By John Coleman
In Summary
Six factors that go into creating a strong corporate culture and lasting organisation.
The benefits of a strong corporate culture are
both intuitive and supported by social science. According to James L
Heskett, culture “can account for 20-30 per cent of the differential in
corporate performance when compared with “culturally unremarkable”
competitors.
And HBR writers have offered advice on navigating
different geographic cultures, selecting jobs based on culture, changing
cultures, and offering feedback across cultures, among other topics.
But what makes a culture? Each culture is unique
and myriad factors go into creating one, but I’ve observed at least six
common components of great cultures. Isolating those elements can be the
first step to building a differentiated culture and a lasting
organisation.
Vision: A great culture starts
with a vision or mission statement. These simple turns of phrase guide a
company’s values and provide it with purpose.
That purpose, in turn, orients every decision
employees make. When they are deeply authentic and prominently
displayed, good vision statements can even help orient customers,
suppliers, and other stakeholders.
Nonprofits often excel at having compelling,
simple vision statements. The Alzheimer’s Association, for example, is
dedicated to “a world without Alzheimer’s.” And Oxfam envisions “a just
world without poverty.” A vision statement is a simple but foundational
element of culture.
Values: A company’s values are
the core of its culture. While a vision articulates a company’s purpose,
values offer a set of guidelines on the behaviours and mind-sets needed
to achieve that vision.
McKinsey & Company, for example, has a clearly
articulated set of values that are prominently communicated to all
employees and involve the way that firm vows to serve clients, treat
colleagues, and uphold professional standards.
Google’s values might be best articulated by their
famous phrase, “Don’t be evil.” But they are also enshrined in their
“ten things we know to be true.”
While many companies find their values revolve around a few simple topics (employees, clients, professionalism), the originality of those values is less important than their authenticity.
While many companies find their values revolve around a few simple topics (employees, clients, professionalism), the originality of those values is less important than their authenticity.
Practices: Of course, values are
of little importance unless they are enshrined in a company’s practices.
If an organisation professes, “people are our greatest asset,” it
should also be ready to invest in people in visible ways.
Wegman’s, for example, heralds values like
“caring” and “respect,” promising prospects “a job (they’ll) love.” And
it follows through in its company practices, ranked by Fortune as the
fifth best company to work for.
Similarly, if an organisation values “flat”
hierarchy, it must encourage more junior team members to dissent in
discussions without fear or negative repercussions.
People: No company can build a
coherent culture without people who either share its core values or
possess the willingness and ability to embrace those values.
That’s why the greatest firms in the world also
have some of the most stringent recruiting policies. According to
Charles Ellis, as noted in a recent review of his book What it Takes: Seven Secrets of Success from the World’s Greatest Professional Firms,
the best firms are “fanatical about recruiting new employees who are
not just the most talented but also the best suited to a particular
corporate culture.” Ellis highlights that those firms often have
eight-20 people interview each candidate.
And as an added benefit, Steven Hunt notes at
Monster.com that one study found applicants who were a cultural fit
would accept a seven per cent lower salary, and departments with
cultural alignment had 30 per cent less turnover.
People stick with cultures they like, and bringing on the right
“culture carriers” reinforces the culture an organisation already has.
Narrative: Marshall Ganz was once
a key part of Caesar Chavez’s United Farm Workers movement and helped
structure the organising platform for Barack Obama’s 2008 presidential
campaign.
Now a professor at Harvard, one of Ganz’s core
areas of research and teaching is the power of narrative. Any
organisation has a unique history — a unique story. And the ability to
unearth that history and craft it into a narrative is a core element of
culture creation.
The elements of that narrative can be formal —
like Coca-Cola, which dedicated an enormous resource to celebrating its
heritage and even has a World of Coke museum in Atlanta.
Place: Why does Pixar have a huge
open atrium engineering an environment where firm members run into each
other throughout the day and interact in informal, unplanned ways? Why
does Mayor Michael Bloomberg prefer his staff sit in a “bullpen”
environment, rather than one of separate offices with soundproof doors?
And why do tech firms cluster in Silicon Valley
and financial firms cluster in London and New York? There are obviously
numerous answers to each of these questions, but one clear answer is
that place shapes culture.
Open architecture is more conducive to certain
office behaviours, like collaboration. Certain cities and countries have
local cultures that may reinforce or contradict the culture a firm is
trying to create. Place — whether geography, architecture, or aesthetic
design — impacts the values and behaviours of people in a workplace.
Mr Coleman is a co-author of the book, Passion & Purpose: Stories from the Best and Brightest Young Business Leaders.
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