Company Culture: The Foundation of Success

“I used to believe that culture was ‘soft’ and had little bearing on our bottom line. What I believe today is that our culture has everything to do with our bottom line, now and into the future.” 

~Vern Dosch

Company culture is on the minds of many, if not most, leaders today. At one point, culture was misunderstood as simply offering perks such as ping-pong, video games and relaxed dress codes.  But we know better now. We know that culture is more than just offering cool perks or having a fun place to work. Culture is about the beliefs we have and how those beliefs are lived out in the day-to-day running of our business.  

This makes culture one of the most important aspects of an organization. Some have found it to be even more important than strategy or product. Peter Drucker is often credited with the famous line that “culture eats strategy for breakfast”.  A company may have a great strategy, but a poor culture will undercut that strategy every time.

What Drucker observed year ago was supported by researchers from Duke University who found that culture is a “top three value driver of the business and one of the most important forces behind value creation.” To put it another way, the culture of your company either enhances or diminishes the value you bring to your clients. No matter what business you are in, there is a direct connection between your company’s culture and its success and profitability.

It works something like this: The healthier the culture, the more engaged employees will be. Employees who are highly engaged are more effective. They produce higher quality work, are more efficient, and provide a better experience for your customers than less engaged employees. On the flip side, the unhealthier the culture, the less engaged employees tend to be, leading to lower quality work, less efficiency and a worse customer experience. So, our culture actually serves as a differentiator for our business and has a dramatic impact on our bottom line.

Because of this, one of the key functions of leaders is to build and maintain the right kind of culture. If we ignore it, or are not intentional about it, we can be sure that our culture will drift toward unhealthy waters.  

So, what does a strong, healthy culture look like? Many descriptions have been offered, but several common threads can be found.

In a healthy culture:

  • The stated values of the company are lived out in the day-to-day operations of the business
  • Employees feel that they (and their contributions) are valued and appreciated by their superiors
  • Collaboration and Teamwork are practiced and celebrated 
  • There is individual accountability for one’s commitments and performance
  • Leaders and Team members share a commitment to growth and continual improvement 
  • Employees believe that their work is making a difference
  • Relationships are marked by trust and mutual respect
  • There is a positive environment that enhances employee well-being

It is easy to see how this kind of culture would maximize performance. It is also easy to see why leaders must be intentional about building (and maintaining) this kind of culture. Organizations do not naturally drift to these places. Getting, and staying, there requires communication, guidance, and at times, course correction. It is hard, never ending work. But when we get this foundation right, it will improve everything we do as a company.

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