By Cindy Gordon
Illustration: Ryan Snook
An organization that has a well-defined culture can achieve higher profitability than one that doesn’t
Culture impacts a person’s actions, thoughts, successes and failures. It represents beliefs, behaviours and attitudes that one consciously lives by. Parents work to instill certain values and beliefs in children. As one matures, he or she learns more and more about oneself. Life experiences and the norms and standards of society alter and refine one’s personal culture. Sometimes societal norms and standards play a larger role in the development of culture than people realize.
Corporations, like people, have their own unique culture. Commonly, the culture of an owner-managed company would significantly resemble the culture of the owner — whether good or bad. In larger organizations, there is a diverse and sometimes conflicting culture that runs through it due to the different characters making up the management team. As well, the corporate culture can be influenced by experiences and society — both positively and negatively, and sometimes unbeknownst to the management team. In any type of organization, a poor culture can lead to staff disengagement and customer dissatisfaction — two criteria that significantly impact the profitability of an organization.
By defining the corporate culture, management becomes accountable to the members of the corporation and the public to ensure their actions, strategies and business decisions support their intention. Corporate culture points directly to the strength of the organization’s leadership.
Both personal and corporate culture are comprised of three main components: vision, values and leadership branding.
A vision is commonly presented in a corporate mission or vision statement. The corporate vision represents the foundation and focus of a business. It is an articulation of what the company’s purpose is beyond making money. It embodies the essence of what compels it to thrive.
The development of a corporate mission or vision has become mainstream in the business world. It is commonly used as a marketing tool to inform the public about the company. However, management commonly fails to get the real benefit from this powerful form of communication in a number of ways, including:
Through its established culture, Southwest Airlines has experienced soaring profitability and high levels of staff and customer engagement. After 9/11, many travellers wanted to cancel or change travel arrangements on purchased tickets. While many airlines were charging fees to make these changes, management of Southwest looked to its mission statement for direction. The mission of Southwest calls for dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride and company spirit. The decision not to charge for changes or cancellation and offer full refunds if requested fully supported its culture of providing the highest quality of customer service. While some passengers did request refunds, most did not. As a result of its actions, Southwest did more than survive a most challenging time for the travel industry. To this day, the airline is known for its strong sense of customer service.
Powerful leaders throughout time have developed a vision that benefits not only themselves, but others as well. It is this type of vision that attracts others and makes them willing to work beyond the call of duty for that leader.
Your values reflect the essence of who you are and what strongly enriches your life. Values come from the core of a person. When you live your life in honour of your values, your life is meaningful and rich. If you were to think of a memorable time in your life — an experience that brought out your extreme feelings, for example, the birth of a child, an exciting holiday — what makes the event memorable is that somehow it activated an important value within you. Living life honouring your values is what makes you jump out of bed every day excited to start your day.
Values play a large role in the development of a strong business culture. Corporate values provide the essence of how each employee is called upon to represent the organization. When management spends time defining, discussing and acknowledging the corporate values, the behaviours and expectations of staff become clear and consistent. This leads to improved staff engagement and better-serviced clients. These factors have a significant impact on the corporation’s profitability.
Once leaders have identified and defined their corporate values, it is vital to help the staff discover how their personal values are validated when they perform their jobs in accordance with the corporate values. This alignment will make personal and corporate values increase staff engagement. Therefore, employees gain more fulfilment from their job and are motivated to work harder, bringing their best to their work.
Corporate values greatly facilitate the recruiting process. Recruiters commonly look for a person who has the skills to perform a specific task. The human resource team uses various skills to get a sense of how well the candidate can handle the responsibilities of the job and how they would fit into the organization. In corporations where values are part of the corporate culture, the recruiting process takes on a new life. The process becomes one of uncovering the candidate’s values and assessing how aligned they are with those of the corporation. There is no second-guessing. Using corporate values in the recruiting process can reduce recruiting time and costs. But best of all, it can increase the likelihood the new recruit will fit well into the organization and will stay with the company for a long time.
