Culture eats strategy for breakfast.
–Peter Drucker
This is one of the coolest quotes in business history. I’ll go a step further – corporate culture totally defines an organization and everything it stands for. Culture determines the success or failure of a business.
But what is corporate culture? And just to stir things up even more, what are values? These are terms that are thrown around a lot, to the point where they are almost cliches – at the very least, they are generalities. And like all generalities, culture, and values can mean a million different things to a million different people. Sure, we all have some general idea of what is meant by culture and values. However, if corporate culture – and values – is so important, shouldn’t we have a much more precise and complete definition? Taking the best elements of all my research, business ownership experience, articles, courses, and videos studied and adding a few items of my own, let me offer this definition:
Corporate culture is the combined sum of the core philosophy, purpose, attitudes, principles and set of beliefs of (1) what the organization stands for, (2) what it intends to accomplish, and (3) how it is operated, structured and managed.
Corporate culture is set primarily by the leaders of the organization. Culture defines the very nature, character, intentions, actions and behavior of the organization as a whole and greatly influences how individual team members operate and interact.
Those core beliefs, philosophy, purpose, attitudes, and principles (i) determine how the organization’s people are chosen, developed and managed, (ii) drive how business is done, (iii) decide the standards the organization operates on, (iv) define the core values of the organization, and (v) determine the level of commitment, quality, communication and service toward clients and customers.
The Elements of a Winning Culture
- Purpose and Vision
- Define fully and clearly the reason the organization is there, work out the purpose of the organization, what it will do for people
- Determine the needs or desires that the business satisfies for people
- Work out how the business can improve the quality of people’s lives
- Work out what the organization intends to accomplish
2. Philosophy and Principles About Its People and Clients/Customers
- Look for and hire the right people, people with ideal character and qualities, to include high integrity, good intelligence, willingness to learn and grow, creativity, desire to help people, a cooperative attitude, working and getting along well with others, constructive and positive intentions, and hard-working. (Less attention on experience)
- Strong belief in the people chosen to work for the company – belief in their intelligence, capabilities, and ideas. High expectation that people will do their jobs very well and work toward the goals and purposes of the business. Empower people to contribute their observations, ideas, and innovations.
- Provide effective training programs that develop people’s native potentials and capabilities to their fullest. Encourage people to grow and reach their full potentials.
- Work out the best ways and systems to empower people, and develop their creativeness, imaginations and innovative spirits.
- Develop a winning philosophy about client/customer service and care. Customers and clients are given the very best possible products and service. Core customer policies are (1) give people excellent products and services that improve their quality of life, (2) always do the right thing with clients and customers, and (3) resolve any upsets, misunderstandings or problems quickly and to the satisfaction of the client/customer.
- Define high standards for the products and services sold and delivered to clients and customers. Then work to improve those products and services continuously, always innovating.
- Survey customers to find out what they really think of the company’s product and service. Use the answers to improve products and service to customers.
- Define high expectations of responsibility and accountability
- Define a rewards system – financial, professional, promotions, validations, awards, bonuses.
3. Leadership and Management
- Work toward adopting and mastering the 17 Core Leadership Qualities
- Communicate the company’s purposes and goals to everyone in the company.
- Develop comprehensive strategies and plans that produce positive results and gains
- Apply effective management systems, tools, and processes that motivate team members.
- Create an ideal organization and structure that maximizes productivity, efficiency, and profitability, while minimizing stress.
- Establish a high degree of professional communication – internally within the company and externally with clients and customers
- Establish high standards of Professionalism throughout the organization and demand that those standards be followed at all times.
- Work to keep the general mood, tone, and morale in the business high.
4. Instill Core Values
- High integrity
- High ethics
- High standards of quality in all departments of the company
- Intentions and policy to do the right things at all times in all circumstances
- Develop standards and policies of fairness
- Create an attitude and environment of helping others (clients and team members)
- Create an attitude and environment of continuous innovation
- Commitment to be the best
- Continuous improvement
- Care for the well-being of all team members
- Deliver excellent value to clients/customers
- Resolve client/customer problems and upsets quickly and fairly
- Work to improve the quality of life of clients/customers
5. Standards
- High Standards set and followed for customer service and care
- High Standards set and followed for the quality of products and services delivered to clients
- High Standards and expectations set and followed for each job and individual
- High Standards for quality in every part of the organization set and followed
- High Standards set and followed for behavior in the business, codes of conduct
6. Policies and Procedures
- Clear, complete and relevant company rules and regulations
- Clear and fair disciplinary policies and procedures
- Clear and complete Codes of Conduct
There’s a lot to this definition of culture because an organization is a complex, living organism consisting of people and lots of moving parts. All the factors and elements described above combine to determine how things are done, how business is conducted, how people interact, how the company thinks about and acts toward clients and customers.
These definitions and elements could even serve as a useful checklist. A business can work out the answers, definitions, and descriptions of each and every point. A business could create or transform its very culture from such a checklist.
Take a rope, as an analogy. Individual strands are intertwined with each other, forming one rope. A rope’s strength comes from (1) the number of strands and (2) how well the strands are woven together. Now imagine all of the individual elements in the definition of corporate culture as individual strands in a rope. Like the strands of a rope, many individual elements from one corporate culture. How high and how well those elements are applied – and how well those elements are woven together, how well the organization is structured and managed – determine the strength of the business.
A word about strategy, since that was included in Peter Drucker’s cool quote. Strategy is the master plan of how a business will reach its goals. Strategy addresses such elements as defining the goals, how to hire and develop the right people, how to organize the group for maximum efficiency and productivity, the marketing plan, sales plan and training, how to produce and deliver the best product and service to clients, how to rise above the competition, the management and leadership systems and processes.
A good strategy is vital to a business’s success. Without a good strategy and plan, any business will struggle and most likely fail – even a business with an otherwise good culture.
However, even given this need for good strategy and planning, corporate culture still ranks above strategy in importance. All the greatest strategy ever devised won’t be successful if the culture isn’t high enough.
So the hierarchy of importance goes like this ⤵︎
