Several studies confirm the correlation between corporate culture and financial performance, employee engagement, levels of innovation and customer satisfaction. Companies such as P&G, Southwest Airlines, FedEx and Starbucks have been able to differentiate and excel in highly competitive markets in part by developing and sustaining healthy cultures. By the same token, the toxic cultures of firms such as GM, Blackberry and Air Canada have contributed to declining market performance.
In short: culture matters. But what exactly is culture?
A culture can be defined as the norms, practices, history and values of an organization — in other words: "how things are done around here." The health of a culture is generally quantified through employee engagement scores, with Canadian companies averaging 40-50% engagement.
These days, companies are looking to enhance their organizational life without turning their company inside out. While the differences facing each firm often call for unique approaches to cultural renewal, best practices cut across different sectors and organizational structures and are always based on inspiring leadership and skilled management. Below, I’ve identified six tips for developing a highly successful corporate culture.
Lead by example
Leaders don’t work on culture, they work in it, tracking it, modelling the right behaviours and communicating core messages. Savvy leaders look beyond yearly employee surveys to regularly gauge sentiments and enlist feedback during weekly chats or informal events. David Agnew, CEO of RBC Wealth Management Canada, undertakes frequent branch visits, meets directly with clients and regularly and directly communicates with all of his team, as well as rank-and-file employees.
Tell your story
Every company has a story. Great leaders capture and articulate this story in an inspiring way in order to develop a powerful mission or ethos that serves as an organizational "North Star" (or guiding principle). A good example of a North Star is Google’s inspiring mission to organize the world’s information and make it universally accessible and useful.
Provide purpose
In a healthy culture there is an implicit — if not explicit — awareness of the connection between mission (what value you deliver), values (what inspires your activities), actions (what needs to be done day-to-day) and behaviours (what becomes second nature). Employees within these cultures tend to strongly identify with their company’s purpose, values and goals, improving both engagement and satisfaction.
Solicit feedback
Internal practices, tools and policies play a vital role in promoting or hindering desired behaviours. These practices need to be regularly reinforced and tweaked as necessary to ensure high performance and adaptability to new conditions. Some proven steps include having monthly town hall meetings, encouraging interactions outside of work and utilizing knowledge management systems.
Inculcate and reinforce
It is easier to attract and build an esprit de corps and promote the right behaviours when the firm has effective mechanisms to manage human capital. RBC Wealth Management Canada has extensive on-boarding and training programs for new hires, culture-reinforcing performance management systems and ongoing practice management for seasoned professionals. "It really helps us to attract and retain the industry’s best people," says Mr. Agnew.
Embrace differences
Healthy cultures are not homogenous. Numerous studies have demonstrated that higher organizational performance and innovation come from diversity, not uniform workforces. Though RBC has a dominant ethos, it does not seek out one specific kind of employee, believing diversity of talent and style can help contribute to continued growth. "There are no shortcuts to establishing and maintaining a positive culture," says Mr. Agnew. "It requires an investment of time, effort and resources at all levels of the organization."
Mitchell Osak is managing director of Quanta Consulting Inc. Quanta has delivered a variety of strategy and organizational transformation consulting and educational solutions to global Fortune 1,000 organizations. Mitchell can be reached at mosak@quantaconsulting.com