The Importance of Corporate Culture

Corporate culture is the primary component when developing a company. Culture is “the way we do things around here.” The forgotten facet of culture are its tacit assumptions. These determine its behaviors, values, and priorities. Leaders develop the company culture whether they plan to or not.

Culture is fundamental in company development.
A great culture is a key differentiating factor in sustaining growth and maintaining shareholder value.

Corporate Culture Demonstrates Values

You’ve seen the framed images of rowing teams, soaring eagles or rock climbers. Companies hang them to convey their core values. Wall art doesn’t convey values. Companies can only show their values in the decisions that they make. In how they treat employees, suppliers, and customers.

Culture Signals Priorities

The founder/CEO wouldn’t remain founder/CEO for long if she were still making each and every decision. Culture influences the decision making of senior and middle management all the way down to the front line. This is because what’s worked for us in the past heavily influences culture.

Culture Enables Consistency

Cultures are like a flywheel or drum beat. They help everyone understand how things should be done in this organization. It provides the momentum that keeps the wheels of the company moving. This way, the founder doesn’t have to keep pushing.

Culture Influences Strategy

Management Consulting Guru, Peter Drucker is said to have coined the phrase “Culture eats strategy for breakfast.” If a company isn’t self-aware its outdated unconscious belief system can derail even the best of strategic plans. [Think Blockbuster’s failure to acquire Netflix. Think AOL not acquiring Google]. This is due to the fact that key middle managers are viewing these new strategic plans through the lenses of faulty decision logic or business rules.

Culture has a big impact on the health and performance of the company. Many CEOs see culture as their number one priority. A great corporate culture is a key factor in sustaining growth and maintaining shareholder value. The only question is whether or not the culture will be developed intentionally or not.

This post was in answer to the question in Quora: How important is company culture when developing a company?