DEVELOPING A VALUE BASED CORPORATE CULTURE

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Corporate culture plays a very important role in molding the mindsets and the habits of the employees in a company.

Corporate culture represents the unspoken code of communication among members of an organization. The perception is that culture is a norm that helps cooperation and helps decide on rules and regulations such as which side of the road to drive on. The literature on managerial practices focuses on the notion of culture as “a set of norms and values that are widely shared and strongly held throughout the organization” (O’Reilly and Chatman, 1996). Most individuals care about the people who surround them. So, if the people we work with have certain expectations from us, chances are we are under their influence whenever we are in their presence.

Corporate culture is considered important because employees will often face choices that cannot be properly regulated or even anticipated. How they react and respond to these situations will always be dictated by their corporate values and mindset.

Imagine a company with a reputation for flawless customer care. Everyone in the company is always expected to go above and beyond to ensure a satisfactory service to its customers. Offering the best services are however often very costly and measuring the happiness of a satisfied customer is always very difficult. Furthermore, the adversarial impact of a ‘bad service’ may not be felt right away. One bad episode can hardly destroy a long-standing reputation of excellence. Hence, without the proper motivation, employees are likely to compromise the quality of their services every now and then.

Even if the senior management anticipates this problem, it is hard to design the proper incentive mechanism for this. So, how can a company create a sustainable reputation for impeccable service?

The solution is to promote impeccable service as a ‘Value’ that needs to be practiced and respected at all times.

By promoting top customer service as a value the company makes it clear to the employees that the company accepts no compromises on this front. This compels the employees to not trade off service for any reason.

But how can a set of values that create a corporate culture effects and attract the workers in a company?

1.Productivity
If the employees feel represented by your company values, in other words; the company culture, they will be able to establish a positive relationship with the workplace. If people identify with the company values and are empowered to do their best work, then they will be able to establish trust in the organization.

This trust and alignment are paramount to have an engaged and happy workforce. Research from the University of Warwick shows that a happy employee is 12% more productive compared to unhappy employees, who are 10% less productive.

In short: a good culture is imperative for high levels of productivity. However, do not expect to see the results immediately. After researching the company culture of 95 auto dealerships over a period of six years, researcher Dr. Gillespie emphasized that the impact of company culture on bottom-line results takes time. He says, “The culture of a sales department right now is going to influence the customer satisfaction from that department two years from now, and that customer satisfaction is going to drive vehicle sales two years from that point.”

2.Corporate Goals
Academics at Duke University and Columbia University interviewed 1,348 North American leaders for their research paper, “Corporate Culture: Evidence from the Field”. Here are some of their findings:

“Executives highlight that culture, which can circumvent mistakes in a way that other executive actions, formal institutions, or corporate assets cannot. Many executives believe culture contributes more to the firm value than strategy does. For example, a company performs better with a strong culture and weak strategy than the other way around.”

The above statements make sense given that even if the company strategy is not perfect, the strong corporate culture will help to keep everyone coordinated and aligned to reach the goals.

3.Business Performance
After years of research, John Kotter found that companies that empowered their people to live their culture uninhibitedly, significantly outperformed those employees that were not given the same opportunities. In his book Corporate Culture and Performance, co-written with James Heskett, he assessed the cultures of 200 companies and how it affected their performance.

“Strong corporate cultures that facilitate adaptation to a changing world are associated with strong financial results.”

The affordable luxury hotel chain, YOTEL, is a great example of this in practice. YOTEL has a strong corporate culture, and believe it is important to live the company values at work every day. To practice this, they have developed a service brand that was collectively created by 150 of its staff members. It includes 31 very simple practices—one for each day of the month—which employees are encouraged to put into practice. Through these 31 practices, YOTEL staff members are remaining true to the values of the brand and delivering excellent service to the hotel guests. This expanding hotel chain provides a consistent and excellent level of service to their customers internationally.

A value-based corporate culture will ensure the long-term sustainability of your company. People might come and go, but how a new employee will assess and perceive your organization immediately after joining will dictate his practice and mindset as long as he is retained with the company. So, if your organization fails to create a positive and meaningful based corporate culture, it will not only impact the development and performance of your employees but will eventually impact the customers and other external stakeholders.

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