It’s hard to believe that the term “corporate culture” didn’t emerge on the business landscape in a meaningful way until the early 1980s. It was followed shortly after by “organizational culture”. Regardless of which term you use, the two are still relatively new expressions in the world of business. While organizational culture may seem like a newborn to the business world, trends are already developing. Some trends, like CEO awareness of the impact of culture on business results, are good news. Others, like public demonstrations of misalignment between brand and culture, are not so good. Either way, business trends provide insight and inform our decision making. They help us grow our businesses and remain competitive.
Four top business trends:
1. CEOs are starting to get it
CEO’s are starting to get the business case for a strong, positive culture. Organizational culture is no longer a fuzzy, intangible concept from another universe. The Katzenback Center at Booz & Company surveyed 2,219 executives to better understand current perceptions of culture.
Key findings include:
- 86% of C-suite respondents believe their organization’s culture is critical to business success
- 60% said culture is more important than the company’s strategy or operating model
- 96% said some form of culture change is needed within their organization
- 45% do not think their culture is being effectively managed.
The issue CEOs are now facing is the challenge of how to manage culture. The opportunity exists to stop promoting the business case and start educating CEOs on the assessments, tools and processes available to help define, promote, evolve and monitor organizational culture.
2. Culture fit is becoming a major recruitment factor
Whether you’re doing the recruiting or you’re applying for a position, culture is a hot topic at either end. Employees are tired of working in environments of high stress. High stress comes when employees find themselves in jobs where the values of the organization are not aligned with their own personal values. The classic case of round pegs in square holes. And organizations are seeking good cultural fit in order to maximize productivity and minimize turnover.
In Milewalk’s 2014 Annual Employee Survey, respondents were asked to identify the top 10 elements that they consider when looking to change jobs. While compensation and benefits still rate as number one, culture was a close second.
Company websites are now advertising their values and promoting their culture. Recruiters are going beyond competencies and skills assessments by including questions to elicit information about a candidate’s motivation. Candidates are observing the organization’s environment to get clues about the culture. They’re checking out future employers on-line to see what others have to say about the organization’s culture.
Culture fit is critical for business success. Zappo’s has had their Offer program in place for years; where employees are offered up to one month’s salary to voluntarily leave if they are unhappy. Amazon just launched their annual Paid to Quit program. This trend of culture fit is making everyone think about what get’s them up in the morning, energized and enthusiastic about their work day.
3. Brand and culture alignments are going viral
In 2009, musician Dave Carroll flew United Airlines from Halifax to Chicago en route to a concert tour in Nebraska. While in Chicago, passengers observed United baggage handlers tossing and breaking guitars on the tarmac. When Dave arrived in Nebraska, he confirmed that his $3,500 Taylor guitar had, in fact, been broken into pieces. At the time, United had a brand promise of “come fly the friendly skies” and yet they were anything but friendly when Dave approached them for a reimbursement for the broken guitar. He was met with indifferent employees, a lack of accountability, and a corporate culture focussed on saving every penny.
After nine months of excuses, Dave Carroll penned a song and created a video about his experience. The video went viral, and today has almost 14 million views. Dave’s song made him a media darling with interviews on CNN and Oprah. The UK Daily Mail claims that all this attention drove United’s stock down 10% and cost the airline $180 million in shareholder value. United’s organizational culture, focussed exclusively on the bottom line, was totally misaligned with their promise to customers.
Meanwhile, in 1971, Southwest Airlines was started with one simple notion: “If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline.” Similar to United they also have a focus on cost structure. However, they have found ways to manage their bottom line through innovation and synergies. For example, they were the first to eliminate paper tickets, and the only carrier to fly one type of plane, reducing maintenance complexities.
Southwest also puts a huge emphasis on the customer experience aspect of their culture. In contrast to United, viral videos of Southwest only enhance its relationship with customers.
Flight attendants have been captured rapping to customers, delivering hilarious safety instructions and dimming lights to offer a toast to a newly engaged couple. This story is not only about wonderful customer experiences, it’s also about a growing a profitable business as a result of brand and culture alignment.
It’s not enough today to focus on your organization’s brand in isolation. You need to have the culture in place to support it and make it an authentic customer promise.
4. The scariest trend of all
Okay, so maybe this one isn’t quite a trend yet, but look out. According to the Financial Times, the Chartered Institute of Internal Auditors in the UK is recommending that an organization’s Board of Directors must define the culture required for success and put in place polices and systems to monitor the organization’s culture. This call is in response to the lack of accountability in the banking industry during the recent financial melt downs.
If CEOs aren’t already motivated to manage the culture of their organizations, this move will most certainly make it a priority, at least in the UK. Could it be that we are heading down a path of compulsory culture checks?
What these trends are telling us is that now more than ever, it is time to start focussing on the cultural frontier. Organizational culture can either be your greatest asset or your greatest liability. Yes, as leaders, we owe our shareholders and business owners a profitable bottom line; however we also owe our employees the best possible workplaces. Pushing for the right culture for today and evolving as we grow into tomorrow, is an obligation I believe we should all own. It doesn’t matter where we are in the organization — we can make an impact on culture.