Love That Culture

Wednesday, April 1, 2009 - 09:39

When the going gets tough, the tough get cultured; corporate cultured, that is. Sue Bushell reports.

"Corporate culture drives everything," says Phillip Ralph, Managing Director of leadership and cultural change consultancy, The Leadership Sphere.

"It drives where money is spent, where decisions are made, how people treat each other, how people treat customers, and whether people are successful in implementing the business strategy."

Importantly, Ralph says that culture – the shared values, beliefs and assumptions that underpin how things are done – matters more, not less, in tough times. When the economy turns sour, a great corporate culture can make the difference between success and failure.

A 1992 landmark study by John Kotter and James Heskett, described in their book, Corporate culture and performance, featured solid evidence that culture matters, a lot. Their study revealed that companies with excellent cultures outperform those that don't on all areas of growth measurement: revenue, stock price, net income, and employment.

According to Distil International CEO, Roger Cowan, who spent 40 years as CEO of Sydney rugby league club Penrith Panthers, in reality, every business has a prevailing culture and faces just two choices: harness the power of all employees to develop a culture based on their agreement, or allow the culture to be buffeted by forces largely unknown to management.

"A great culture starts with the development of trust between the highest and lowest levels of the structure and allows people to express themselves honestly, without fear or favour," says Cowan.

Cowan believes the most important ingredient of trust is a willingness and ability to listen. A very autocratic CEO is highly unlikely to develop a positive culture, he says.

"If the answer to ‘How do we do things around here?' includes ‘We can freely express our opinions', and ‘Everybody listens and takes notice', the tortuous trip to a great culture is well on the way.

"Other major ingredients include: trust, ownership and participation, sharing and solving problems together and genuinely striving for company goals," Cowan says.

Ralph says it is also vital that the organisation is clear about its business strategy. "Be clear about what you want to achieve in one, two, and three years, and then think about which culture will most effectively serve that. For example, if you are a big organisation where costs are ballooning and getting new products to market takes forever, you need to kill bureaucracy," he says.

A clarity of purpose

Corporate psychologist and Managing Director of HCA Consulting, Helen Crossing, says a great corporate culture ensures the organisation can consistently deliver to the customer, or client, what they want, when they want it, and to the agreed specifications.

"It requires clarity of purpose and identity. Achieving the right mix of commercial focus and productivity, and having sufficient humanity to produce service excellence is a key challenge for companies in service-oriented businesses."

Crossing says creating a desired culture means defining corporate values, getting management practices right, and ensuring high-quality relationships between people.

"The organisation's executive or senior management play a key role in determining the corporate culture. Building that culture starts with defining a corporate strategy that is so simple that everyone understands the goals and how their job contributes to achieving them.

"The glue between the organisation and the individual is the role, so it's really important that everyone understands the importance of their role, their responsibilities, their authority," she says.

"Many problems between people occur because of lack of clarity around either goals, their roles, or indeed the sort of procedures that are being used to achieve the goals. Clarity of roles makes it easy for people to know where their responsibilities begin and end. Communication is the thread that connects people, roles, and the organisation's purpose," she says.

Ralph believes that: "If you haven't got the basics right, you can't get culture right.

"The goal is a humanistic culture where the basics include all employees being valued and respected; where trust drives business and where people can achieve to the very best of their ability.

"You should start with a pretty fierce assessment of how serious you are about all those things. You can do that through a whole range of measurement tools, holding each other to account for those kinds of high standards of behaviour. If you don't manage your culture, it will manage you," he warns.

The keys to a great corporate culture

  • diagnosing and measuring your culture's strengths and weaknesses and knowing how it needs to change
  • ensuring your senior team shares a clear purpose, defined organisational values and ambitious business strategy
  • equipping leaders at all levels to communicate, model and inspire commitment to your strategic priorities and values
  • increasing the effectiveness of individual leaders as change agents through executive coaching
  • helping all employees translate the organisation's values and business drivers into tangible day-to-day actions
  • ensuring the alignment, productivity, engagement and retention of your workforce after a major change.

(Source: Blessing White)