Why Corporate Culture is so important in 2021

Leslie Tedgui – 18 February 2021 – Reading Time : 10 minutes

In the digital age, the competition to develop innovative new products, capture customers, and achieve widespread brand recognition has grown fierce.

Without a talented team that will push to make you first to market and become brand ambassadors for your company inside and outside the office, you’ll soon find yourself out of the running.
That’s why attracting, retaining and keeping talent engaged and motivated has become a top priority for businesses, leading to a ‘war for talent.’

And just what is the key to winning the war for talent? A survey by the Korn Ferry Institute revealed that the number one reason candidates choose one company over another was company culture.

In this guide, we will deep dive into why corporate culture is so important in 2021!

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The new reality of the corporate world

 A shift can definitely be attributed to the new generation that’s now dominating the workplace. According to Jeanne MacDonald, the organization’s global operating executive, “Millennials are absolutely looking for culture and fit. They want to feel good about where they’re working and require a shared sense of purpose.”

Beyond hiring, a study by Gallup found that employees with a strong connection to their organization’s culture show higher levels of engagement. And, according to Harvard Business Review, organizations with high levels of employee engagement report 22% higher productivity, lower turnover and even fewer safety and quality incidents. 

Not only does corporate culture help attract and retain employees, it can also be leveraged to instill certain norms within an organization and align the team towards common objectives. For example, in 2014 Facebook replaced its famous motto, “Move fast and break things,” with “Move fast with stable infra,” signaling a clear shift in its way of working and mentality as the company matured. While in the beginning it was important to build as fast as possible (even if there were bugs along the way), now the company promises its users it will fix all bugs within 48 hours.

All of these potential benefits have led to the rise of ‘employer branding’ with HR teams using traditional marketing tactics to promote their culture externally and attract more talent.

But a word of caution. While company culture can be a powerful tool for your organization, it can just as easily undermine your employer brand if your efforts aren’t sincere. Just like consumers, employees are now able to share what it’s really like inside your organization via sites like Glassdoor. Therefore, developing a corporate culture that only looks great from the outside, isn’t going to cut it. 

But the great thing is that putting your efforts into building a truly great corporate culture for your current employees will pay off. According to the study by Gallup:

  • Engaged employees are more likely to refer friends to their organization
  • And 71% of workers say that they use referrals from current employees of an organization to learn about job opportunities

What is Corporate Culture?

Corporate culture refers to the beliefs and practices that exist within an organization and it determines how employees and management interact as a team, and how they conduct business.

It’s not necessarily something that is explicitly defined but is often implied through various factors such as dress code, office setup, business hours, employee benefits and how the team celebrates achievements or addresses failure. Harvard Business Review identifies six components of a great corporate culture.

  1. Vision: an organization founded on an authentic mission provides purpose and direction, helping employees and stakeholders make all of their decisions.
  2. Values: While a vision defines a company’s purpose, defined values offer guidance on the behaviours needed to achieve that vision.
  3. Practices: It’s all well and good having nice values on paper, but these are redundant if people don’t incorporate them into their everyday life.
  4. People: Culture is created by the people themselves! 
  5. Narrative: The ability to craft your company’s history into an ongoing story that can be embodied by your employees.
  6. Place: This refers to both the physical space and location in which you work, the geography, architecture and aesthetic design and layout all impact the culture of your business.
Corporate culture

Where is corporate culture going?

We’ve come a long way since we began to truly understand the key importance of corporate culture. The term itself emerged in the 1960s, becoming developed and widely known in the 1980s, being used by managers and academics to describe company character. This included the generalized beliefs and behaviours of the company, management strategies, the work environment and employee attitudes. 

But the contemporary workplace is going through major changes. Digital transformation is taking hold and in need of, not just new digital talent, but also new approaches to talent management. Traditional top down hierarchies are being toppled in favor of flatter and more autonomous ways of working. At the same time, a company’s moral compass is becoming more heavily scrutinized with consumers favoring brands that take a strong stance on improving diversity and sustainability.

Here are just a few of the most important trends we’re seeing in corporate culture right now: 

A culture of diversity and inclusion

While for decades discrimination and disparities in pay and opportunities faced by women and minority groups has been apparent, in recent years the push towards building a more diverse and inclusive workplace has finally gained traction. 

