Does Culture Matter?

As part of my business consulting, I have talked to many company owners, Presidents & CEOs in the past year. One area that I am always very interested to learn about is their company’s culture.

Over the course of my career, I realized how important a well-defined culture is to the success of a company. That’s why when I meet new people, I gravitate toward understanding their company culture and how it relates to their success.

I define business culture as guiding principles, which includes the organization values, visions, goals, customs, traditions, attitudes, and beliefs that make a company unique. This creates a set of shared mental viewpoints that guide understanding and decision making in organizations. Simply said, “It’s the way things get done around here.”

Culture is consistent, observable patterns of behavior in organizations. Aristotle, the Greek philosopher said, "We are what we repeatedly do."

Organizations should strive for a “strong” culture in order to increase productivity, growth, efficiency and reduce counterproductive behavior and turnover of employees.

Strong culture exists in companies where employees respond to challenges with respect to the guiding principles and their alignment to organizational values and objectives. In such environments, strong cultures helps firms operate like well-oiled machines, engaging in outstanding execution and customer delight.

Conversely, in weak cultures there is little alignment with organizational values and objectives, and control must be exercised through extensive policies, procedures and bureaucracy.

Where culture is strong, people do things because they believe it is the right thing to do.

Research also suggests a strong organizational culture may provide various benefits, including the following:

·         Competitive edge derived from innovation and customer service

·         Consistent, efficient employee performance

·         Team cohesiveness

·         High employee morale

·         Strong company alignment towards goal achievement

A Harvard Business School study reported that culture has a significant impact on an organization’s long-term economic performance. The study examined the management practices at 160 organizations over ten years and found that culture can enhance performance or prove detrimental to performance. Organizations with strong performance-oriented cultures witnessed far better financial growth.

As I have mentioned in my past blogs, many of the corporate philosophies relate to our personal lives as well. Creating a good culture in a company starts with our families first. Teaching our kids the right values, visions, customs, traditions, and attitudes creates the future leaders that eventually will establish the strong culture in their organizations.

Finally, Management guru Peter Drucker got it right when saying “culture eats strategy for breakfast,” as he clearly understood that corporate culture is an incredibly powerful factor in a company’s long-term success.  An organization that has the best strategy in the world, but a culture that won't allow it to make that strategy happen, is doomed from the outset. No matter how good the strategy is, when it comes down to it, people who are aligned with a common culture always make the difference.