Build a Corporate Culture That Works
by Erin Meyer
The August, 2024 edition of the Hub is highlighting an article of Erin Meyer (Harvard Business Review) which explores the importance of cultivating an effective corporate culture, emphasizing that while many companies understand its significance, few manage to articulate their culture in a way that truly shapes employee behavior. Drawing from her experience as a professor and business advisor, Meyer offers six guidelines for managers to create a functional and impactful corporate culture.
- Build Your Culture Based on Real-World Dilemmas
Meyer highlights that many organizations fail by focusing on abstract values like integrity and respect, which don’t guide day-to-day decision-making. Instead, she advocates for using specific dilemmas employees might face, offering clear guidance on how to resolve them. This approach ensures that the culture becomes a practical tool for decision-making rather than just a set of ideals.
Example: A manager must decide whether to inform their team about potential organizational changes that might disrupt their workflow. By discussing the pros and cons of transparency versus stability, the organization can guide managers on the preferred course of action.
- Move Your Culture from Abstraction to Action
Meyer suggests that if a company already has abstract cultural principles, it should "dilemma-test" them to ensure they are actionable. She shares an example of a tutoring company, TutorX, which evaluated its values through real-life scenarios to ensure they provided clear guidance for employee behavior.
Example: Amazon’s value “Have a backbone: Disagree and commit” directs employees to voice their opinions clearly before committing to a decision, thus guiding behavior in specific situations.
- Paint Your Culture in Full Color
Concrete, memorable images and provocative statements make cultural values stick. Meyer notes that visual and colorful descriptions can lodge cultural principles in employees’ memories more effectively than abstract words.
Example: Amazon’s “two-pizza rule” (teams should be small enough to be fed with two pizzas) is a vivid, memorable way to emphasize the importance of small, agile teams.
- Hire the Right People, and They Will Build the Right Culture
Hiring individuals whose personalities and values align with the company’s culture is crucial. Meyer emphasizes that even well-articulated cultural values will fail if the wrong people are hired.
Example: Patagonia hires people who are passionate about the outdoors, ensuring that employees resonate with the company's adventurous and environmentally conscious culture.
- Make Sure that Culture Drives Strategy
Meyer underscores the importance of aligning culture with strategic objectives. Cultural values should guide employees in making decisions that move the business towards its goals.
Example: HubSpot’s culture encourages adaptability and lifelong learning, steering employees to be innovative and embrace change, aligning with the company’s strategic goal of continuous improvement and innovation.
- Continuously Reinforce the Desired Culture
Cultural reinforcement should be an ongoing process. Meyer advises leaders to continuously remind and encourage employees to embody the cultural values, ensuring they remain a living part of the organization.
Example: Netflix’s statement “Adequate performance gets a generous severance” serves as a continuous reminder that only exceptional performance is acceptable, reinforcing a high-performance culture.
Conclusion
Meyer concludes that by articulating culture through real-world dilemmas, using vivid imagery, hiring the right people, and aligning culture with strategy, organizations can create a corporate culture that truly works. Continuous reinforcement of these principles ensures that the culture remains effective and dynamic, driving the organization towards success.
Note: Views expressed in the article are of the author and do not necessarily represent IICA’s stand on the subject matter.
(IICA duly acknowledge the authorship/ownership of the article and republishing the same only for educational purpose of Independent Directors)
