Imagine not having to manage your employees in detail. That they can independently make the right decisions for the company. That they instinctively know what is the right thing to do for customers, business partners and competitors. Where your powers as a leader are used to think the big, strategic forward-looking thoughts and not to manage employees in detail and put out fires.
In companies that have a strong culture, this is actually a real possibility. Because there is agreement about what the company stands for and which values are important, employees can with relative certainty make decisions that are in line with everyone else in the company, incl. you, would have taken.
Culture includes the organization's vision, values, norms, systems, symbols, language, assumptions, beliefs/views and habits. A way of perceiving and even thinking and feeling that new members of the company learn quite quickly.
Culture is made up of many different things, e.g. your vision, values, norms and systems. But symbols, language, assumptions, beliefs/views and habits are also part of your company's culture.
The company's culture affects how you speak, think and act. Your culture affects both how you act in relation to each other internally in the organisation, but also your behavior in relation to customers, business partners and competitors.
It is not only independent employees that a strong culture brings with it. Research carried out by John P. Kotter and James Heskett from 1992 also indicates that companies with a strong culture get a far greater dividend than other companies. See the table below taken from this Article.
| Average Increase for Twelve Firms with Performance-Enhancing Cultures | Average Increase for Twenty Firms without Performance-Enhancing Cultures | |
|---|---|---|
| Revenue Growth | 682% | 166% |
| Employment Growth | 282% | 36% |
| Stock Price Growth | 901% | 74% |
| Net Income Growth | 756% | 1% |
901 % growth in the share price in companies that have a performance-enhancing culture, against 74 % growth in companies that do not. There is a noticeable difference. Also notice the difference in net income growth. 756 % vs 1 %!
What is it that separates the strong culture from the weak one? Kotter and Hesket describe it as follows:
"... a strong corporate cultures that facilitate adaptation to a changing world are associated with strong financial results" (Kotter and Heskett "The Value of Corporate Culture")
And later in the same book:
"We found that those cultures highly value employees, customers, and owners and that those cultures encourage leadership from everyone in the firm. So if customer needs change, a firm's culture almost forces people to change their practices to meet the new needs. And anyone, not just a few people, is empowered to do just that.”
So there are many benefits to be gained by working constructively with your culture. So the culture actually works WITH you and not against you.
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