Every organization, from a small business to a large corporation, has a culture. The culture determines the spoken – and unspoken – expectations and rules of engagement for how employees will interact, relate, lead, communicate, and solve problems together. When you visit a company, you can “feel” culture because it’s evident in people’s behavior, energy, and the physical environment itself. It guides daily decision-making about all business matters for good or bad, most especially when no one is looking.
News headlines about companies like Uber, Volkswagen, and Wells Fargo, among others, serve to underscore the importance of corporate culture and remind leaders that no level of growth and profitability can mask the damage caused by unethical behaviors that are produced by a toxic culture. When pubic companies are caught committing fraud they lose, on average, 25% to 44% of the value of their equity and have to spend years rebuilding their credibility and some, like Enron – and subsequently Arthur Andersen never recover.
Culture is slow to form, pervasive, and slow to change. When it’s consciously designed and consistently cultivated it sticks and it’s the anabolic energy that makes it possible for an organization to generate extraordinary results. Numerous studies in the Journal of Financial Economics have demonstrated that a healthy organizational culture produces higher profits and returns to shareholders. Specifically, companies that are ranked among the best places to work – which is based on employee surveys about company culture – deliver nearly 20% higher returns to stakeholders over a five-year period as compared to similar companies.
Culture-driven companies put people over profits. They hire great people (because their culture attracts great people), give them clear objectives, empower them, and give them the freedom to flourish. A healthy culture values differences in style, offers safety to innovate – and occasionally fail, encourages work-life balance, demonstrates respect and appreciation, creates forums to resolve conflict, and provides benefits and perks that are aligned with core values. Organizations that create this type of environment have higher levels of employee engagement and retention, and profits follow. As the saying goes, “Take care of your people, and they will take care of your customers.”
Taking steps to ensure that a high-performance culture is present in your organization is crucial to staying competitive in today’s business climate. Everything – and I mean everything – works better and easier with a positive culture including your ability to recruit and retain top talent, plan strategically, execute, solve problems, grow market share, and delight customers.
6 Ways to Cultivate a Positive Organizational Culture
1. Start the conversation in the board room – or the highest level of the organization – and identify habits to systematically and regularly embed the conversation at all levels of the organization. Create an ongoing dialogue. A static plaque on the wall isn’t enough.
2. Evaluate the current culture. Using an assessment tool, determine how the culture is perceived today and what behaviors and cultural attributes your team would like to see more or less of in the future.
3. Start a movement, not a mandate. In addition to making cultural values visible and part of an ongoing dialogue, demonstrate the ideas in action, and use core values to guide daily decisions, priorities, and ways of interacting.
4. Develop an improvement plan and use multiple approaches like training and coaching, as well as formal performance evaluations and informal recognitions to consistently execute and reinforce the plan.
5. As cultural changes start to happen, leverage momentum by recognizing and celebrating small wins. Spotlight examples of behaviors that demonstrate the desired culture.
6. Be courageous and boldly live out the values you want your company to represent by “walking the talk.” If leaders continue to tolerate behaviors that are not in alignment with the culture your organization is aspiring to, you will impede progress and worse yet be perceived as a leader with low integrity.
The most successful and impactful leaders cultivate and reinforce a conscious culture daily, not just when there’s an issue. An intentionally designed culture yields better bottom-line results while improving employee satisfaction and customer loyalty. It is the culture of the organization that creates the legacy of its leadership.
Grow with purpose.