Analyzing Your Corporate Culture

By definition, a corporate (or organizational) culture is a system of values, beliefs and principles that determine behavioral patterns of employees (both managers and specialists) in your company. In other words, a corporate culture determine and govern how your employees think, feel and act. Including how they make and execute decisions in their responsibility areas.

As I mentioned earlier on a number of occasions, you want your company to become a powerful money-making machine operating at its maximum performance at all times. Performance measured by your fundamental performance indicators – financial value, free cash flow, ROIC, economic profit, etc.

Your employees (both managers and professionals) are the most important components of this money-making machines. And it is their decisions and actions that determine whether you achieve your strategic objectives – or not. Decisions and actions to a very significant extent influenced by your corporate culture. That can help – or hinder – achievement of your objectives.

Therefore, you have to make sure that your company has the right corporate culture. ‘Right’ in a sense that it makes your employees make the best possible decisions and execute them in the most efficient way in terms of achieving your strategic corporate objectives. Which means that your corporate culture must meet certain requirements.

First of all, you must have a detailed, comprehensive, well-structured and accurate description of your corporate culture. And remember – regardless of whether you have this description or not, your company always has the actual one. Therefore, ‘accurate’ means that your declared, written corporate culture must always match the actual one.

To maximize your corporate performance and achieve your strategic objective, you must satisfy the aggregate needs – financial, functional and emotional – as well as desires of your corporate stakeholders. In other words, to create the maximum possible amount of aggregate value for your stakeholders. In absolute terms – to the maximum possible extent – and definitely better than your competition.

Your corporate culture that determines behavioral patterns of all employees involved in this process, can help or hinder it. Therefore, you must make sure that your corporate culture is (a) geared towards maximization of aggregate value created for your stakeholders and (b) is highly competitive in this department (exhibits the highest Aggregate Competitiveness Index relative to your competition).  

Consequently, your corporate culture must match your declaration of corporate identity (of which corporate culture is actually a major part); your mission statement (if you have one); your vision statement and your corporate strategies.

Quite obviously, your corporate culture must be properly reflected in your choice of your target markets; your unique value propositions; your core competencies and competitive advantages; your brands, products and services; your corporate SRM and communication systems and in your organizational structure.

‘Going against the flow’ does not help very much to maximize your corporate performance and to achieve your strategic objectives (with the exception of some very unique circumstances). Therefore, you must make sure that your corporate culture properly matches your key external factors (especially those of social & cultural nature).

And because these factors – like the whole our fast-paced world – tend to change quickly and frequently, you must make sure that your corporate culture adapts accordingly. Which obviously requires a highly efficient monitoring and adaptation corporate process. No less obviously, this process and your whole corporate culture management system must be tightly integrated into overall strategic and operational management process.

And, last but not the least, due to abovementioned scope and importance of your corporate culture, you must make sure that you have a highly competent corporate culture management team on board.