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December 6, 2011
Corporate Culture — Does it Really Matter?
There’s a lot of talk these days about organizational culture, and more and more companies are beginning to describe their cultures as key differentiators. Is this just a passing fad, or is it really that important? Let me answer that for you from three perspectives — from leadership, from customers, and from workers. But first, we need to agree upon a definition so that we can be sure we’re all referring to the same thing.

What is it?
An organization’s culture can best be described as the “commonly held set of values and principles that shows up in the everyday behavior of its people.” Notice that I’ve italicized the last part of the definition.  The culture is not defined by the framed prints in the boardroom or the statements of values on the website. Rather, the culture is defined by how people actually behave on a day-to-day basis. And every organization does have a distinct culture, whether by design or by accident. You notice it immediately when you walk in the door or even when you deal with them on the phone. So why is this important?

The Leadership Perspective
The reason culture is so important from a leadership perspective is that, believe it or not, it’s the single most significant influencer of organizational performance. Let me show you why. Consider the company where you work and think about all the various job functions that exist there. You may have sales people, finance people, operations folks, clerical staff, shipping and receiving, a receptionist, etc. Now imagine that every single one of those people didn’t care about the quality of their work, they were disengaged, they didn’t like or trust their boss and the company, and they couldn’t wait to go home every day. Now take a moment to imagine the opposite. Imagine that every single one of those people loved what they were doing, were fully engaged, were totally committed to the company and its mission, felt acknowledged and appreciated, and demonstrated a passion for excellence. How do you think the bottom-line performance and results would compare between these two scenarios?

Of course it’s obvious that the second company would outperform the first one every time. And what do you think most accounts for the difference in how those people show up at work? It’s the organizational culture. The culture is what most determines the attitude and style with which people approach their work every day. The two examples I gave you were illustrations of vastly different cultures — and they produce vastly different results. Great organizations and their leaders understand this, and they take very specific steps to intentionally create and sustain the organizational cultures they want to have.

The Customer Perspective
It’s often said that people buy from people they like. Think about your favorite vendors. It’s likely they have great cultures. You probably enjoy working with them or purchasing from them. When we deal with companies that have great organizational cultures, we typically feel more comfortable, we’re more confident that they’re likely to do what they promise, we have more confidence in the quality of their products, and we simply like them more! Think about companies like Zappos, Southwest Airlines, Apple, the Ritz-Carlton, or even Chick-Fil-A. We like doing business with them, and their corporate culture is a big part of it.

The Worker Perspective
We each bring to the workplace our own set of values, heavily influenced by our families, our upbringing, and our prior experiences. When we work in an environment that matches our values, we feel a sense of fit and belonging. It’s easier for us to get engaged, and consequently, to do our best work.

Just as great organizations are purposeful about selecting employees who are good culture fits for their unique workplace, smart workers are just as purposeful about selecting employers whose corporate culture matches their own style and set of values. Clarity is a key to doing this successfully. The more clearly an organization has defined and institutionalized its culture, and the more clearly a worker or potential worker has thought about his/her own value system, the easier it is to find a mutually good fit.  And the better the fit, the easier success becomes — on all fronts.

Incidentally, if you’re a job candidate trying to assess the culture of a potential employer, here are just a few simple suggestions:
  • Notice how the receptionist answers the phones
  • Notice how strangers/visitors are greeted
  • Notice how people relate to each other
  • Notice how much/little people smile and seem to be having fun
  • Notice the physical aspects of the work environment
  • Notice how prominently values are/are not displayed in the workplace, on the website, in the corporate materials
  • Notice to what degree the company talks about its culture
  • Talk to current employees to get a sense of how they feel about the culture
Organizational culture is indeed a critical success factor. Underestimate its importance or overlook it at your own peril. 

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David Friedman is the former President of RSI, an award-winning employee benefits brokerage and consulting firm in the Philadelphia area. The author of Fundamentally Different:  building a culture of success through organizational values, Friedman is a sought-after consultant, guest speaker and seminar leader on organizational culture, leadership, and values. 
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