10 Core Principles of Corporate Culture (with Real-life Examples)
Have you ever heard someone say, “We need to change our corporate culture”?
Usually, it comes from new company leadership or a management consultant or guru. They feel to make the company “world-class,” it needs an urgent overhaul of its culture, which will stop the negativity and boost morale, among other improvements.
Now, how many times have you seen corporate culture change as a result?
A company can rarely change the way people behave and the way they get the work done, and it’s even rarer to make improvements in the long-term. But that’s what you need if you want to change your culture.
Before we continue… what is corporate culture? How can you define it? Your company’s culture is its basic personality; it’s how employees behave as they work and interact.
Changing your own personality is a complex ordeal at best. Now imagine trying to change ingrained behavior over hundreds or thousands of employees.
It’s not something that can be done overnight, but your corporate culture can be changed, gradually and with the right strategies or principles.
Here are 10 core principles—and some real-life examples—of corporate culture that will help you affect long-lasting, positive change.
1. Start with one or two behaviors
You can’t change everything at once.
What’s most critical right now to your company’s operations? What change would have the greatest impact? Make sure to select critical behaviors that you want to align with your company’s strategies.
Next, determine something positive that employees do that affects your company’s business. For example, their interactions with customers when delivering service. Then find those employees who enjoy doing it and come up with a plan on how to implement and spread the new behavior.
A financial institution found it had substantial differences between its branches in how work was done. To gain the advantage of synergies, the leadership team focused on three key behaviors: delighting customers, backing each other up, and valuing performance instead of seniority. Then senior leaders emulated these behaviors and rewarded employees for their extraordinary efforts to emulate as well.
2. Show results quickly
You hear often that people today have incredibly short attention spans. When your employees hear about a new company initiative but don’t see any results related to them, they lose interest or disengage.
The key is to showcase results as quickly as possible; show employees the impact of your corporate culture on business results in real-time.
An effective way to show all results is through a pilot program.
One telecommunications company wanted to improve customer service, and consequently profitability. The skeptics, however, felt there simply could not be proof enough to warrant changing the entire company’s tactics on the front line.
So management set up a pilot sales unit in a separate location and set aside eight months to prove the cynics wrong. The team set up logical ways to measure employees’ behavior change, customers’ reactions, and how that affected actual sales and their profit margin.
After a 29% increase in customer satisfaction and a 31% increase in revenue for that single pilot unit, the company rolled out the new initiatives to the rest of the front line.
Bonus Tip: Do you know the main differences between metrics and KPIs?
3. Use what you can of your current culture
It’s highly unlikely that you can swap out your current corporate culture and replace it with a new one like you would a light bulb.
Instead, start by making smaller changes to components of it. You might find parts of your culture advantageous on which you can build. No culture is all bad, just as no single culture is perfect. But by identifying the traits that consistently work well, you can identify others that either help or hinder your company’s culture.
One real-life example is a pharmaceutical company that tended to focus inwards than outwards. When it came time to launch a product, the inward focus helped them execute exceptionally well. However, it hindered their go-to-market strategy. The employees tended to value their colleagues’ opinions more than outside experts.
Instead of trying to replace that part of their corporate culture, leadership decided to use it to their advantage. They started an award program where employees nominated each other for “going the extra mile” to support their customers. The program relied on the employees’ powerful connection to each other to create a new behavior in its sales force.
4. Take advantage of natural leaders
Leadership isn’t restricted to those in authority. Find your company’s natural leaders to help you drive your corporate culture. These natural leaders can show or influence others by behaving according to your company’s goals and culture.
Every company has that one person who seems to know everyone and how everything works. They know everyone’s function and how the place really works. These natural leaders can connect people, collaborate well with others, and if they don’t have the answer to your question, can find the one who does.
For example, one company identified its natural leaders, not those in authority, and instituted a buddy program between different departments. Not only did they increase collaboration across teams, but they were able to harness different talents and transform the way they did business.
5. Work on behaviors first and mindsets will follow
Neuroscience research shows that people can act their way into believing, thus changing their mindset. You can’t change your employees’ mindsets with new company values printed up and emailed out to everyone.
One stark example of trying to change a corporate mindset instead of paying attention to behavior is Enron. You may remember the accounting fraud and scandal, behaviors that ended the company, even though the company’s supposed values of respect, integrity, excellence, and communication were carved into the marble in its headquarters.
Rather, start with key behaviors that are tangible and that you can observe, measure, and repeat.
