“If you are lucky enough to take part in creating a corporate culture, don’t miss your chance!”
Biography of Adlai Goldberg
Adlai Goldberg is a representative of Ernst & Young, heading the company's efficiency improvement department in the CIS. Adlai is American, but for more than 20 years he has been working outside the United States - in Japan, Singapore, Indonesia, and CIS countries. Before moving to Moscow, Adlai headed Ernst & Young's consulting services practice in Ukraine for several years. Adlai typically leads large-scale projects, including those related to corporate culture, development of communication strategy, support of organizational changes that result from the optimization of business processes and organizational structures, mergers and entry of companies into the market. In his professional career, Adlai has worked with consumer products companies, multimedia and telecommunications companies, and companies in other industries. Now he is collaborating with our company, helping to create EPD in Russia.
In 1998, Hay Group collaborated with Fortune magazine to conduct a study, “What Sets the World's 500 Best Companies Apart from the Rest?” (What makes companies great?) The results showed that a key success factor is the organization’s ability to attract, develop and retain talented employees, which, in turn, is largely determined by corporate culture. Underestimation of the human factor turned out to be among the most common reasons for failures in the implementation of the chosen strategy (up to 70% of cases)…
This is confirmed by research from Harvard Business School. For more than 10 years, researchers studied the activities of 160 companies. The results indicate that a company's success is directly related to its corporate culture.
Research by the Corporate Leadership Council (2002) also demonstrated that a company's financial performance is influenced by corporate culture, particularly risk-taking, active communication within the organization, flexibility in decision-making, as well as innovation and a focus on performance.
What is corporate culture?
Perhaps everyone has heard the phrase corporate culture. But do you really know what it is and why it is so important? Although there are many meanings and over 300 definitions of culture, culture is broadly defined as the beliefs, values, practices, norms, and traditions shared by a group of people.
“Any organization has its own culture because it is a group of people interacting closely with each other. And corporate culture is the manner of behavior adopted in a company. It represents the shared visions and values of the employees...” However, let's leave the scientific definition behind and try to explain the meaning of corporate culture in simple words.
It is important to understand that corporate culture has two sides: visible and invisible. Corporate style, clothing rules, work atmosphere, staff privileges, job titles in the company and other things are only external attributes of corporate culture.
The invisible side of corporate culture has a much stronger influence. These are beliefs, values, standards, worldviews, which represent the basis for taking actions and making decisions in a team. Symbolic examples of such a community of interests can be statements such as “quality is more important than quantity”, “our company cares about its people”, etc.
All this affects the existing norms of behavior in the company. They are based on a single conceptual system that determines the process of perception, understanding of events and what we pay attention to. For example, it may be accepted and considered normal in an organization that employees stay late at work or try to respond to customer requests as quickly as possible, that management actively involves subordinates in the decision-making process, or, conversely, makes all decisions independently.
What shapes corporate culture?
Why do most company employees usually begin to share common values, ideas and norms of behavior?
As we know, a person is shaped by his environment. Observing the behavior and work of people around him, he gradually begins to follow the same principles of behavior and value system. Culture often works on a subconscious level. A person himself may not be fully aware of how work influences his behavior, although this is often noticeable from the outside.
What factors influence the formation of an organization's culture? Determining factors include the industry to which the company belongs, its history, size, structure, national culture, the nature of the work that employees do, the frequency of interaction between them, the behavior exhibited by management, and much, much more. Given that all these factors can manifest themselves differently in any given situation, it is not surprising that each company has its own corporate culture; take, for example, a fast food restaurant and a banking institution - they have everything differently. Even companies operating in the same industry and engaged in similar activities (for example, competing companies) can have very different corporate cultures.
According to research, job satisfaction, motivation and initiative of employees directly depend on the extent to which their behavior corresponds to the principles of corporate culture. In contrast, inconsistency between employee behavior and corporate values leads to negative consequences, such as job dissatisfaction, high levels of tension and stress, problems with finding new employees and retaining existing ones.
People strive to work in an organization whose values coincide with their ideas and beliefs. It seems to them that it is easier to build a career in such organizations. On the contrary, a person who does not share the company's norms and values will feel like an outsider and may want to leave it.
How to create or change corporate culture?
Let's ask ourselves: is the creation of a corporate culture a spontaneous or controlled process? Answer: corporate culture is most often created spontaneously, but this process can be influenced; culture can be changed!
Why might a company want to change its corporate culture? The fact is that fundamental changes in a company's corporate culture - from a hierarchical structure to a collegial one, from an introspective to an externally oriented one - can help a company increase its competitiveness.
Changing the corporate culture of an organization is not easy because it is, strictly speaking, a collection of what is common and acceptable to the collective and individual minds. Its transformation entails a change in the consciousness of employees, shareholders and clients. Changing mindsets is not an easy task, but if successful, cultural changes can help a company achieve higher status in the eyes of market participants and achieve impressive financial performance and business results.
So how do you create a new company culture? Our experience shows that it is necessary, first of all:
- Determine what the new values should be.
- Explain why it was necessary to change the existing policy so that employees believe in the new policy.
- Organizational leaders must demonstrate new values in their daily work.
- Introduce key indicators in accordance with new cultural values.
- Regularly inform employees about what is happening, organize special trainings and introductory programs that should help to root values in the minds of employees.
Changes in corporate culture start with each individual and, mostly, with simple things. Let's give an example from our experience. The global consumer goods manufacturer has set itself the goal of bringing front-line employees closer to senior management. It all started with the advent of an open door policy: it became possible to contact management directly, without a letter or an appointment, and on Fridays all employees were allowed to dress casually.
In addition to such simple and obvious measures, a company should also pay attention to helping employees develop new ways of working and interacting with each other, which include regular feedback, employee reward systems, and training and mentoring. Many companies, including Ernst & Young, have a special reward system for demonstrating behavior consistent with corporate values.
Creating a new corporate culture is extremely exciting! If the business goes well, it can become the core that will have a significant influence on the work and behavior of employees for a very long time.
The opportunity to participate in creating a company culture is a once-in-a-lifetime opportunity, if ever. So don't miss this rare opportunity. It is important not to be afraid of change, to be active, open to innovation, to be ready to learn and just enjoy the process.
According to the Abbott corporate magazine