Why Is Company Culture So Important & How To Build One?
"Culture eats strategy for breakfast."
These are the famous words of Peter Drucker, legendary management consultant, educator and author.
Mr Drucker is not implying that strategy is unimportant. He is trying to say that a strong and inspiring culture is a guaranteed route to organizational success. Strategy and culture need to work in tandem and mutually support each other. If they are disjointed, organizational success will suffer.
When we’re mapping out company culture, some typical challenges include:
How Do We Define Company Culture?
Company culture refers to the shared values, beliefs, attitudes, behaviors, and practices that characterize an organization. It is the personality of the company that shapes the way people work, interact, and achieve goals. The importance of company culture cannot be overstated, as it can significantly impact the organization's success.
When we talk of culture, there are several aspects to it. There are spoken and unspoken behaviors and mindsets of team members, the overarching business mission and objectives, leadership and employee expectations, structured performance management and overall engagement levels.
Studies have shown that people perform better when there is strong cultural alignment within teams which eventually leads to heightened customer satisfaction. Nevertheless, most organizations spend little time thinking, let alone doing something tangible about this, even when they are spending several hours planning their business strategy.
No matter what strategy the company plans to implement, its efficacy relies on the people executing it. Any strategy needs culture to support it.
Ultimately, people are the final frontier. Plans are just plans written by leaders, but implementing them requires strategic management. This involves leadership and motivating people. People must be empowered to feel engaged before they are ready to implement. A strong culture is supported by strategy engages and empowers people to work towards established and collectively agreed-upon goals.
Organizational culture is an integral part of a business, and it blends into the daily routine, making it second nature. When we talk of healthy workplace culture, it is not just about a cool fancy workplace; it is about how we do things.
Embracing a strong culture at the workplace is an essential step to being competitive on an international scale. By building a strong culture, we provide consistency and direction, guide decisions and actions, fuel the workforce and help people reach their full potential.
Change, uncertainty and ambiguity are inevitable and often challenging to navigate, but they are much more negotiable when team members feel that their work supports a well-thought-out and well-articulated corporate vision.
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A healthy workplace fosters engagement and retention among team members. It advances team members' engagement, leading to innovation. A robust, clear-cut and well-defined good workplace culture attracts great talent because candidates assess and evaluate an organization's environment to understand what fits the bill.
Job-seekers are searching for workplaces where they can intertwine their beliefs with those of the company, and work together on a common vision of purpose and success. Leaders must rethink how they shape and build a culture that unites people around a common cause. Great culture should provide continuous alignment to the organization's vision, purpose and goals.
A LinkedIn survey found that people would instead put up with lower pay and forego a fancy title than deal with a bad workplace environment. It also showed that employees care about whether companies foster environments where employees can be themselves and positively impact society.
Today's workforces want to know they're making a difference within their companies. While work cultures are unique to every organization, the foundation of what enables a culture to thrive is the extent to which employees are empowered to be engaged, feel valued and be heard. This is where strong leadership comes in.
A firm is a vehicle for the growth of every single team member. The genesis of this philosophy comes from a concept created by psychologist Carl Rogers. In 1959, he came up with a personality development theory based on humanistic psychology that humans have one primary motive, the tendency to self-actualize - i.e., to fulfil one's potential and achieve the highest level of 'human-beingness' we can.
He further divided his theory into two categories: the ideal self and the real self. The ideal self is the person you would like to be; the real self is the person you are. Rogers focused on the idea that we must achieve consistency between these two selves.
Carl Rogers' theory supported the views of Maslow and added that a person reaches self-actualization when surrounded by an environment with genuineness, acceptance and empathy.
I understand that the key to a positive and effective organization is to have a culture based on a strongly held and extensively shared set of principles that is eventually supported by strategy and structure. When we have a strong culture, three things happen like clockwork:
A business's culture can catalyze or undermine success. Research from Harvard Business School has shown that the equity market performance of companies with strong commitment to ESG culture which is environmental, social, governance beat the index by 6.01% annualized.
Concluding Thoughts…
Company culture is that intangible ecosystem that can make or break a business. The ideology of any company is what constitutes its good corporate culture.
Over the decades, while companies have witnessed exponential growth, this growth would not have been sustainable without the culture they’ve built. Creating a solid organizational culture starts with the people at the very top who communicate strategic priorities effectively.
The most effective organizations understand that merely writing a strategic plan does not guarantee success – it is just a vision. Meaningful progress occurs only through creating and reinforcing a culture of change, ownership, implementation and accountability.