Business Culture: enabler of failure or success
Carillion in administration; Capita wiping over £1Bn off its market value with a profit warning; the BBC struggling to address its gender pay gap; and the President’s Club closing its doors to its all-male business leader clientele.
All a failure of culture? Business culture is certainly front page news. The focus on transparency, fairness, trust, equality, opportunity and sustainability has been heightened because of such high profile failures. Combined with the 'always on' accessibility of today’s leaders, executives have to not only avoid the corrosive cultural practices that could threaten their corporate brand but must also demonstrate their vision for a successful operating culture that accelerates tomorrow’s performance. For every example of failure, a Google, Tesla or Netflix is championed for its cultural innovation. As chair of the Business Culture Awards' judges I see brilliant work on organisational purpose, strategy, capability, customer focus and colleague behaviour (among others), building high-engagement and high-performance organisations.
I believe that business culture is fundamental to creating a successful, distinctive UK economy. With UK unemployment at its lowest since 1975, it is evidently challenging for all our organisations to acquire and then successfully develop, progress and retain the talented individuals on whom our businesses’ future performance is dependent. What sets organisations apart, however, is not solely the quality of their product or services, but the strength and resilience of their business culture. “How we do things around here” uniquely marks out our businesses from their competition. It is assessed and acted on by customers, partners, investors, governance providers and present and potential employees. Just look at the reaction of all these stakeholders to the video of United Airlines forcibly removing a passenger due to overbooking – a $1.4Bn loss in market value.
Executives have to not only avoid the corrosive cultural practices that could threaten their corporate brand but also demonstrate their vision for a successful operating culture that accelerates tomorrow’s performance
Creating a compelling, high-performance culture provides a reputational halo that translates into commercial advantage. Culture was praised as the reason for Tesla’s technical progress, Spotify’s team innovation and Dyson’s product development. By developing innovative culture initiatives, businesses can directly enhance the alignment and loyalty of all their stakeholders.
Exceptional culture is purposefully built, developed by inspirational leaders and maintained by passionate, engaged employees. Alex Edmans’ London Business School research on the Fortune Best Companies to Work For showed these businesses beating the market by 2-3% per year over a 26-year period (1984-2009). Great cultures, sustained businesses success.
In the words of Peter Drucker, “Culture eats strategy for breakfast.” It’s time for us to get serious about culture in our organisations, address cultural corrosion and be proud of those organisations who are building success based on an enabling and sustaining business culture.
ThePeopleSpace is media partner for the 2018 Business Culture Awards. For more information and to enter please visit www.businesscultureawards.com