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Making your corporate culture a driver of business success

Corporate Culture
Corporate culture: a definition
Corporate culture example: how corporate culture shows up in daily business
Open corporate culture: an underestimated key factor
Corporate culture and business success: two sides of the same coin
A good corporate culture brings financial advantages
CEOs place more emphasis on corporate culture
How is corporate culture created?
Why change corporate culture?
Necessary adjustments to changes in corporate culture
Corporate culture: The iceberg model
Final thoughts: Corporate culture is a success factor

From talent shortages and demographic shifts to digital transformation, intense competitive pressure and the impacts of macroeconomic factors, leaders and their companies face more changes than ever to ensure a company’s success.

Performance, innovation and customer focus remain essential for success, but a positive corporate culture offers an undeniable competitive advantage, including financial benefits.

In this article, you’ll learn what corporate culture entails, how it develops and how you can positively influence it.

What is corporate culture?

Corporate culture is based on a complex system of shared values, social norms, symbols and attitudes of those involved. These elements influence organization members’ behavior, decisions and feelings across all hierarchical levels.

Corporate culture: a definition

The term “corporate culture” or “company culture” refers to the entirety of a company’s members’ shared attitudes, values and norms. Shared values form the defining background for company members’ behavior, decisions and actions.

The so-called deep structure – the level of values, attitudes and norms – forms the framework for the surface structure. The visible elements, such as dress codes, communication behavior and the manners of organization members, are recognizable to outsiders.

Corporate culture example: how corporate culture shows up in daily business

Corporate culture is like a company’s DNA. Its nature is evident in many everyday situations and behavioral standards. We’ve listed a series of questions to help you assess the state of your corporate culture:

  • How are mistakes and conflicts handled? Openly and constructively, or is there an overall culture of fear?

  • Do employees stand behind the company, or do they just do the bare minimum?

  • What is the behavior of employees toward each other and the boss?

  • Are achievements and efforts appreciated and communicated?

  • What is the company’s family-friendliness like? For example, is there childcare or support for caregivers?

  • Is there an organized employee feedback culture?

  • Does the leadership team fulfill its role model function, or do they not adhere to shared values?

  • Is the work-life balance of your employees well-adjusted? What kind of working time models are possible?

  • Are there forms of health promotion, such as gym memberships and cycle-to-work schemes?

  • Why do employees leave the company?. Their reasons can give you important insights into the organization’s culture.

The experiences your customers have with the company also reflect its culture. For example, if handling a complaint after a purchase is complicated and slow because the company does not value service and employees behave dismissively, it speaks volumes about the workplace culture.

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Open corporate culture: an underestimated key factor

Corporate culture touches all aspects of corporate coexistence and represents a significant business component for the entire success of the company.

Respect, appreciation and openness among people in a company, internally and externally, shape an open corporate culture.

Corporate culture and business success: two sides of the same coin

Whether it’s teamwork cooperation, the work culture, employee engagement, general employee retention and satisfaction or the company’s chances of recruiting the best candidates, a strong corporate culture is a considerable success factor.

Another advantage is the influence of good, lived company values that present the business as a brand in the context of employer branding. A good standing in this area is a magnet for top talent.

Corporate culture

A good corporate culture brings financial advantages

A well-regarded study by Heidrick & Struggles shows a clear link between corporate culture and financial performance.

It states that the organizational culture of the most successful companies was the “glue” that held them together in the face of the challenges of 2020.

CEOs place more emphasis on corporate culture

A substantial 82% of CEOs of large companies increasingly focus on corporate culture. Certain CEOs who meticulously and comprehensively advance cultural change, known as “cultural accelerators”, have noted a revenue increase of 91% for their companies compared to 44% for other companies.

This suggests that cultural change in a company significantly boosts the productivity of individual employees.

How is corporate culture created?

The good news first: there is no company without a corporate culture, however modest it may be in individual cases. If you want to advance your company’s culture, there are several supportive measures:

  • Formulate and communicate a mission statement together with management. The question is: What does your company stand for?

  • Train your leaders. They have a role model function and should bring a certain level of empathy and self-reflection.

  • Organize team training and events. Give team members a chance to socialize outside of work and develop personally

  • Offer your employees perks like opportunities for further education. Create policies that enable staff to study while still working for the company.

  • Encourage information sharing. A culture where employees create, share and update information through efficient processes allows them to learn from each other.

  • Communicate important information publicly. High transparency helps prevent employees from feeling “left out”, showing that you take people seriously.

  • Ensure candidates are a good cultural fit for the company during the hiring process. Make sure your Human Resources department has stages in the recruitment process to assess cultural fit.

By focusing on employer branding, you’re naturally contributing by communicating your corporate culture externally.

Why change corporate culture?

Companies must stay in motion in today’s world, where many sectors are changing rapidly and dynamically. Stagnation, in this context, can mean regression.

Changes in corporate culture are a logical consequence of changed conditions if a company wants to remain competitive.

Necessary adjustments to changes in corporate culture

The constantly changing influencing factors compel companies to rethink and reorganize entrenched processes and structures. These adjustments signify a change in corporate culture.

Here are two examples to illustrate what a new culture can look like:

Remote working and home offices

Before the COVID-19 pandemic, 17% of US employees worked from home 5 days or more per week; by January 2022, this number had risen to 59%.

This significant shift from onsite to remote work shows a change in employee demand and a flexible response from companies to adapt to changed conditions.

Proactively managing and evaluating these changes in the company is an important management task. Given the talent shortage and improved gender equality, companies face the challenge of keeping pace with the changed expectations of potential applicants.

The shifted expectations of potential workers

Flexible working hours, health promotion and childcare offerings are just a few examples of the heightened expectations of younger generations toward companies.

For instance, Generation Z values personal development opportunities, well-being and the right core values most.

Companies that neglect the importance of diversity and supporting social causes could find attracting the best new hires challenging.

Corporate culture: The iceberg model

The iceberg model by Edward T. Hall uses the image of an iceberg to visualize how a corporate culture’s visible and hidden parts are interconnected.

His model builds on the groundwork of Sigmund Freud and Edgar H. Schein. The small upper part of the iceberg represents the task level, showing the apparent elements of a company, such as rules and standard work practices.

The larger, hidden part below the surface contains social values, feelings, basic assumptions and needs. It is known as the relationship level.

The iceberg model clarifies that work must be done on the surface and on the organization’s values and mindsets to successfully and sustainably establish changes. Professionally conducted change management can support you in this process sustainably.

Final thoughts: Corporate culture is a success factor

Corporate culture is becoming increasingly important. Every area can benefit from a positive corporate culture, from recruiting good employees to increasing profitability.

For these reasons, it is wise for a company to focus on a positive, open culture characterized by appreciation and respect. Companies with the best culture create a workplace that attracts and retains the best talent, fostering a productive and committed workforce.

Driving business growth