Article of the week 52 – 2023

The delicate plant corporate culture

Peter F. Drucker (economist and author) once said: „Culture eats strategy for breakfast.“ No matter how clever and brilliant a strategy is, it will fail if it is not supported by corporate culture. Sounds plausible? Yes. Is it important? Absolutely! Corporate culture is the basis for a company’s success. Without a good corporate culture as a supporting foundation, set targets are simply more difficult to achieve.

An international study conducted by Heidrick & Struggles in 2021, in which 500 board members, including from 50 German companies, were surveyed, shows that companies that focus on corporate culture achieve twice as much growth as those that do not prioritise this topic.

However, it also became clear in this survey that as most important drivers for the financial success of the company were mostly named strategy, leadership and processes/rules (and not corporate culture). Many companies seem to be aware of the issue of corporate culture, but it is not prioritised.

The „problem“ is that it is not really tangible. Corporate culture has no price tag, nor can it be measured using a hard metric. It’s even more difficult, especially in performance and KPI-driven customer service business, because you can’t track it on a dashboard and actively intervene if things get out of hand. In addition, every customer service organisation is nearly always confronted with constantly growing customer requirements and rapid changes in the market that set the tone in the industry. Higher, faster, further is often the motto. Who still has time for culture?

But what does corporate culture actually mean, where can I find it and how does it need to look like to make my organisation more successful?

One thing can and has to be said in advance: There is not THAT ONE corporate culture that will bring success. Corporate culture simply happens. And it happens wherever people come together and interact. It is simply there. It doesn’t matter whether it’s in a young start-up, a medium-sized company or a large, traditional family business. Corporate culture grows like a plant. And just as simple as in the world of plants, it is with corporate culture. If I neglect or ignore it, it withers, becomes weak and no longer looks pretty.

And so while we simply dispose of the stunted plant, we need to take a closer look at the organisation to find out why things are going the way they are.

The well-known iceberg model is a good way of visualising a corporate culture:

While the visible part of the culture forms the factual level with, for example, communicated targets, the much larger and invisible part represents the relationship level. The relationship level drives the organisation like an engine and, if the culture is ailing, can cause even the most sophisticated strategies and targets to fail. Once the relationship level is on your own „radar“, it can provide valuable insights into the organisation and the need for action. If I completely disregard this level, I may also achieve my targets, but I need to be aware of possible consequences.

The factors for a negative corporate culture are manifold, be it a lack of transparency and communication, a lack of appreciation or inappropriate leadership. This usually manifests itself in dissatisfaction, low motivation and a lack of identification with the company among employees. However, customers also often sense that things are not running smoothly in a company and may express this in the next satisfaction survey.

As the person responsible for customer service, you could see it as the duty of the company, the management or the board to take the development of the corporate culture into their own hands. However, what has been described applies on a large scale just as much as on a small scale – throughout the company as well as in individual departments, including customer service. And perhaps especially there, because customer service is often one of the areas in the company with the largest number of employees, and therefore also the largest area of impact for cultural issues.

What is your corporate and department culture like? Why not take an explicit look at this success factor the next time you survey your employees?

Melanie Harth – Consultant


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