There are a number of reasons for this, one very important one being that, having greater diversity in the workplace is not only the right thing to do, it also significantly impacts a company’s bottom line. In fact, according to a report by McKinsey, companies in the top quartile for racial and gender diversity are respectively 35% and 15% more likely to have financial returns above their national industry medians. And that’s not all. Studies show that greater diversity and inclusion helps companies:

Attract more talent. According to a study from Glassdoor, 67% of job seekers say that a diverse workforce is important when considering job offers.

Solve problems faster. Harvard Business Review found that diverse teams are able to solve problems faster than a group of cognitively similar people. 

Improve decision making. A white paper from online decision-making platform Cloverpop found a direct link between diversity and decision making, with researchers finding that diverse teams making decisions outperformed individual decision-makers by 87%.

Drive innovation and profits. A 2017 study from the Boston Consulting Group revealed that diversity in the workplace is a key driver of innovation and that diverse teams produce 19% more revenue.

Despite these advantages, the numbers aren’t reflective of the diversity within our society. Looking at data from tech corporations, little has changed in the six years since companies like Facebook, Microsoft and Twitter began publishing diversity reports. While women have seen a slight increase in representation, black employees have seen little increase in their representation in the tech industry. And despite this slight increase, women leadership still suffers, as they represent 45% of the S&P 500 workforce, yet only 4% of CEOs are female.

The key here clearly isn’t just to focus on hiring more diverse talent. Instead, creating an inclusive corporate culture is essential to fostering a truly diverse workforce. Andres Tapia, author of The Inclusion Paradox, offers a simple way to understand the nuances between these two words. 

“Diversity is the mix. Inclusion is making the mix work.”

So diversity is having a range of approaches, styles, cultures and backgrounds within your organization, whereas inclusivity is ensuring that these differences are valued by providing an open environment in which everyone is given equal access to growth opportunities and decision-making roles that will enable them to reach their full potential. This means that while diversity is something that can be measured, inclusivity requires direct action.

 

A culture of agility

 

In our fast moving digital world, lean and agile startups have greatly benefited from being able to quickly adapt to sudden market changes, disruptive technology and fast changing business priorities. Now larger corporates are learning from their more nimble younger siblings by embracing agile leadership.

In fact, a study by McKinsey found that companies which have introduced agile management strategies were better prepared to respond quickly to the sudden changes brought on by Covid. And it’s likely that these organizations will come out on top in the uncertainty of the ‘new normal.’

However, McKinsey also found that the human factor was the biggest obstacle for organizations that want to introduce this change. Indeed, 76% of the organizations they surveyed said that transitioning to agile management and adopting these new ways of working was the biggest hurdle.

This really illustrates the power that company culture can have in setting the tone for the rest of the organization. However, changing your corporate culture isn’t impossible. In the next section, we’ll provide insights into how you can do this. 

 

Innovation management/Creating a culture of continuous learning

 

Innovation is what all companies strive for. Today’s workforce is focused on creating new ideas, processes or products that will get them ahead of the competition. But, while innovation is our end goal, using traditional factory style management strategies are not the means that will get us there.

Instead, companies are now shifting towards innovation management strategies that foster bottom-up innovation. They’re introducing new processes like design thinking, prototyping and rapid experimentation. However, this vastly different work environment also requires a new type of leadership.

The role of management is changing significantly. Instead of being seen simply as supervisors, managers are now taking a more active ‘coaching’ role tasked with helping each of their team members reach their full potential.

The best way to do this is by fostering a feedback culture that promotes continuous learning and development. In fact a study by Deloitte found that high performing learning organizations are:

  • 92% more likely to innovate
  • 46% more likely to be first to market
  • 58% more prepared to meet future demand
  • 37% greater employee productivity

 

However, a survey of millennial employees by Gallup found that only 19% receive routine feedback and only 17% say the feedback they receive is meaningful. In fact, only 21% meet with their manager on a weekly basis.

And with teams now working from home, it’s likely that employees will get even less individual coaching from their managers, unless you already have a strong remote management strategy in place.

