Corporate culture is hard to define, yet culture is often cited by employers and employees as an important factor in talent placement. Further, Harvard researchers found that,“when aligned with strategy and leadership, a strong culture drives positive organizational outcomes.” But what is a strong culture? How can culture be evaluated and/or improved?
HBR identifies eight cultural styles that companies have, in varying degrees and combinations:
- Caring: warm and collaborative
- Purpose: altruistic
- Learning: interactive and exploratory
- Enjoyment: spontaneity and fun
- Results: achievement
- Safety: risk-conscious
- Authority: strength and decisiveness
- Order: respect and structure
Context is essential in using culture to drive outcomes. Leaders must consider an organization’s unique mix of external and internal factors that underly corporate culture.
Region and industry are powerful external factors that affect culture and are outside the company’s control. Regional cultural differences may present further unique challenges for multinational corporations. Keeping up with industry standards and/or customer needs may require different cultural attributes, such as results or authority.
Leaders can have the most influence over three internal factors affecting culture:
- Strategy: cultures that support the strategic initiatives of a company have the most chance of driving success
- Leadership: Long a recognized aspect of culture, leaders can reinforce culture or they can be victims of it. 68% of new hire failures are due to poor cultural fit.
- Organizational design: a two-way relationship exists between culture and its structure. Each can drive the other, but better outcomes exist where structure and systems follow culture.
It follows that some of the same factors that help companies identify their particular culture can be the drivers to change that culture:
- Analyze the current culture and determine what changes should be made
- Develop and hire leaders who align with the desired culture
- Design the organization to reflect the cultural goals, including systems, processes, and hierarchy
- Communicate cultural shifts through group discussions and road shows
Corporate culture is a grey area in both its identification and creation. However, its importance from human resources and strategic perspectives cannot be underestimated.