What is Corporate Culture

When I Googled “what is corporate culture,”the first response was, “Corporate culture refers to the beliefs and behaviors that determine how a company’s employees and management interact and handle outside business transactions. Often, corporate culture is implied, not expressly defined, and develops organically over time from the cumulative traits of the people the company hires.”

I thought that was a pretty good answer. Early in my business career, I never gave it much thought. During my first stint as an executive of a medium-sized company, I thought of infusing my company’s personnel with a collective sense of pride and undying dedication using well-timed motivational speakers and fancy slogans; in hindsight, how foolish. To be fair, in the 70’s and 80’s the notion of corporate culture being critical to success in business was not something on which the management consultant witch doctors (I was one once) focused. Instead, we were told that we must devise an uplifting mission and vision statement full of platitudes (a platitude is a phrase or statement that you would add, “well, I would think so”). Vision and mission statements chock-full of obvious phrases and cliches defined the company and its culture.

As defined above, corporate culture is all about beliefs and behaviors that are systemic within the organization cultivated and nurtured over time. In a small business, the company takes on the personality of its owner/operator. Larger company culture tends to reflect the collective actions of its leadership. For example, Intel’s Andy Grove built a corporate culture known for developing world-leading innovation, excellence, and productivity by introducing OKRs (Objectives and Key Results). The persistent actions of corporate leadership and the attitudes, biases, morality, or immaturity can profoundly affect a business’s success or failure. Given that, corporate culture is something that should be defined, developed, and managed.

About 20 years ago, I was rummaging through the bargain bin of a used bookstore, a hobby of mine. I came upon a thin paperback called ICE. ICE stood for Internal Consulting Expertise. For some reason, I picked it up and bought it. Little risk as the price was only a dollar. When I read the book, I found the most practical and effective method of building culture within an organization that I had ever seen.

Essentially ICE is a set of actionable values that harmonize behaviors within an organization to guide interactions between personnel, customers, and other stakeholders. These values work best when developed and agreed upon by all members within the company to achieve specific objectives. For example, improve customer satisfaction, elevate employee morale, increase productivity, reduce downtime or accelerate sales, etc. ICE also helps organizations map where they are, related to living up to the optimal values, whether there is room for improvement, not delivering, or avoidance.

The basic premise is that feelings generate all actions, whether positive or negative. Decisions regarding buying, staying with a company, cooperation, taking the initiative, sharing ideas, meeting deadlines, or dedication to quality are all made or heavily influenced by feelings. One can argue the business decisions are made based on facts and information. However, many times a customer went elsewhere because they felt neglected, or an employee left because they felt frustrated or used, or the team missed deadlines because they didn’t care, or a customer felt compelled to give referrals because the company made them feel important. Often feelings don’t necessarily line up with the facts. It is therefore vitally important we pay attention to values and how they generate feelings.

Setting up actionable values for an organization is deceptively simple but requires a lot of work. First, the organization should develop a set of shared values within the organization and then decide how to apply them in the various operating units. For example, the shared values would be interpreted slightly differently for the challenges facing sales and marketing, operations, IT, investor relations, or suppliers.

Values are those rules that guide decision-making, which guide actions, which generate results. For example, a set of shared corporate values could look like this:

What are the attractive values to which the company subscribes and the related stakeholder results?

ValuesResults
Stakeholder first
Listen before you speak
Promises are commitments
Under-promise – over-deliver
Poor quality is not an option
One team
Proactive, not reactive
Celebrate success; learn from failure
Important
Respected
Trust
Value
Reliability
Consistent
Visionary
Fun; empathy

Here is how these values could be interpreted by the sales department, and the related feelings instilled in the company’s customers:

ValuesResults
Customer rules
Listen and learn
Honesty always
Under-promise – over-deliver
Single point of contact
Never say die
Proactive, not reactive
Celebrate success
Important
Respected
Trusting
Fulfilled
In control
Admired
Helped
Appreciated  

Now let’s look at how the IT Department could interpret these values:

ValuesResults
Stakeholders rule
IT enables the vision
Deliver what is promised
Under-promise – over-deliver
Failure is not an option
Leading-edge
IT as a strategic advantage
Reward success
Respected
Supported
Trust
Value
Reliable
Strategic
Competitive
Appreciated

What values must a company avoid to prevent instilling negative feelings in its stakeholders that could erode its market position and destroy the company?

ValuesResults
“Me” first
Speak, don’t listen
Promises are meaningless
Over promise – under deliver
Quantity, not quality
Everyone for themselves
Reactive, not proactive
Ignore success; punish failure
Unimportant
Disrespected
Betrayed
Manipulated
Used
Confused
Ignored
Disappointed; wary  

The last set of values generally are not planned unless someone has a wish to fail. They do, however, creep into the corporate culture of many companies as a direct result of avoiding the work and dedication required to institute a good set of values. Also, businesses do employ managers that do not have a strong set of personal values and do not see the need or understand the benefits of developing a set of positive corporate values. But, on the other hand, for the managers prepared to do the work, the rewards both financially and for personnel can be enormous.

Developing a set of actionable values for a company and its operating units is only part of the task. Instilling a set of values to become part of employees’ and management’s beliefs and behavior is required to monitor actions within the company and assess whether the business is living up to its values and generating the best results.

One approach is to view actions against four criteria.

  1. Attractive Results – The company is following through on its positive values, and the stakeholder is happy. But, again, this is the best-case scenario.
  2. Opportunity Gap – The company believes it delivers on its positive values but isn’t entirely giving the stakeholder what they want. There is room for achievement.
  3. Repulsive Results – The company promises to deliver on its positive values but doesn’t have the discipline to deliver at all. As a result, the company is not delivering to the stakeholder.
  4. Strategic Avoidance – The company has poor or no values and thinks that developing an internal culture is a waste of time. So what the stakeholder wants is ignored or not even considered. As a result, the company is in trouble or soon will be.

I have used the ICE method several times to change the internal culture of client companies. So I know that the technique works and the results can be transformational. However, it is one thing to introduce the concept and an entirely different thing to implement. Yes, the concept is simple to understand but requires effort, dedication, and discipline to reap the benefits. But the benefits can be astronomical.

If your business is hurting, maybe apply a little ICE.


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