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Company Culture- Why it matters

Many organizations have statements of missions, visions, and values. Unfortunately, many of them sound alike. Who could quibble with the importance of “respect” or “customer focus”? Value statements can seem like passive decoration for walls and the Web, oftentimes, easily ignored. While the words are intended to be meaningful and have impact, they don’t really tell anyone what to do in any specific sense.

But that doesn’t mean that values don’t matter. In all organizations, no matter the size- companies that are innovative, profitable, and responsible — got this way because they continue to promote widespread dialogue about the interpretation and application of values and enhancing accountability, collaboration, and initiative. There have been numerous studies that clearly show: Companies who focus on culture outperform those who don’t.

Here are ten essential ingredients that make values work to produce organizational value and enhanced company culture.

  1. Values are a priority for leaders, invoked often in their messages and on the agenda for management discussions.
  2. The entire work force can enter the conversation; employees are invited to discuss or interpret values and principles in conjunction with their peers, who all collectively help ensure alignment.
  3. Principles are made explicit, transmitted in writing in many media, and reviewed regularly to make sure people understand and remember them.
  4. Statements about values and principles invoke a higher purpose, a purpose beyond current tasks that indicates service to society. This purpose can become part of the company’s brand and a source of competitive differentiation.
  5. The words become a basis for on-going dialogue that guides debate when there is controversy or initial disagreement. Decisions are supported by reference to particular values or principles.
  6. Principles guide choices, in terms of business opportunities to pursue or reject, or in terms of investments with a longer time horizon that might seem uneconomic today.
  7. As they become internalized by employees, values and principles can substitute for more impersonal or coercive rules. They can serve as a control system against violations, excesses, or veering off course.
  8. Actions reflecting values and principles — especially difficult choices — become the basis for iconic stories that are easy to remember and retell, reinforcing to employees and the world what the Company stands for.
  9. Values are aspirational, signaling long-term intentions that guide thinking about the future.
  10. Principles, purpose, and values are discussed with suppliers, distributors, and other business partners, to promote consistent high standards everywhere.

In short, it’s not the words that make a difference; it’s the conversation. Frequent discussion about organizational values can be engaging and empowering. The organization becomes a community united by shared purpose, which reinforces teamwork and collaboration. People can be more readily relied on to do the right thing, and to guide their colleagues to do the same, once they buy into and internalize core principles. People can become more aware of the drivers and impact of their behavior. And, as I have seen in leading companies, active consideration of core values and purpose can unlock creative potential.


reprinted in part from Harvard Business Review

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