How Good Is Your Corporate Culture?

I have skin in the game when it comes to strategy, and for good a reason–many companies rise and fall on the strength of their strategic choices. But here’s the thing, even more companies can attribute their success or decline to culture. Without a positive culture, strategy is just wishful thinking. In fact, the most successful cultures are synchronized with the company’s strategy and attractive to the talent needed to deliver it. 

Tolstoy wrote that all happy families are alike, but every unhappy family is unhappy in its own way. Any examination of corporate cultures follows the same principle. Some organizational cultures are flagrantly dysfunctional. People are terrified of speaking up. Leaders spend more time managing perceptions than solving problems. Rumours, corrosive behaviour, and fake friendships abound.

More commonly, organizations, like many families, look reasonably healthy from the outside but conceal a dysfunction that’s more difficult to diagnose. Even organizations where culture is famously a strength (or used to be) rarely get it all right all the time. Some of these companies have failed to adapt to changing societal norms or innovations from direct competitors. Others have a culture that fits some, but not all.

A lethargic workforce will not deliver great products or great customer service.

A better corporate culture shapes not only the company’s performance but also the level of happiness of its employees and this, in turn, can positively impact families and the wider community. Gallup’s large scale global employee polls track employee engagement. They show that only about 15% of employees are engaged at work (though it’s over 30% in the US). When they compared top-quartile with bottom-quartile engagement across business units and teams some clear differences emerge. Companies with top quartile employee engagement are 23 percent more profitable, 18 percent more productive, and employees experience a 66 percent improvement in well-being. 

Our work provides meaning and identity. It determines the quality of life we can enjoy. This is why it’s a moral responsibility for leaders to shape better cultures (while being clear-eyed about whom it fits and whom it doesn’t). 

Leaders can’t shape culture on their own, though. If you are not happy with the organizational culture around you, don’t stand still– the change can start with you. If there are not enough people that want to change things with you, or if better behaviours don’t prove infectious, maybe it’s time to think about looking for work elsewhere. Don’t languish when you can thrive somewhere else.

“Culture eats strategy for breakfast”?

This saying has been attributed to management guru Peter Drucker who often wrote about both the importance of culture alongside his advice for developing a winning strategy. In his classic book Organizational Culture and Leadership, Edgar Schein used a more restrained and perhaps more accurate phrase: “culture constrains strategy”. A strategy needs to fit the boundaries provided by its culture or the company must change its culture to redraw these boundaries. But since managers can only take on so much at any given point in time, success can depend more on the degree to which strategic and cultural initiatives are synchronised (as well as other aspects of talent development and organizational structure), than the inherent logic of each set of strategic or organizational initiatives. 

For example, the language leaders use to communicate their priorities and manage day-to-day activities sends strong signals about the cultural expectations of the organisations they lead. The best leaders pay close attention to how language shapes their organisation’s culture, they use clear, concise language to set meaningful priorities, and then they embed those priorities through repetition. These leaders communicate in a truthful, authentic, and culturally appropriate manner. When Satya Nadella wanted to revitalize Microsoft’s culture, as he describes in his book Hit Refresh, he focused on a big and catchy message: From Know-It-Alls To Learn-It-Alls and on 3 new leadership principles: Bringing clarity to those you work with; generating energy on your teams and across the company; and finding a way to deliver success, to make things happen. It was simple and it was obsessively communicated. 

Good Working Culture / Bad Working Culture

Ben Horowitz’s 1997 memo, where he compared the Good Product Manager and the Bad Product Manager has inspired me to create my own good/bad list about corporate culture, which I have been working on for the last few years.

I think it’s now ready to be shared with you–be it for assessment or improvement. As you can see, I have focused on describing more universal sentiments, norms, and behaviours. I think some elements on the list are absolute. For example, good culture clearly comes from feeling more motivated or being more honest. Yet other elements may be more relative and depend on the cultural context. For example, expressing strong emotions at work may be appropriately encouraged in some companies, while rightly discouraged in others. This is even further complicated by varying national cultures that seep into corporate culture and make it hard for multinational companies to enact a consistent culture everywhere. As such, while I am a huge fan of Ariana Huffington’s concept of ‘compassionate directness’, having worked and lived in East Asia, I am also aware of the need to work around the competing cultural values of respect and harmony.

My hope is that after you delete and edit as you see fit, you too can have a list that makes life and work happier for you and those around you. I reflect on it often and feel fortunate to be part of a mostly great culture (I have shared more here about what it taught me). I say "mostly" because we still need to work hard to re-establish some elements or ensure the best parts of our culture don’t decline. Execpt perhaps for areas of intgerity, "mostly" is also a reason ot be proud. Meeting most positive norms most of the time is quite a remarkable feat, and because the internal assessment and external reputation of any corporate culture are judged relative to the expectations of its employees, it’s sometimes worth re-calibrating our expectations. This has helped me to be more grateful without losing the passion to replenish and advance a wonderful working culture..

I have split my good/bad culture list into six dimensions:

1. Motivation (this comes first because the first test for any corporate culture is whether it enables happy employees)
2. Engagement
3. Empowerment
4. Working Environment
5. Integrity and Caring
6. Leadership (last but not least) 

Please let me know what you think of this list. I welcome suggestions, amendments, subtractions, and additions. I’d love to hear about your experiences working in a good or bad culture. I plan a follow-up article to go deeper into each of the six dimensions also after reflecting on your feedback.