The importance of a company culture and what we tend to forget
Companies with a strong business culture can account up to 30% more in their performance than their competitors lacking such a strong business culture. So why is it that it seems that the culture of companies is becoming less important and that short term successes may overrule the true culture of a company? Is it fair to say that a company’s culture has become less dominant for the sake of short term success?
From a individual perspective there tends to be more interest in finding out what really drives people. For example, you can’t read your daily news pulse on LinkedIn without seeing references to Simon Sinek’s “Start with Why” and his concept of Why, What and How. A great and useful philosophy by all means. This concept can strongly be combined with one of my favorite books “Tell to Win” by Peter Guber. When you unite both ideas you have gold in your hands so to speak. So the need for having a “Why” seems to be ubiquitous for us as individuals. Does the typical average business have that same need when blue printing their company’s DNA and “Why” or is everything secondary to bringing in the “biggest bang for their buck”? Is a CEO sanctioned to change a company culture just for the sake of making money on the short term but actually hurting the company (and its customers) on the longer term? Recently it was announced that Silvio Berlusconi is selling football / soccer club AC Milan to a group of Chinese investors. Will that change the culture of this Italian icon? It probably will. Will this football club be true to their roots, heritage and culture? To a certain extend for sure but probably not as much as prior to this deal. And AC Milan is not alone. Think about Paris St. Germain, Manchester City, etc. Or think about that small medium family enterprise that got an external egocentric CEO, nicknamed “Be Trouble” onboard and is now changing pretty much everything just to clean up their bottom line and get the company ready for sale. And while at it, letting go of some valuable aspects of the company culture. Legal? Yes. In line with the company culture? Not so much. These kind of CEO’s are in the useful and insightful book “Return on Character” called “Self-Focused CEO’s” versus the real inspiring “Virtuoso CEO’s”. Where obviously the Virtuoso CEO’s are demonstrating preferable behavior and are more successful.
Why did Steve Jobbs go back to Apple? He didn’t like where the company’s culture was going. Was he the only (former) CEO who didn’t like the changes of where his business’ culture was going? No he was not. Other CEO’s stepping back in the game were / are: Howard Schultz (Starbucks), AG Lafley (Procter & Gamble) and Michael Dell (Dell).
It’s interesting; most trending items on social media in general are #love #follow #happy #summer #fun #friends. None of them relate to business or the culture of a company. Why is that? And what is culture anyway? The components of a culture include symbols, language, values, beliefs, roles, norms and social collectives. Within a business all of these components should be intertwined by the company’s vision, their values, practices, its history, people and management. If any of these components come loose of a company’s culture, it’s up to the stakeholders to change course. My personal belief is that the culture of a company in the decades to come will only become more important. Students today are more aligned with Simon Sinek’s philosophy than previous generations. The next generation is all about having fun, enjoying life and less about making money, quick return of investments, etc. And you know what? I think they are right! It should be about having fun! About growing, developing. But having fun combined with building a strong career path and still being successful, while still holding on to your beliefs.
Culture eats strategy for breakfast - Peter Drucker
So where does that leave us? Well, there are certain companies that stick to their guns. They work hard not changing their company’s culture (negatively), who prefer to be honest to their beliefs. Japanese companies are for example strong in that regard. When you start working for a company it could be helpful to thoroughly check if your personal beliefs are aligned with the business culture of the company you are going to work for. Or when you initiate a business partnership with another company check rather their values and norms relate to yours? You would think that during a due-diligence the cultural aspect is checked very methodically. You might be surprised however how many of those aspects are actually overlooked or disregarded. Just think about the biggest merger and acquisition disasters like Quaker Oats Company and Snapple Beverage Company, America Online and Time Warner.
A final thought
When working with or for a certain individual, a team or a company always bear in mind and check if their beliefs, norms and values are close to yours, and vice versa. And especially that you stay true to your own. Assess the people around you. Where do they really stand for? In Dutch culture we score for example high on individualism, low on masculinity. Where the American society also scores high on individualism but low on long-term orientation. Japanese culture on the other hand scores high on masculinity and uncertainty avoidance but low on indulgence (see Geert Hofstede’s cultural dimensions). Of course we should not generalize complete cultures but we should keep in mind that our personal beliefs and the values the company your work for are merely the same. If not, well then I guess you have a little more soul searching to do in order to find out if you are okay with these discrepancies or what you will actually do to close the gap.
About the Author: Sandor Willems is an international Sales Leader, Marketing Strategist and Business Developer and owner of NOBO | No Boundaries. Always looking for breakthrough concepts and new initiatives in order to support your organization's Commercial Excellence. Intrigued how Sandor Willems can help your organization? Feel free to email him at info@nobo-online.nl
