Components of a Great Corporate Culture
The concept of corporate culture emerged as a consciously cultivated reality in the 1960s along-side related developments like the social responsibility movement—itself the consequence of environmentalism, consumerism, and public hostility to multinationals. Awareness of corporate culture was undoubtedly also a consequence of growth, not least expansion overseas—where corporations found themselves competing in other national cultures.
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% of the differential in corporate performance when compared with ‘culturally unremarkable’ competitors.”
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 organization.
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.
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.
Of course, values are of little importance unless they are enshrined in a company’s practices. If an organization 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.” Similarly, whatever an organization’s values, they must be reinforced in review criteria and promotion policies, and baked into the operating principles of daily life in the firm.
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. 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 8-20 people interview each candidate. People stick with cultures they like, and bringing on the right “culture carriers” reinforces the culture an organization already has.
Any organization 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. But they are more powerful when identified, shaped, and retold as a part of a firm’s ongoing culture.
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.
There are other factors that influence culture. But these six components can provide a firm foundation for shaping a new organization’s culture. And identifying and understanding them more fully in an existing organization can be the first step to revitalizing or reshaping culture in a company looking for change.