The Impact of Corporate Culture on Business Performance
Corporate culture is the character and personality of your organization. It is also the â€śsummaryâ€ť of a companyâ€™s values, traditions, interactions, behaviors and attitudes.
Additionally, generally speaking, corporate culture needs to be unique. This is exactly why you need to put thought and energy into yours and exactly how it should drive, lead, and focus your organization. Furthermore, it needs to compliment your business and employees. Created wisely, your corporate culture can be a very positive impact to â€“ and within â€“ your organization.Â
The Focus of Corporate CultureÂ
As previously mentioned, your corporate culture should reflect what your employees already do and believe. This is why it is so important for each employee to â€śbuy inâ€ť to the development and enactment of both its creation and implementation. This also helps to focus the staff amongst themselves, giving a unified impression to vendors, clients, and partners. Being unified as an organization improves the chances that a strategy will succeed.Â
3 Ways a Healthy Corporate Culture Impacts Business Performance
- Productivity Rises
People work more exceptionally when they feel a positive relationship with their workplace. When they truly feel that positive relationship, they will do their best work. They are also more likely to trust in your organization. Trust is key in any happy relationship. Happy relationships also translate to more productivity. Research shows that a happy employee is 12% more productive. On the other hand, unhappy employees are 10% less productive. Just rememberâ€¦ corporate culture doesnâ€™t have an immediate impact; itâ€™s a process that takes time.Â
- Business Goals Are SupportedÂ
A strong corporate culture, wisely developed, can help your business or organization avoid mistakes in a way that other executive actions, formal institutions, and corporate assets cannot.
Some experts even say that corporate culture has a larger impact on a businessâ€™ success than strategy. A company will be more of a success with a strong culture and a weak strategy, rather than a weak culture and a strong strategy. The reasoning behind this belief is that if you have a strong culture, it will keep everyone on the same page together, no matter how imperfect the strategy is. When everyone is on the same page and on track, you are one step closer to accomplishing your company goals.
- Business Performance is Improved
Employees who live by an organizationâ€™s corporate culture are proven to outwork those who donâ€™t. Strong corporate cultures that are adaptive to a changing environment are affiliated with an increase in financial results.
â€śOver half of senior executives believe that corporate cultures is a top-three driver firm value and 92% believe that improving their culture would increase their firmâ€™s value. Surprisingly, only 16% believe their culture is where it should be.â€ť (http://www.nber.org/papers/w23255)
With this being said, you can likely see how important it is to have a strong culture. If you already have a solid corporate culture, but youâ€™re not getting the results youâ€™d like, it is easier than you think to change your culture to better your business or organization.
A corporate culture should never be created in isolation or withheld from employees because that can cause distrust amongst your staff. Allowing that mistrust into the atmosphere of your culture also makes it more difficult to execute employee retention plans. This is because they will tend to not believe what the company tells them.
Do yourself a favor and create your corporate culture deliberately and with transparency. Your employees â€“ and your business or organization â€“ will thank you for it.