"If you are lucky enough to take part in the creation of a corporate culture – do not miss your chance!"
Biography of Adlai Goldberg
Adlai Goldberg is a representative of Ernst & Young, who heads the CIS department for improving the efficiency of companies. Adlai is an American, but has been working outside the USA for more than 20 years – in Japan, Singapore, Indonesia, CIS countries. Before moving to Moscow, Adlai headed Ernst & Young's consulting services practice in Ukraine for several years. Adlay usually conducts large-scale projects, including those related to corporate culture, the development of a communication strategy, support for organizational changes that result from the optimization of business processes and organizational structures, mergers of companies and the entry of companies into the market. As part of his professional activity, Adlai has worked with companies producing consumer goods, multimedia and telecommunications companies, as well as companies operating in other industries. Now he is cooperating with our company, helping to create EPD in Russia.
In 1998, Hay Group, together with Fortune magazine, conducted a study "What distinguishes the 500 best companies in the world from the rest?" (What makes companies great?) The results showed that the key success factor is the ability of an organization to attract, develop and retain talented employees, which, in turn, is largely determined by the corporate culture. Underestimation of the human factor was among the most common causes of failures in the implementation of the chosen strategy (up to 70% of cases)…
This is confirmed by research from Harvard Business School. For more than 10 years, researchers have studied the activities of 160 companies. The results indicate that the success of the company is directly related to the corporate culture.
Research by the Corporate Leadership Council (2002) also clearly showed that the company's financial performance is influenced by corporate culture, especially its aspects such as risk-taking, active exchange of information within the organization, flexibility in decision-making, as well as innovation and focus on performance.
What is corporate culture?
Perhaps everyone has heard the phrase corporate culture. But do you really know what it is and why it is so important? Despite the fact that there are many meanings and more than 300 definitions of culture, in a broad sense, culture is understood as beliefs, values, work rules, norms and traditions shared by a group of people.
"Every organization has its own culture, because it is a group of people who interact closely with each other. And corporate culture is the manner of behavior accepted in the company. She embodies the common ideas and values of employees...". However, let's leave the scientific definition and try to explain the meaning of corporate culture in simple words.
It is important to understand that there are two sides to corporate culture: visible and invisible. Corporate identity, rules of dress, working atmosphere, staff privileges, job titles in the company and other things are just external attributes of corporate culture.
The invisible side of corporate culture has a much stronger influence. These are beliefs, values, standards, and worldviews that form the basis for actions and decision-making in a team. Symbolic examples of such a community of interests can be statements like "quality is more important than quantity", "our company takes care of its people", etc.
All this affects the existing norms of behavior in the company. They are based on a single conceptual system that defines the process of perception, understanding of events and what we pay attention to. For example, it may be accepted and considered normal in an organization that employees stay up late at work or try to respond to customer requests as quickly as possible, that management actively involves subordinates in the decision-making process, or, conversely, makes all decisions independently.
What forms the corporate culture?
Why do most of the company's employees usually begin to share common values, beliefs and norms of behavior?
A person, as you know, is shaped by the environment. Observing the behavior and work of people around him, he gradually begins to follow the same principles of behavior and value system. Culture often works on a subconscious level. A person may not fully realize how work affects his behavior, although it is often noticeable from the outside.
What factors influence the formation of an organization's culture? Among the determining factors are the industry to which the company belongs, its history, size, structure, national culture, the nature of the work performed by employees, the frequency of interaction between them, the behavior demonstrated by management, and much, much more. Given that all these factors can manifest themselves in different ways in a given situation, it is not surprising that each company has its own corporate culture, take, for example, a fast food restaurant and a banking institution - they have everything differently. Even for companies operating in the same industry and engaged in a similar type of activity (for example, competing companies), the corporate culture may differ dramatically.
According to research, job satisfaction, motivation and initiative of employees directly depends on how much their behavior conforms to the principles of corporate culture. In contrast, the inconsistency of employee behavior with corporate values leads to negative consequences, such as job dissatisfaction, high levels of tension and stress, problems finding new employees and retaining existing ones.
People tend to work in an organization whose values coincide with their ideas and beliefs. It seems to them that it is easier to build a career in such organizations. On the contrary, a person who does not share the norms of behavior and values of the company will feel like an outsider and may want to leave it.
How to create or change a corporate culture?
Let's ask ourselves: is the creation of a corporate culture a spontaneous or controlled process? Answer: corporate culture is most often created spontaneously, but this process can be influenced, the culture is amenable to change!
Why would a company want to change its corporate culture? The fact is that fundamental changes in the company's corporate culture – from a hierarchical structure to a collegial one, from an introspective one to an environment–oriented one – can help the company to increase competitiveness.
It is not easy to change the corporate culture of an organization, because, strictly speaking, it is a combination of what is common and acceptable to the collective and individual mind. Its transformation entails a change in the consciousness of employees, shareholders and customers. Changing consciousness is not an easy task, but if successful, changes in culture can help a company gain a higher status in the eyes of market participants, as well as achieve impressive financial performance and business results.
So, how to create a new corporate culture? Our experience shows that it is necessary, first of all:
Determine what the new values should be.
Explain why there was a need to change the existing order so that employees would believe in the new policy.
The leaders of the organization must demonstrate new values in their daily work.
Implement key indicators in accordance with new cultural values.
Regularly inform employees about what is happening, organize special trainings and familiarization programs that should help to root values in the minds of employees.
Changes in corporate culture begin with each person and, basically, with simple things. Let's give an example from our experience. The global consumer goods manufacturer has set itself the task of bringing ordinary employees closer to senior management. It all started with the appearance of an open door policy: it became possible to contact the management directly, without a letter or an appointment, and on Fridays all employees were allowed to dress in a free style.
In addition to such simple and obvious measures, the company should also pay attention to helping employees develop new approaches to work and interact with each other, which include regular feedback, a system of employee incentives, as well as training and mentoring. Many companies, including Ernst & Young, have a special reward system for demonstrating behavior consistent with corporate values.
Creating a new corporate culture is extremely exciting! If the case goes well, it can become the pivot that will have a significant impact on the work and behavior of employees for a very long time.
The opportunity to participate in the creation of a corporate culture is a once–in-a-lifetime chance, if at all. So don't miss this rare opportunity. It is important not to be afraid of changes, to be active, open to innovations, to be ready to learn and just enjoy the process.