As Richard Branson said ‘There’s no magic formula for great company culture.’ The idea of a company ‘culture’ is one that is of concern to many business owners as an important aspect of their company, and one that is discussed with business advisors. This is interesting, as corporate culture is one of the most elusive and beguiling subjects for a business to address in a comprehensive way.
The most common definition of an organisation’s culture is: ‘it’s the way we do things around here.’ Whilst this is largely true, it doesn’t offer us any pointers about the quality of the organisation or, indeed, how the culture developed; this phrase could equally apply to a poor organisation as it could an excellent one.
However, there is some truth in this definition, and many would agree a culture is usually one that has evolved over time and will continue to change as the business develops and grows. This is a process that involves many factors from company performance, its size, and location, to the management, external market, staff attitudes and change initiatives. And of course, it’s impossible to effectively manipulate them all to create a genuinely progressive organisation.
Changes made to any of these aspects can, and will, have an effect of the culture, and not always in a positive way. The main issue here is that culture primarily affects the people within the business and given that the knowledge, discretion and commitment of staff are crucial to success, this makes an understanding of the company atmosphere extremely important.
For SMEs, this culture is arguably easier to manage, at least initially. The mores and behaviours in the company will often develop and be borne directly from the management team as they build the business. Informal ways of working become an enjoyable daily ritual and a motivating ‘esprit de corps’ drives the business forward. Eventually, as the business grows, a ‘tipping point’ is reached and something changes. The informal becomes formal, equal colleagues become manager/subordinate, directors become more distant and processes start to creak. Inevitably the culture will change and not necessarily for the better, possibly leading to an increase in staff turnover, the loss of important knowledge and less commitment, all of which will feed through to customers in one form or another.
So how does a company combat these risks? It’s not easy but it can be done. Culture, like any other aspect of a business, needs to be understood and planned. If a business knows the culture it has (or wants) it can then identify those things, both formal and informal, that sustain it and look to crystallise and build upon them.
Academics such as Johnson & Scholes (Exploring Corporate Strategy) and Cameron & Quinn (Diagnosing and changing organisational culture: Based on the competing values framework) have both offered useful models to analyse cultures to identify these aspects and both are worth reviewing. They suggest:
- Involving the staff in the cultural process is important so good communication and participation is crucial
- Formal methods such as staff surveys and the like can be useful but only if the results are used to good effect
- Reward structures can also help, especially in encouraging the right behaviours and discouraging those that are not desirable
- Finally, well-conceived staff development will allow employees to assimilate change and grow alongside the company
The most important factor, however, is recognising that all companies, regardless of size, have a culture and this needs to be constantly reviewed and nurtured in just the same way as sales figures and stock levels. In doing this it’s possible for all companies to create a culture that their staff can engage with and that offers real, long-term benefits to the organisation.