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How Do You Build A Great Corporate Culture?

I have been trying to find the exact quote but not had success. Peter Drucker, the renowned 20th century management consultant and management author is said to have said “Culture eats strategy for breakfast.”

Despite not being able to find the exact citation, the phrase certainly paraphrases much of Peter Drucker’s work.

So what is corporate culture, and why is it so kick-ass?

In my view, corporate culture embodies in its people, what an organisation stands for, the “how we do things around here.” It derives from the experience of people who work in the organisation and how they make this the norm of the workplace, and what makes that organisation compelling and unique. As more and more influencers share in that experience, they organically create a set of core values – whether encouraged by management or not – and these core values convert into the way people behave. In turn the way people behave translates into how they interact with each other, and with people outside the organisation.

A solid corporate culture has been shown to get you through troubled times more reliably than a great strategy. An organisation can implement a great strategy, but that is about process. What makes an organisation implement that strategy, in a way that works, are the norms and behaviours used day to day by the people. To put it simply, strategy works from the mind, culture is the emotional and automatic response that triggers the mind to work. Employees and customers may understand a strategy being implemented, but they are loyal to a great culture.

Sometimes, strategy that changes the culture can destroy a company. Take the example of an electronic retailer that started as a small number of stores staffed by geeky guys with a passion for electronics. As the business grows this would have translated into a corporate culture of passionate customer service and face to face problem solving. If strategy was created to save cost and move towards self-service and online sales – this strategy cuts across the corporate culture that made customers loyal and passionate fans.

How can you recognise great corporate culture?

Corporate culture is shaped by what the organisation’s focus is on, and what it rewards and reinforces. Words are not good enough – it must be about reinforced behaviour and action. Culture is about working together towards a common goal and direction.

Organisations with a strong corporate culture will show signs that feedback is received positively and that it can help the company to grow.

Strong corporate culture is often seen in the way organisations talk about it to new recruits and use it to set clear expectations of performance and behaviour.

Finally, how can any organisation create a great corporate culture?

Ultimately, it starts with leadership. The organisation’s leaders lead the way by walking the talk. This is backed up by measurement and reward systems that reinforce the appropriate behaviour. Leadership showing the way is backed up by formal setting of the vision and core values. Obviously these have to be truthful because one whiff of hypocrisy and the trust is gone.

The organisation’s fundamental philosophy embodied in its vision, mission and purpose statements start to define the norms in the organisation as well as people’s roles and what is expected. Rather than being a piece of paper, the values espoused are built into policies, protocols and procedures so that the formal structure of work reinforces the idea of “norms”.

Physically, more and more organisations are using physical surroundings to reinforce the type of culture they want to establish. Silicon Valley is a good example with the use of play rooms, breakout spaces and “playful” workplaces that set up cutting-edge, creative and outcome driven cultures.

Indeed, set up right and allowed to evolve truthfully and organically, corporate culture makes your team push through walls, while a good strategy simply makes them think that they might.

So if Peter Drucker did say it, then he was right: “Culture eats strategy for breakfast.”

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