The Truth About Corporate Culture

Why everything from coolness to creative license comes from the top down – and why culture still eats strategy over breakfast.

Herb Kelleher, former CEO of Southwest, has said: "Given enough time and money, your competitors can duplicate almost everything you've got working for you. They can hire away some of your best people. They can reverse-engineer your processes. The only thing they can't duplicate is your culture."

From a company's perspective, strategy is what you do and how you do it. It's the physical and tangible stuff, like your products and services, as well as the factual elements, like results and data. In contrast, culture is less concrete yet more foundational; it's the basis of how your company can and will achieve its strategies.

On the outside companies have what they do; but on the inside companies have who they are.

Kelleher's point is as clear as the friendly skies are blue: Strategy will only get you so far. Culture will keep you grounded in increasingly competitive markets.

Culture Equals Cohesion

Why do certain companies, like startups, for example, feel different than well-established corporations? Does one encourage more risk-taking? Does one have more to lose? Whatever it is that makes a company embody "coolness," "creativity" or "innovation" is written into its cultural DNA. Even if you don't aim to be the coolest company on the block, two elements are integral to success:

  • Knowing who you are (establishing culture)
  • Getting everyone on board (living and breathing it)

Whether you work for a Fortune 500 company or sit side-by-side with the only other employee at your two-person agency: Culture matters. Corporate culture must be defined by leaders within the organization and then reified. Nothing will halt productivity, progress and innovation faster than a team or company that is not unified around the same goals, cultural and otherwise.

As Bill Aulet, managing director of the Martin Trust Center for MIT Entrepreneurship, wrote in his recent TechCrunch article, "Culture guides employee[s] about both technical business decisions and how they interact with others. Good culture creates an internal coherence in actions taken by a very diverse group of employees."

In other words, if all employees aren't aligned, or all top-level executives don't espouse the same core tenets, the result can be more than discord, disagreement and division: It can be lack of progress.

A Tale of Two Cultures

Trust and empowerment are integral elements of a successful corporate culture, regardless of how else it is defined. Take, for example, a recent experience I had with a retailer I will call Company M. I ordered a product from said company. When it arrived, it was different than it usually is (a little background: I've been a customer for a few years, so I know the product well). After two failed email attempts (no one replied) and two disappointing phone conversations, I was frustrated less with the product and more with the level of customer service I was getting.

One more phone call later, and I realized the problem: The reason no service representative or supervisor could help me replace one incorrect product with another wasn't because they didn't want to, but because they weren't empowered to do what made sense.

Rules tend to get in the way of logic when corporate culture, from the very top down, doesn't empower employees to think on their own, but rather forces them to think in terms of to-dos, must-haves and what's-been-done-befores.

On the other customer service extreme, there is Company N. Company N is famous for once giving cash back for a product returned without a receipt that the company has never carried. Ask anyone who's ever shopped there, and you'll get a plethora of similar anecdotes. (I have two that I commonly reference.) Company N is also famous for its one-sentence employee guidebook: "Use good judgment in all situations."

Breakfast Club

So when Peter Drucker said to Ford Motor Company President Mark Fields that "culture eats strategy over breakfast," he was absolutely right. Your goal might be to sell more products than your competitors. To do so, your strategy might be to build the best products in the market. But if your culture doesn't satisfy your employees – whether by empowering them to make decisions or giving them license to fail – they won't be the only ones left with a bad taste in their mouth.

Corporate Culture Shock

As a creative thinker and doer, you want to work for a company that fits your values as well as your career goals. But the shocking truth is, you may not be able to affect the culture in your workplace – at least not alone. The fact is culture comes from above and it can be near impossible to achieve the same ends if you're not aligned.

One thing you can do, however, is be aware of what's important to you. For example, you may prefer a corporate culture that is proactive and direct rather than passive. Or perhaps you're after one that's empowering, not over-regulated; one that values efficiency, not hierarchy; or one that promotes productivity, not process. Whatever you're seeking in a company, don't overlook the importance of corporate culture. In the end, the right fit is better than trying to fit in.

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