I was prompted to write this article on corporate culture by two recent events that I witnessed in the past month. The first event was the Congressional Hearing for John Stumpf of Wells Fargo Bank. This bank was found to have fraudulently opened over 2 million customer accounts without the customer permission or knowledge. The driving force for this wholesale illegal action was the desire of bank employees to get bonuses for opening new accounts. Even though some 5,000 employees were fired, no one has offered a satisfactory explanation of why a bank with a perceived reputation for honesty would allow this dishonest behavior to occur. It is hard to believe that 5,000 employees in branches across the country colluded to gain their bonuses in this fashion without their immediate supervisors knowing about it. Why did 5,000 employees think this behavior was acceptable to their managers and to their customers?
The second event related to corporate culture occurred recently as my wife and I were taking a Viking River Cruise. Throughout the two week cruise, we were treated with dignity and respect as was every other passenger on the ship. Every member of the crew went out of their way to make sure we were happy and comfortable. Their gracious hospitality was not forced or given grudgingly. They seemed genuinely interested in our welfare. They made decisions to provide us with extra amenities without referring our requests to supervisors. What was the corporate culture of the Viking ship that gave these employees the power and confidence to provide for us without being ordered by management? What was the difference between Wells Fargo and Viking Rivers Cruises?
Let us first define corporate culture: The APICS Dictionary defines this term as “The set of important assumptions that members of a company share. It is a system of shared values about what is important and beliefs about how the company works. These common assumptions influence the ways the company operates.” Management consultants and managers recognize that corporate culture can make, or break, a company, especially a small business. A healthy culture can increase the commitment and productivity of employees. The reverse, can strangle a company’s performance or even lead to business failure.
Every organization (corporate, club or team) has a culture. It occurs naturally. However, you can change an organization’s culture if necessary.
To identify your corporate culture ask yourself the following questions:
- What 10 words best describe your company?
- What is really important at your company?
- What does it take to get promoted?
- What behaviors get rewarded?
- Who fits in and who doesn’t fit in the company, and why?
How can a business owner, (or department manager) develop a healthy corporate culture or department culture? Here are some simple parameters:
- The corporate culture begins at the top. It is set by the managers or ownership team. The owner or manager needs to explain and share his vision for the company or department with the employees.
- Treat all employees equally. The interaction with employees should be based on respect for each of them. Small business owners who hire family members should be very cautious about giving them special treatment.
- Hiring decisions should be based on reinforcing the corporate culture. This also applies to promotions within the company. Workers who will treat customers and fellow employees with respect and dedicate themselves to mastering the tasks assigned to them will reinforce the “good” culture.
- Communications is essential and must be two way.
If you are unsure of your corporate culture, consider the following warning signs:
- Increased employee turnover
- Difficulty in hiring the needed talent
- Employees arriving and leaving work exactly on time.
- Low attendance at company events.
- A mentality of “them versus us” between employees and management.
- Declining quality
- Poor customer satisfaction.
A business or department showing any of these signs has a culture problem and this problem could, at the very least, lead to poor performance.
What is your corporate culture?
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