Becoming a great coach isn’t something inherent. It’s something that managers need to learn. It takes time, training and effort to help managers transition to a continuous feedback culture. This is where executive coaching options can help.

 

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How to create a strong corporate culture

You can build corporate culture by reflecting on the six components we previously identified. 

Step 1 Vision and values: Craft a strong mission statement and set of values

As discussed previously, a company’s vision and values go hand in hand. While a company’s vision or mission statement provides purpose and direction, values are the behaviors and norms needed to achieve that vision.

These will provide the basis for your corporate culture, so it’s important to spend time in crafting a vision that reflects what is most important for your organization. Do you want your company to be known for developing cutting edge tech products or always putting customers first?

Look to other companies’ mission and value statements for inspiration.

Step 2 Narrative and practices: Develop your company’s narrative and create rituals

Your company’s origin story plays a major part in defining your corporate culture. Stories are what connect and inspire us. They provide deeper insight into your company’s beliefs and purpose. Start by considering why your company was founded? How was it founded? And who was behind it? How are these elements reflected in your company’s culture, vision and values?

All cultures have their own rituals. Whether it’s celebrating Christmas or wearing the same jersey on game day. Creating company rituals can bring your company’s narrative into the present by allowing employees to live and breath your corporate culture. 

For example, outdoor sports equipment company Patagonia has a policy that encourages its employees to go surfing at the nearby beach when the surf is up. As the company’s CEO explains in his book, Let my people go surfing, this culture keeps the company’s employees focused on what’s most important: their shared passion for the outdoors. 

What connects you as a company? Is it promoting internal sustainability initiatives or taking time to recognize big team wins in a special way?

Step 3 People: Grow and maintain your culture

To ensure your corporate culture actually takes root, you need to onboard both current and all new employees to the company culture. When you’re just starting out, it’s important to select culture ambassadors who will help to spread your company’s culture throughout the organization. Middle managers should also receive training on how to promote and spread your culture within their teams.

Once your culture is alive and thriving, you need to continuously cultivate it by ensuring new hires are properly onboarded. There are a number of ways you can do this. First, it’s essential that you help recruiters define what a culture fit for your organization means. Make sure communicating your company’s vision and values is part of the hiring process. Once new hires come in, they should be introduced to your company’s narrative and rituals. 

Step 4 Place: Your office space should reflect your corporate culture

You may not realize it but the way your office is designed says a lot about your company. It’s the first thing newcomers notice when they enter the building. It’s the physical environment in which your employees interact, focus and innovate. As such, it’s important that this space reflects your company’s vision and values.

If peer collaboration is a key value, provide opportunities for employees to have social interactions with open office spaces and central points where people from different teams converge and connect. Conversely, if keeping your users’ sensitive data safe is important for your organization, ensure you have code access rooms and security checks at the entrance. As you can see, these two very different types of office spaces will signal the different behaviors expected of employees and visitors.

Although with our rapid shift to digital communication, thinking about the office may be rather redundant. However, it’s important to find ways we can express ourselves and connect in the digital space. Using these digital channels for open communication is essential to not only communicate company values but to foster an environment where employees can share their ideas without fear of repercussion.

The role of executive coaching

Companies can and should leverage culture to guide their workforce in the same direction and instill certain behaviors across the organization, whether it’s promoting an open and inclusive work environment or making growth & development a key priority. However, culture change takes time and effort. Managers, employees and even the executive level need to be onboarded to the changes you’d like to see take place.

Utilizing executive coaching can be a great way to facilitate culture change and ensure progress towards an empowering environment. In fact, professional coaching goes beyond nurturing culture. It’s a highly effective tool at implementing many other strategies of workplace wellness, with both individual coaching and group coaching being useful for enacting change within your organization.

Corporate culture in a nutshell…

By looking closer at corporate culture, it’s clear that every business and organization should be aware of the dramatic impact it can have. Talent management, job satisfaction, and increased productivity are all things that improve when working in a positive culture. But this only happens when you take time to shape and grow the culture you want to see within your organization.

Whether it’s developing strong corporate values or considering professional coaching options, there are a number of ways you can begin strengthening your corporate culture now.

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Leslie Tedgui
CMO
SUCCESS STORY EXECUTIVE COACHING
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