For example, consider empowering your employees to make certain decisions for clients without having to escalate up the management chain.
Make it easy for employees to collaborate and work on joint projects while offering them a respectful way to solve their disputes.
If you’re trying to make your workplace safer, installing signs and/or threatening workers with consequences, will not move the needle. Instead, plan something as simple as a litter drive. The team that collects the most litter and has the cleanest workspace wins a pizza party or something else of value. Getting workers to take pride in their surroundings can make them notice unsafe situations easier.
6. Never stop managing your corporate culture
Some companies know how to manage their corporate cultures. They realize they have the greatest success when they consistently monitor, manage, and report on their cultural initiatives. When you align your corporate culture with your company’s strategies, initiatives, and goals, you can accelerate change.
Just because you have a great corporate culture today doesn’t mean it will work tomorrow.
One major airline is well known for managing its culture over time. Their employees have a deep sense of pride and ownership because they know the company puts them first—even above the owners. This creates an emotional commitment to the company, which results in excellent customer service.
But this doesn’t mean they rest on their laurels. They continually manage, monitor, and tweak their behaviors to create the corporate culture they want.
7. Affect change horizontally across departments
Change doesn’t necessarily only flow from the top down or the bottom up. It can go viral across departments when your company’s natural leaders start talking about it and selling it to others.
People are more receptive to change when they hear about it from a peer, associates, or friends. This is called social proof, and it’s how information spreads virally across social media platforms.
One company made behavior go viral across various departments by selecting a group of about 12 natural leaders from three or four different areas in the business. After a couple of weeks, those informal leaders chose additional leaders from every business unit in the company.
As the months went by, the existing groups expanded and brought in new people, and they eventually found themselves operating autonomously and sharing learning and insights. They could spread behavior change amongst themselves.
8. Align current programs with behaviors
In the previous principle, you saw how behavior can go viral across departments. You want to avoid your new behaviors working at cross-purposes from your common formal company initiatives. Use your current programs as structures to enable new behaviors to function at peak performance.
The US armed services is great at providing structure for behaviors. The “rule of three” guides Marines’ hierarchy.
For example, three squads make up one of three divisions, and each division forms one of three battalions. Squad leaders know exactly what leaders above him will do in any situation. They are expected to call out anything they believe conflicts with what leadership wants.
Informal leaders in each squad are prepared to step into the leadership role if their leader is disabled. This means informal leaders also have to know the intentions of leaders above. This formal structure enables adjustments in mid-stream that make a difference on the battlefield.
9. Make your formal leaders toe the line
If employees see your management team disconnected from the corporate culture in any way, you can’t expect change. Hold your management team to your desired corporate culture. Make sure your employees see management functioning as a team instead of disconnected units functioning separately.
At one of the big American motor companies, the CEO was frustrated by his leadership team of 15 individuals who functioned in silos instead of working together. So, he instituted small teams of three or four leaders and charged them with solving cross-departmental issues.
He would mix the teams around so that everyone got used to collaborating with each other. These executives developed an emotional commitment to each other and the business.
Not only did it improve their effectiveness as a group, but their employees took notice and responded as well.
10. Tie behaviors to corporate goals
A strong corporate culture comprises feelings, motives, and values, which are fairly abstract elements. Sometimes, employees walk away from a company-wide meeting about these principles without knowing how to translate that into the work they do.
The key is to choose tangible, clear examples of how these ideas affect the work they do and how it directly relates to corporate goals.
For example, show how cultural change leads to improvements in performance and better financial outcomes. To follow through, you’ll want to measure the change over time to show employees tangible results.
Here’s an example: a manufacturing company wanted to reduce maintenance costs. So, one of the company’s natural leaders put a price tag on every piece of equipment in the facility. Now, when machines break down, the employees have to consider the price of replacing the equipment or repairing it.
More often than not, they fix the expensive equipment instead of replacing it. The result is the company celebrated and publicized cost savings led by employees. In other words, the employees can take full ownership of the cost savings.
When you use these principles to shape your company’s culture, you tap into a powerful source of motivation and emotion that affects change. Just like with all your company’s resources, to get the most value, you manage, monitor, and test your corporate culture, constantly pivoting to meet new demands and challenges.
Compare corporate culture to the natural force of water. When you see a stream flowing, you don’t think about the force behind it that can alter the land around the stream. You’re too focused on the melody of rippling water to notice the immense power changing the geography.
If you respect the powerful source of your corporate culture, and you work with it and tap into its momentum, you can change the topography of your company.