Does Corporate Culture Really Matter?

Corporate culture is something that everyone seems to discuss without actually understanding fully what it is and how it can affect performance on an organization-wide basis. Yet culture is the connective tissue between mission, strategy, and execution. A healthy organizational culture can positively influence outcomes by aligning behavior and attitude with strategic goals, while one that is misaligned with those goals can reduce engagement, inhibit productivity, and even increase risky behavior. By having a clearer understanding of what your company’s culture is, you can work to improve it and, by extension, also improve your organization’s results.

Senior executives talk about three interacting levels of culture. On the surface are observable behaviors and outward manifestations, such as dress codes, technological prowess, and social attitudes. One level down are espoused values – those concepts you might read in a company mission statement, for example.

Beneath these, however, are the learned values – beliefs and assumptions that become shared and taken for granted through day-to-day interactions. Only by ensuring that these deeper, learned values match your company’s espoused values can you drive actual behavior to achieve strategic goals.

Set expectations.

The mere act of enumerating your company’s values is not sufficient to instill these values in your employees, but it is a necessary first step, says Bill Askew, a senior executive vice president and head of Service Quality at Regions Bank.

“You have to make clear what the company stands for,” he argues. “Our current go-to-market strategy, which we call Regions 360°, is specifically intended to address culture.”

Regions 360° describes the bank’s holistic approach to serving customers by fully understanding their needs and tailoring solutions to them. “It speaks to the values of listening well, and of putting the customer first,” he explains.

Align incentives and rewards.

One common stumbling block in the development of corporate culture is the way in which employees and managers are rewarded for their efforts. Such rewards include both compensation as well as promotion, recognition, hiring, and status.

“If you claim that customer needs trump product sales, but your incentive structure rewards those sales, you won’t achieve your goals,” Askew points out. Instead, reward behaviors that reflect company values.

Communicate and measure.

Because of the complexity and subtlety of corporate culture, however, simply aligning incentives is not enough to ensure that change occurs. Human behavior and attitude constitute a response to myriad cues, some obvious, many less so. For that reason, Askew argues, fostering culture means understanding how employees experience a company’s culture, and while tools such as internal surveys are extremely useful, he feels that face-to-face interaction is crucial. At the same time, he points out, the only way to take healthy culture from nice-to-have to a must-have is by measuring its real-world effect. Metrics to watch depend on goals, but may include customer retention, employee turnover, product innovation, and efficiency measures.

Culture, then, is not only real, it has a genuine impact on your company’s bottom line. And while it is, for the most part, largely internal to the organization, it nonetheless affects how your company is perceived on the outside.

“Culture is a powerful differentiator,” Askew says. “It distinguishes your company from the pack, and reinforces its brand.”


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This information is general in nature and is provided for educational purposes only. Regions makes no representations as to the accuracy, completeness, timeliness, suitability, or validity of any information presented. Information provided should not be relied on or interpreted as accounting, financial planning, investment, legal, or tax advice. Regions encourages you to consult a professional for advice applicable to your specific situation. Regions neither endorses nor guarantees any websites or companies referenced in this article that are not owned by Regions.