5 Ways in which Corporate Culture Affects Performance
During a conversation with an entrepreneur with a past record of one success (a profitable exit strategy), who was in the midst of starting a new venture, he asked me if an excellent organizational culture would necessarily make his product better?
My answer was no.
Corporate culture does not directly improve the product, nor will it overpower competitors. A startup company clearly needs to have the best minds on board (employees and managers) directing their efforts to make the product (the idea) be the best that it can be in order make the breakthrough. Having said that, a solid organizational culture is the elemental framework that allows a company to grow properly and healthily, and to remain a comfortable and pleasant place to work – it retains the desired “language” and behavior in the company and serves as a good backbone for improving employee performance and mood.
So while it is not directly influential, it is still important to note that all of the above may have an indirect effect on company growth and product development, sometimes significantly so.
What are the most important effects of corporate culture?
Communication and processes of learning and improvement
A positive corporate culture provides a platform for fruitful and educational discourse, thus strengthening cooperation and collaborative thinking. Organizations whose managers emphasize a discourse of guilt and blame (as opposed to a discourse of solutions), will find it hard to develop a culture of positive, empowering communication, which is the foundation for innovation and creation. Accordingly, a negative work environment may cause the employees to develop a tendency to keep their thoughts to themselves, reduce their interactions, and hide their failures. For this reason, it’s important to create a corporate culture that will facilitate open communication, sharing of knowledge, and collaborative thinking. These will serve as a springboard for creativity, growth, and enterprise.
A sense of connection and belonging
When the codes of language and behavior are clear to all involved, the organizational workday becomes more pleasant and comfortable. It’s important to remember that, unlike past generations, economic and employment security are no longer the decisive factors of importance for employee retention. Today, amongst the most important criteria prioritized by both employers and employees are values such as fulfillment and satisfaction. Therefore, it is imperative for the organization to have a pleasant and congenial atmosphere, which creates a sense of belonging and “connectedness” at work, while also reducing burnout and inspiring the employees to come to work with a smile.
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Growth in ‘Scale’
A robust corporate culture allows for processes of growth and expansion, in a scalability that characterizes startups, to be handled in a healthier way. This is achieved by being able to follow tried and tested plans of action, based on familiar organizational models. A strong culture will help an organization to “replicate” its successes and to experience growth in the desired direction. One of the most important pillars of this foundation is the hiring of staff that match the organization’s DNA (further detail on this topic can be found in the article discussing the criteria method).
A discourse of dos and don’ts
Corporate culture defines the unwritten boundaries of accepted behavior in an organization, and is often more influential than strict supervision and policing. Drawing from the organizational vision and values, which serve as the pillars of the corporate culture, one can gain a general grasp of the characteristics of both desirable and undesirable behaviors which may be exhibited by employees within the organization. Thus, the effort invested in creating and maintaining a positive and communicative corporate culture will in itself influence the daily agenda and may help save precious time and resources from disciplinary or issues, or those of morale. A values-based management approach will also encourage employees to take the initiative and to be creative, while also accepting responsibility and showing confidence – not just following instructions (further detail can be found in the article discussing values-based management).
Clarity and certainty
Startup companies are by their very nature dynamic and elastic enterprises, which more often than not leads to significant uncertainty for all involved. A consistent and comprehensible corporate culture will invariably increase both the clarity of the shared vision and the certainty necessary for all employees. Transparent messaging from management, regular events and ceremonies, as well as routine and regular collaboration, all serve to assist in maintaining maximum certainty and security, even in times of crisis.
In conclusion, a positive corporate culture can benefit an organization in many ways, and, if established early and clearly, may lead to improved performances and accelerate processes on the way to achieving the company goals.
When is it time to start building your corporate culture?
The right time to start designing and defining your organization’s corporate culture is right away – from the moment the organization is officially “born” and ready to move from the concept stage to the implementation stage. Our products and/or ideas are now finally ready to launch, a process that still requires considerable resources and undivided attention. However, before setting off along that path, we’ll already have started a process to initiate and implement our foundational vision and values, which were defined as part of our organization’s early infrastructure. Having done that, we can know that the first cornerstone has been laid in the construction of our organization – and its corporate culture.