Branding is used by companies to establish an identity for their products or services. Product branding focuses on how the product makes customers feel. A leadership brand represents the identity and reputation of leaders throughout the company. It exists when leaders at all levels of an organization demonstrate consistent reactions to issues and strategies within the company. Successful leaders tie their brand identity to the changing expectations of customers, staff and stakeholders.
Firms with branded leadership enroll their customers through consistent and appropriate methods of meeting their needs. Customers develop a knowledge of what to expect from the organization’s representatives because their actions are consistent with the corporate values and vision.
The benefit of leadership branding also extends to the employees. When a consistent and effective leadership brand exists in an organization, employees know what to expect. This greatly enhances motivation and minimizes staff turnover.
Leadership branding is a valuable tool for organizations of all sizes. Even in an owner-managed company, the development of a leadership brand can result in consistently dealing with issues in a way that alleviates their burden, allowing the owner more time to grow and develop his or her business.
Research has shown and experience has confirmed that organizations with a corporate culture comprising a compelling vision, values aligned to all employees and a strong leadership brand can achieve higher profitability than organizations without. As a leader of a business, it is important to use your leadership skills to impact people. By enrolling staff, clients and potential clients into the vision of the organization and connecting to their personal values, the company is transformed from a tool for making profit into a creative, humane experiment for improving life.
ARE YOU READY FOR THE REAL CHALLENGE?
Give your employees this quiz and see how they rank the corporate culture.
Circle the answer that best represents your organization.
a) Deduct $30,000 for being a poor leader and not getting it done.
b) Neutral – we’ll see if you walk the talk.
c) Deduct $60,000 for wasted your time and energy in developing it and not getting the full benefit from it.
d) Add $100,000 for igniting the energy in the staff
a) Same deduction as question #1
b) Neutral – you’re not getting any more out of your staff than before
c) Add $20,000 for energizing your staff
d) Neutral – you’re not getting any more out of your staff than before
a) Deduct $5,000 for each employee you have. You’re not taking advantage of their brilliance.
b) Neutral –this isn’t significant.
c) Add $1,000 for each employee that you have included in the decision making process.
d) Add $5,000 for each employee that is empowered in his job.
a) Deduct $5,000 for each employee that has left because of how you react. You’re fooling yourself if you think this didn’t contribute to their departure
b) Same as a)
c) Add $40,000 for being an effective leader
d) Same as c)
a) Deduct $100,000 and hire a CEO to take your place.
b) Add $2,000 for every person who takes advantage of this flexibility and gives back to the company. Deduct $2,000 for each employee that is unaware of this benefit.
c) Deduct $5,000 per employee. The value you are getting from those you provide privilege to is significantly offset by the cost of those now de-motivated.
d) Add $10,000 per employee.
a) Add $5,000 for each employee that has been empowered to handle the situation.
b) Neutral – as long as this is part of the employee’s training, otherwise, deduct $2,000 for each incident.
c) Deduct $5,000 for every employee you stepped over to handle the situation yourself. They are bringing less to the job each time that happens.
d) Deduct the annual revenue generated from that customer because chances are you won’t have that customer for long
a) Neutral – doesn’t seem like you are maximizing their potential.
b) Deduct $50,000 for each employee you don’t think is great because they are probably disengaged from their job and maybe even looking for a new one.
c) Deduct $50,000 for each employee you would want to replace right now. They are obviously not bringing any value to the company.
d) Add $50,000 for getting the most out of each person.
Deduct 125% x their salary for each employee that left the company during the year.
a) Add $5,000 for each employee
b) Add $5,000 for each employee
c) Deduct $2,000 per employee. The benefits of feedback on a semi-annual or annual basis are short lived.
d) Deduct $10,000 for each employee. They can’t be effective in their job if they don’t know what they are trying to achieve.
a) Deduct $10,000 per employee. Working to improve weaknesses can be frustrating and discouraging.
b) Deduct $5,000 per employee. At least strengths were discussed, but the focus is still on improving weaknesses.
c) Add $5,000 per employee for allowing your employees to focus on their strengths
d) Add $10,000 per employee for giving them a platform to critique you!
Cindy Gordon, CA, CPCC, can be reached at email@example.com or 647-221-1432
Technical editor: Carolyn Cohen, CA, MSW, Training and Human Resources Consulting