What is company culture and why does it matter? In the simplest terms, company culture can be expressed as the way things are done around here, management experts Terrence Deal and Allan Kennedy wrote in 1982. Broadly speaking it consists of the group norms and behaviors, and the underlying shared values that keep these norms in place.
Numerous studies have found that companies with positive cultures deliver better financial results, and I have personally seen the benefits in terms of employee morale and productivity when people believe the company is committed to their success and well-being. (Conversely, I also have seen projects and initiatives fail due to certain negative aspects of company culture that existed at the time.) It is critical to business success that your company culture is congruent with your Mission, Vision and Strategy.
At this point you might be pondering the nature of your own companys culture. How can you describe it? In his 2010 book Organizational Culture and Leadership, Prof. Edgar Schein of MITs Sloan School of Management tells us that culture is manifested by artifacts, values and tacit assumptions. Lets briefly examine these.
Artifacts are the physical things that are all around you at work: the facilities, the way people dress, the technology that is used, the reports that are prepared. I would add to this category the rituals – the way meetings are conducted, how people greet each other and interact, the type and forms of communication. What do these artifacts and rituals say about your company? Are they rather formal or informal? Do they build or break down hierarchy?
Values are somewhat harder to see. Perhaps your company has written down its values and communicates them on a regular basis to employees. This is worthwhile, however it is critical that the values are practiced and role-modelled on a regular and visible basis.
Hardest of all to decipher are the tacit assumptions. Often you dont know what these are until you or someone else inadvertently violates them. Examples of tacit assumptions might be, One never disagrees with the boss in public, If you turn down a promotion opportunity, your career is over, or Best to under-promise and over-deliver.
In my experience there are some aspects of culture which are exceedingly positive and apply to most businesses. Since I find mnemonics helpful I will call this the COAST model of culture:
Commitment to people. This is about really recognizing that people are critical to sustainable success, and understanding that when you treat people with respect and fairness they will return it tenfold.
Openness. A culture of open communications is incredibly important in my experience. Of course this doesnt mean saying everything that is on your mind to everyone! However you really want people to be honest about what is not working and how to improve. If people believe they will be ignored, they stop communicating. Even worse, if your company has a shoot the messenger approach you will learn way too late of underlying issues that could have been fixed.
Accountability. To me, this simply means Do what you say you are going to do. It also means that people are held accountable for their performance and that of their group or division. In such a culture, high performance is rewarded with promotional opportunities and bonuses, for example.
Safety. Yes, this needs to be a cultural aspect, not a goal. In my experience, safety has to be felt at a personal and emotional level by each and every employee. In the lubricants and chemicals business it is worth incorporating this into your company culture.
Trust. Building strong and trusting relationships at work will lead to a number of positive outcomes, including more work getting done, less stress in the workplace due to politics, improved teamwork, and less time and energy wasted.
Other aspects of your company culture could be important to your success or form a distinctive part of your organization. For these, you may find it helpful to position your company along a spectrum. In the lubricants and additives industry specifically, some of these cultural touchstones include:
Process orientation. Do you believe in having well-defined and written processes and procedures? In the lubes and chemicals arena I would argue that these are pretty important due to the legal and quality requirements that surround us. However the processes and procedures need to be simple and clear enough that employees can understand them and follow them.
Innovation. If you are differentiating your company based on product and technology, youll want to pay a lot of attention to company culture and how it supports (or discourages) innovation. On the other hand, if you are positioning your company based on customer intimacy or operational excellence, then perhaps innovation is not that critical – although of course one can innovate in these areas too. (See my article on Brand in the July 2014 LubesnGreases.)
Risk. How do colleagues in your company perceive risk? This is an important area to think about. If people feel that it is never worth taking risk then you might find that your company is very slow to move. Perhaps risk is one of those areas of tacit assumptions that at a minimum deserves a conversation and some clarity.
Teamwork. In our industries most efforts require that colleagues and groups work together toward common goals. However it is to some extent a choice as to how you recognize and reward team success versus individual success.
As you consider these various aspects of company culture, you might find that more than one could benefit from a change. I suggest tackling only one, as any cultural change, while crucially important, is difficult and will take time.
Start by picking the one that is most important and aligned with your company Mission, Vision and Strategy over the next five years. Be sure to also recognize and reinforce those aspects of your company culture which already are strengths. And watch for some techniques for moving company culture, in my next article.
Sara Lefcourt of Lefcourt Consulting LLC specializes in helping companies to improve profits, reduce risk and step up their operations. Her experience includes many years in marketing, sales and procurement, first for Exxon and then at Infineum, where she was vice president, supply. E-mail her at email@example.com or phone (908) 400-5210.