What Is Corporate Culture and Why It Really Matters
No doubt you’ve heard this Peter Drucker quote, but have you asked yourself, what does it mean for you and your organization? How do you define corporate culture and align it to your organization? What is the difference between core values and corporate culture?
Much of my work is spent helping clients with both strategy and corporate culture. While they are both critical, I love seeing more and more leadership teams beginning to recognize the importance of culture. Having a great strategy is very important–so long as it’s relatable and understandable at all levels in the organization. And in this Age of Disruption we are experiencing, it is sorely needed to create that North Star towards which we can align. But culture also must evolve in its tactics to ensure we will remain on the most effective path.
Culture is the glue that holds strategy together. When conflict occurs, culture holds your organization together and dampens the negative effects conflict can have. It increases your resiliency. It enables innovation. It builds a foundation upon trust.
Some thought leaders disagree on the importance of culture, but in my work with clients, I see that importance every day. I have worked with teams who may start off in one direction or scope of work, but quickly realize that it will not achieve the desired outcomes for success. How they work through that in a constructive way that ensures everyone remains rowing in the same direction, directly relates to the quality of their culture.
All teams, regardless of size, have a culture. The question is, “Is it the culture you want as a leader?” What do people say about your team and how it works when you’re not in the room? If you have a set of core values or principles, does your team truly feel the organization and its leaders follow them?
For years, “Core Values” was the general approach to defining culture: Determine four to six key words that characterize your organization, frame and hang them all over your building, and promote them on your website.
Unfortunately, I find these rarely work. First, core values are often misinterpreted. Think of the word “integrity,” which is on nearly every organization’s core value list. How would you define it? Typically, I hear at least three to four different definitions of what integrity means to the individual. And given the increasing diversity in our workforce, there is an opportunity for differing interpretations of the key words.
There is a better approach.
To help you define the culture you want and align your organization to it, there are two techniques I recommend. The first is Guiding Principles, which focuses on culture at the organizational or company-wide level. The second is Leaders’ Guidance, in which a leader shares the key factors for decision making and judgment within their specific team. The first is strategic and ensures your employees are aligned around core fundamentals in how they work internally as well as externally. The second is tactical and enables greater delegation by the leader through increased confidence and trust in how their team will address a situation.
Depending on where you are in the organizational hierarchy, you may start with either approach. Typically, executive leadership will focus on culture through guiding principles, while managers and directors within the organization may start with leaders’ guidance. Both will increase the alignment of the team members in how they work together, while the strategy and its objectives focus on what and why we work.
For more on Leaders’ Guidance, check out this PowerPlay™ I created.