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  • David S Cohen

What is Corporate Culture?

During my recent talk at a Conference Board of Canada session on culture, I had the opportunity to ask the audience questions. My brief survey gave me some insights into the confusion many have about corporate culture.

I asked the following questions:

1. What is the foundation for a corporation’s culture?

2. Can corporate culture change?

3. Who is accountable and responsible for the culture of the company?

4. Can hiring a new CEO the answer to successfully changing the culture?

5. Which of the following is true about culture change?

An average of 120 people responded to each question. The results indicated that perspectives on corporate culture varied widely and made me concerned.

Before going further, please follow this link and answer the questions for yourself. At the end of the article, I will share the responses of those who replied at the conference.

What is Corporate Culture?

The definition of organisational culture depends on how you define the sources of corporate culture.

The discussion can be polarising and ambiguous. Edgar Schein once said that organisational culture is the “mysterious and seemingly irrational things that go on in human systems.”

Since 1952 the definition of organisational culture has been up for grabs. Kroeber and Kluckhohn gathered 170 definitions of culture.

Definitions seem to break down into two categories:

  1. The overt or lived culture (also known as reality),

  2. The covert or idealised culture (also referred to as the aspiration or ideal state).

In any society or organisation, the elements that are the foundation of culture are shared, and make the organisation distinct and unique. The culture is understood through various “conditions” such as rituals, artefacts corporate legends (stories), and traditions which create a living understanding of the ways the culture operates. When new hires come on board, they encounter that culture and learn and adopt it.

To define culture, you need to describe the way leadership has shaped tangible and intangible

understanding of the right way of doing things.

This is why culture develops over an extended period of time. It’s the recurring construct of how things are done correctly and incorrectly in a company. Actual behaviours and norms, not aspirational ideals, help employees get aligned. These are the ground rules of success as demonstrated by what leadership recognises and rewards.

The reality is culture flows from the top down. People look up to discover what makes leaders happy. They imitate the behaviours of leaders to gain approval.

As Schein wrote, culture is a:

“pattern of basic assumptions - invented, discovered, or developed by a group as it learns to cope with its problems of external adaptation and internal integration - that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those processes”

The Source of the DNA of the Culture

The DNA of culture is traceable back to the founder of the organisation who set the culture in motion.

When new leaders come into an organisation and try and change the values that underpin that culture it creates tension between employees who have been recognised and rewarded for following those values. New leaders need to understand that long-term employees will resist efforts to change the culture because that alters the ground rules of success.

To understand how employees view success, leaders need to consider the DNA that created the original culture – the unwritten rules. They should think about what the founders valued.

Is Your Company's Culture Actually Unique?

Another intriguing question in differentiating a company culture is the uniqueness of each company’s definition of the company values.

If each company’s culture is really unique, then cross-company generalisations are pointless.

However, personal pride in the company and high levels of employee engagement and retention indicate that people feel they are working in a unique environment.

My mentor, Howard L Fromkin’s research laid out how important it is for people to view themselves as separate, special and unique.

Sometimes employees leave for a ‘better opportunity' at another company. When they’ve left a strong culture, they tend to realise soon that the ‘grass is not greener on the other side' and there was something unique and special about the old company culture that they liked. While some aspects of an individual company culture might be found elsewhere, the behaviours and rituals will be meaningfully different.

In effect, this makes each company culture unique, despite overlapping similarities. Like human DNA, corporate culture can evolve, but it cannot be deliberately or quickly changed without causing real harm.

When people argue corporate culture can be changed rapidly, they’re usually defining culture so broadly that it includes things that don’t matter as much to employees. Employees will not resist a strategy change, for example, if it is aligned with the culture. This doesn’t make the strategy change a culture change.

When leaders try to replicate another successful culture through the guidance of a consultant or some “Best of” list, they risk long-term damage to the organisation. Transitioning, for example, from a structured top-down decision-making work environment to one in which suddenly employees are given decision making authority can cause immense stress and confusion. Your current employees have chosen to work in a top-down culture because it was comfortable and safe for them and aligned with their values. They can’t adopt a new culture right away.

Back to the Survey Results

Here are the answers to the quiz I gave:

1. What is the foundation for a corporation’s culture? (multiple choice)

  • 16.82%. The Strategic Business Plan

  • 0%. The Shareholders

  • 60.75%. The current employees

  • 22.43%. The values of the founde

2. Can corporate culture change? (yes/no)

  • 96.4%. Yes

  • 3.6%. No

3. Who is accountable and responsible for the culture of the company? (multiple choice)

  • 19.23%. The CEO

  • 33.33%. Everyone in the C-Suite

  • 47.44%. The Employees

  • 0%. Human Resources/Talent Management

4. Can hiring a new CEO the answer to successfully changing the culture? (yes/no)

  • 55.7% Yes

  • 44.3%. No

5. Which of the following is true about culture change? (multiple choice)

  • 37.1%. Culture can successfully change

  • 12.6%. Culture can successfully change about 50% of the time

  • 32.3%. Culture can successfully change about 20% of the time

  • 13.2%. Culture can successfully change about 10% of the time

Reading these results, you can see now why I was surprised by how much confusion there is around corporate culture.

That confusion will probably never be resolved. Culture may be too intangible for people to grasp clearly on a conscious level. But it is what determines the behaviours of the employees.

As the Nobel Laureate Bob Dylan once sang,

You’re right from your side

I’m right from mine

We’re both just one too many mornings

An’ a thousand miles behind

The pride we all feel in a unique culture is real, however, and deeply meaningful. The more you can articulate and follow that uniqueness, the better your employees will feel and the more the world will make sense to them. With a clear and consistent sense of right and wrong, they will be on your side wherever you lead them.

Your thoughts and comments on this discussion are appreciated.

#Culture #Values #EmployeeEngagement #Leadership