What is corporate culture, who does it well and why is it important? What steps can organisations take if they want to positively influence the culture in their workplace?
What is corporate culture?
Defining corporate culture is difficult and measuring it is even harder. In short, it’s the values, beliefs and attitudes that guide actions within a company. Having a concrete vision of what you want your organisation to represent makes it a better place to work and appealing to clients as well. After all, a full time employee spends an average of 40 hours in the workplace every week and as such, the cultural dynamic is of utmost importance to employees’ happiness.
Beyond employee wellbeing, company culture has also been shown to have a tremendous effect on companies' financial performances. Managing workplace culture is a critical business function nowadays and in summary, a strong and positive workplace culture is believed to:
- Reduce the risk of misconduct from employees
- Promote innovation within teams
- Help with the attraction and retention of highly qualified talent
- Enhance a firm’s reputation by creating a positive public perception
The 4 types of corporate culture
Whilst every company is different, and cultures can vary massively across sectors and locations, there are supposedly four organisational types workplace cultures can fit into:
- Clan Culture: Friendly working environment where leaders are seen as mentors and employees are loyal. There is great involvement across the business and the organisation emphasises development of existing team members
- Adhocracy Culture: Dynamic and creative working environment where employees are encouraged to take risks by their leaders who are innovators and risk takers themselves.
- Market Culture: Results focused workplace where people are encouraged to be competitive by hard-driving leaders who have high expectations. The emphasis on success at every level keeps the organisation together.
- Hierarchy Culture: Formal and structured work environment where longstanding procedures decide what employees do. Smooth functioning of the organisation is crucial, whilst long-term goals are stability and results.
How do corporate cultures contrast across different sectors?
Different organisations require contrasting environments in which employees can thrive. Below we give a brief overview and analysis of the typical cultures seen at companies across Banking and Financial Services, Professional Services and Commerce & Industry.
1. Corporate culture in Banking and Financial Services
The 2008 financial crisis revealed significant cultural failings in the sector; dishonesty was rife from top to bottom in many firms. The primary factors contributing to these failings included a lack of clear corporate values, competing objectives and increased competition for skilled employees.
But since then, intense efforts have been made (under the watchful eye of the regulator) to rectify errors of the past. Financial Services firms have been striving to regain public trust by establishing stronger relationships with customers, regulators and shareholders that are based on truth, honesty and fair dealing.
In terms of the culture across Banking and Financial Services, a motivating environment is required to keep employees engaged and it should be the direct responsibility of leaders to maintain this. In order to effectively manage culture, senior management should be visible proponents of the ‘culture plan’ - they should personally encourage feedback and conduct meetings to establish direct lines of communication. Speaking as a whole, Financial Services firms seem to fit best into Market Culture.
Financial Services firms creating a positive culture...
- Citigroup has created an ethics and culture committee that advises employees on real ethical dilemmas they may experience in the workplace through a series of web-based videos
- Bank of America is actively encouraging employees to escalate any issues or concerns, establishing a high level of transparency and open communication
- Wells Fargo is gathering feedback from employee surveys to better understand current trends and identify areas of weakness in its culture
2. Culture across Professional Services
It is often believed that culture in Professional Services firms is largely left alone, with little thought to how it could develop into anything other than the organisation’s original vision or purpose. The firms seem to think they know what works well and stick to it. One encouraging exception to this trend is the particular attention Professional Services firms are giving to diversity and inclusion; after all, this is a key building block to a healthy and more productive workplace.
Those employed in the Professional Services sector are highly trained, focused on their particular practice and have a high drive for prestige, but despite this, firms must still nurture a healthy and inviting culture. Given the fact roles across tax, legal and audit are paid well and generally synonymous with long working hours, certain employees tend to care about workplace culture more than additional benefits and compensation when considering a new position.
The primary focus for Professional Services firms should be fully understanding employees' needs, eventually learning what intrinsically motivates individual employees. This high level of engagement is hard to roll-out and maintain, but it will do wonders for business-wide culture. Across the board, the environment at Professional Services firms appears to be Hierarchy Culture.
Professional Services firms taking steps to create positive corporate culture…
- Orrick, the law firm focused on providing legal solutions for the technology, energy & infrastructure and finance sectors, heavily focuses on honest and ethical business practices
- PwC, named one of the UK’s 50 best places to work in 2019, put their people at the heart of every function within the firm and particularly focus on development, flexibility and inclusion in order to create an open culture
3. Commerce & Industry corporate culture
Organisations within this sector, such as technology firms, retailers and FMCG companies, should promote a fully transparent culture that is directly connected to their brand image. In this day and age of clear desire for honesty, both customers and prospective employees want this high level of transparency. Companies that are successful in this respect consciously cultivate and manage their culture; as a result, it gives them a competitive advantage in the marketplace.
Generally, those across Commerce & Industry, and more specifically Tech companies, are considered the pioneers of establishing unique and inviting work environments. Speaking as a whole, these organisations fit could be considered as Adhocracy Cultures.
Organisations creating positive corporate culture…
- Starbucks investigated thousands of social media posts to gain an objective view of its culture through the eyes of its employees, subsequently taking specific actions to reinforce cultural strengths and address weaknesses
- Google has been synonymous with a different and inviting culture for years, and has set the tone for many of the workplace perks startups are now known for - as a result, their employees are driven and highly talented
Four indicators of an organisation with a “good culture”
As previously mentioned, every organisation will have different expectations of what constitutes a good corporate culture. This said, there are a few consistencies that seem to contribute to establishing a positive environment:
- Tone from the top - Senior management should take clear responsibility for setting the core values and expectations for the organisation, and subsequently their behaviour should reflect these.
- Accountability - All employees should know the core values and expectations and be aware of the importance of upholding them, whatever their position.
- Effective challenge - At every level of seniority, decision making should consider a range of views by encouraging open discussion; inclusive culture advocates innovation.
- Incentives - Compensation that rewards those behaviours which support core values and expectations, whether financial or not, should be made available to all levels of employees.
If all else fails and an organisation is still struggling to establish an identity through its culture, they may want to consider enlisting the help of a third party organisation. There are numerous out there dedicated to helping companies create shared cultures and goals, embrace transformational change and communicate better with their employees and stakeholders by developing engagement strategies.