Leadership is at the Core of Corporate Culture

 Some leaders scoff at corporate culture. Others regard it is fluff or overhead. But whether intentional or not, corporate culture exists, usually in the shape of the corporate leader. When corporate culture is healthy, it can give a company a competitive edge in the marketplace for customers and talented workers.

Some leaders scoff at corporate culture. Others regard it is fluff or overhead. But whether intentional or not, corporate culture exists, usually in the shape of the corporate leader. When corporate culture is healthy, it can give a company a competitive edge in the marketplace for customers and talented workers.

Instead of wondering whether you should have a corporate culture, you should find out what your corporate culture already is. Corporate cultures aren’t invented. They are created by everyday actions – and inactions. You have the culture, as they say, that you earn.

Interest in corporate culture has grown because more employees are interested in joining a firm with a compatible culture.  There also is data showing that companies with strong corporate cultures can outperform their “culturally unremarkable” competitors by as much as 30 percent.

A lot has been written about what makes a great corporate culture. But let’s face it, what may be a great culture in an architectural firm may be totally irrelevant in a pizza parlor. One common element of corporate culture, for better or worse, is leadership.

A flesh-and-blood leader, by his or her attitude and behavior, influences corporate culture more than any aspirational slogans posted on a wall. It is hard to have a warm and fuzzy culture with a gruff and grumpy leader.

Leaders set the tone by what they prioritize. Culture tracks priorities. You can say you value collaboration, but if you only reward individual accomplishment, the crew will get the message about what really matters.

  The Conscience of a Culture   The late Doug Babb was an architect and the conscience of CFM culture’s. In a style at once direct and subtle, Babb asked tough questions and made thoughtful suggestions. He praised CFM’s profit-sharing policy, but suggested employees would be better positioned if they had regular financial updates. We started posting them quarterly. From its outset in 1990, CFM rejected any work to promote tobacco or related products. Babb said that worked for the company, but what if a CFM staffer objected to a specific client. That resulted in a conscience-clause policy that enabled any employee to be excused, without penalty, from a client he or she found offensive or in conflict with their personal values. In conferences to develop messaging for clients, Babb could be outspoken if we drifted into puffery and away from facts we could verify. That led to a corporate policy that clients refer to as principled advocacy. Babb was exactly the kind of colleague to hear out and heed to evolve and sustain a corporate culture based on values that coworkers and clients could trust.   

The Conscience of a Culture

The late Doug Babb was an architect and the conscience of CFM culture’s. In a style at once direct and subtle, Babb asked tough questions and made thoughtful suggestions. He praised CFM’s profit-sharing policy, but suggested employees would be better positioned if they had regular financial updates. We started posting them quarterly. From its outset in 1990, CFM rejected any work to promote tobacco or related products. Babb said that worked for the company, but what if a CFM staffer objected to a specific client. That resulted in a conscience-clause policy that enabled any employee to be excused, without penalty, from a client he or she found offensive or in conflict with their personal values. In conferences to develop messaging for clients, Babb could be outspoken if we drifted into puffery and away from facts we could verify. That led to a corporate policy that clients refer to as principled advocacy. Babb was exactly the kind of colleague to hear out and heed to evolve and sustain a corporate culture based on values that coworkers and clients could trust.

 

Leaders who are terrific in some settings may bomb in others. A leader who can motivate employees to become partners in a startup may be less inspirational and effective at a later stage of company development with scaled-up operations and employment.

Some companies try to shape culture through architecture. Open atriums, coffee bars, comfy furniture and group work tables affect how and where people work, but don’t automatically translate into cultural currency.

If corporate culture is important and a potential competitive advantage, why are there so few useful tips on how to create and a sustain a desired corporate culture? Perhaps it is because corporate cultures don’t render themselves very well to formulas. They are organic and fragile. They evolve instead of being mandated. They thrive by consent, not fiat.

That is not to say that corporate cultures can’t be intentional. A hard-driving restaurant manager who takes time every day to talk to each one of his employees to find out what’s happening in their lives outside of work is creating an intentional corporate culture. If the manager shifts a schedule or gives someone a day off to deal with a family issue, he or she is defining a corporate culture as caring.

Bosses would be wise to recognize cultural leaders in their workforce, who evidence the culture they want through their actions or who articulate cultural principles in ways fellow workers can embrace.

One of the strongest ways to portray and preserve a corporate culture is through storytelling. Stories can explain how policies came into being, evolved and became bulwarks of a corporate culture. Providing a narrative creates context for a culture, especially if told by workers who were involved in the policy evolution.

If a corporate culture is in fact critical to commercial success, then companies should evaluate potential new hires to determine how well they would fit with the culture – and think of it as a marketing strategy. Someone with great credentials, but no regard for the prevailing culture could be a toxic mixture that affects more than the culture.

In the end, what cements a corporate culture are the values of its leader. Not just the values espoused, but also the values practiced. Johnson & Johnson’s fabled response to tainted Tylenol bottles demonstrates both the power of values and leadership. CEO James Burke challenged his team to frame a response that lived up to the company’s expressed value of putting patients first. That value-driven direction led to a mass recall of Tylenol, thousands of one-on-one consultations of medical professionals, transparency in media communications and, within six weeks, the pioneering introduction of a tamper-proof bottle.  The company was rewarded economically by restoration and growth of its market share and a deeply loyal customer base.

Johnson & Johnson’s 1982 Tylenol response is still regarded as the gold standard of crisis responses. It also should be viewed as an important lesson in corporate culture. A couple of decades later when Johnson & Johnson faced another crisis under different leadership, its response fell short of the gold standard set earlier, underscoring that above all else, corporate culture starts and ends with leadership.

Gary Conkling Image.jpg

Gary Conkling is principal and co-founder of CFM Strategic Communications, and he leads the firm's PR practice, specializing in crisis communications. He is a former journalist, who later worked on Capitol Hill and represented a major Oregon company. But most importantly, he’s a die-hard Ducks fan. You can reach Gary at garyc@cfmpdx.com and you can follow him on Twitter at @GaryConkling.