Assessing Corporate Culture

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I have two, thirty-something daughters and both have chosen to be independent consultants rather than full-time employees. I asked them why (they have both been offered full-time jobs with major companies but preferred to stay independent) and this is what they both told me:

“We don’t want to become absorbed by the corporate culture.”

As an ex CEO and management consultant, I always thought it was a given that being part of a company was an important attraction for aspiring employees. But for many younger skilled professionals who don’t want the commitment of being either a fulltime employee or entrepreneur, becoming a consultant is growing rapidly as a way to approach the modern work-lifestyle conundrum.

So, why does corporate culture matter?

Corporate culture is a pretty nebulous thing. Is it the company mission, values and policies and procedures? Is it the leadership styles of top or middle management? Is it the values of the predominant age group that sets the tone? No matter how it is defined, most studies imply that corporate culture has a powerful effect on a company’s success.

The 2013 Culture and Change Management Survey (Price Waterhouse Coopers) of over 2,200 global business leaders found that:

  • 84% believe culture is critical to business success;
  • 60% believe culture is more important than business strategy or operating model; and yet
  • 51% think a major overhaul is currently needed in their culture.

So, it begs the question: if leadership believes corporate culture is so important, why do over half respondents feel their corporate cultures need a major overhaul?

Often, academic and real world perspectives clash….particularly when it comes to organizational behavior. Indeed, corporate culture can depend largely on the type of industry or service. It’s hard to imagine a touchy-feely culture in construction or manufacturing as it is hard to imagine the traditional tight and well defined production culture in a graphics design studio. But there is one thing in common to all enterprises; they are made up of people working together.

For reasons we all know, different personalities come in so many different sizes, shapes and colors. But during the recruiting and hiring process, subtle personality traits are often missed. Indeed, most applicants play to the expectation of what it takes to get hired for the position. So, while a resume, job experience, education and credit history may provide a general view of the person, it is far from complete. And that is what makes us Homo sapiens so interesting….and sometimes problematic. Recognizing this fact, organizational management tries to mitigate the forces of personality and eccentricities by setting up clearly defined ways to work, act and yes….think… while in the role of employee. It comes with the territory.  Most people understand this arrangement and adapt. However, others may have varying degrees of acceptance and adherence to the company “cultural contract.” In any case, studies do indicate that corporate culture is an important factor for success and tending to it is one of those never ending management tasks. So, it makes sense to be able to somehow define and measure it.

One way to assess organizational culture is by asking questions that probe into the underlying beliefs, perceptions and behaviors that drives an organization. This entails an employee survey.

Calibra Leadership (formerly the Center for Organizational Effectiveness) offers the following chart to help differentiate between a culture study and an employee opinion survey.

Assessing Corporate Culture

In addition to asking questions such as:

-What does it take to be successful in this organization?

  • -What does the workplace “feel” like?
  • -Who is talking to whom (and who isn’t?)
  • -How do people interact?
  • -What stories do people tell about the organization or its “heroes?”
  • -How are customers, suppliers and other external stakeholders treated?
  • -What ceremonies are celebrated?
  • -Are there “rites of passage”? If so, what do they celebrate?
  • -What social activities exist? Are they well attended?

A complete culture study would also review physical space, internal and external documents, company events, company policies, etc. to determine:

  • What values are communicated internally and externally?
  • Which behaviors are reinforced and rewarded?
  • Which behaviors face negative consequences?
  • The presence of gaps and/or contradictions demonstrated by the above.

One of the most important leadership qualities is the ability to communicate with all levels and ranges of personalities. Of course, it is impossible to please everyone but a culture is made up of a consensus of accepted values, structures, expectations and behaviors. Being able to have a good grasp of what your corporate culture is or is becoming is an important task at the highest levels, which by organizational design are somewhat removed from the impact and nature of the corporate culture on the total organization.

Getting back to my thirty-something consultant daughters and their need for independence from corporate culture, I decided to challenge them on their aversion. I pointed out that a major talent needed by consultants is the ability to fit into a corporate culture quickly and effectively. There was a moment of silence to ponder my challenge.

“We don’t want our personal lifestyles to become contaminated by the subtle pressures of peer groups,” they replied. Call it arrogance, naiveté or a product of the me generation, conformity has its place yet, the digital age is providing new opportunities, skills and ways to approach work life. It makes me hark back to those employees I would rather not had to work with and wonder if perhaps I should have hired a consultant?

 

Additional Reading

Corporate Core Values-A Discussion with Govidha Jayaraman

The Future of Corporate Education

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