toxic culture can let the company hit its bottom and succumb to death eventually. When asked upon few companies would sound unaware about their culture as if it’s not something to be focused upon; results have been found detrimental in such cases.
Tony Hsieh, CEO of Zappos.com, shared about the dangers of not giving enough weightage to the culture in his start-up LinkExchange. He mentioned that the main reason for selling the company to Microsoft was that their culture went completely downhill and the employees were not willing to come to the office even though they worked day and night to make it work.
While the above one is an example of not prioritizing the culture; there are companies which developed toxic cultures thereby leading to their downfall.
Theranos’ case is the classic example where toxic culture inside the company led to complete shutdown and massive fraud charges against them. We all know that Leaders lead by example and to a great extent affect the way people in that organization work and perceive the things. In Theranos’ case, top leaders Ms Holmes and Mr Balwani were the main reason behind the dysfunctional culture as they would object to any employee who would not agree with them and raise a concern. Management by fear, secrecy, hype and overworking was an integral part of their company.
Similar such example is of United Airlines, where the CEO Oscar Munoz tried to defend the violent deplaning of passenger and wrote to employees in an internal letter that he stands behind them and commend that they went above and beyond to ensure their functioning was smooth. While this mail might sound motivating but it implies that top management only cares about the process and not about the people. It depicts that the status of employees in that organization is at a very low level. These companies have cultural problems deep-rooted in their top management which ultimately percolates down to their employees.
Reputation or Brand Value takes a lot of toils and hard work to be built but cultural problems can lead to their failures sooner than anybody can think as seen above and can completely tarnish the image. In nutshell, we can deduce from the discussion that for any organization to succeed or even to survive, right cultural integration is indispensable.
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