The financial crash a decade ago put excessive focus on profit in a bad light. Today, companies need a credible culture to match their stated values – and that means leading from the front
The best corporate culture addresses all stakeholders – customers, employees, community, regulators and investors – emphasising vision, transparency and strategy.
A strong culture may preserve a company’s reputation if the worst happens and can give a company a competitive advantage in attracting talent and engaging communities and customers. Core cultures that express values and aims clearly, and encourage thinking outside the box, can hugely assist explosive growth.
“When a corporate culture works well, the values become self-fulfilling prophecies. Seventy to eighty per cent of companies could get behind a set of values. But it’s about actually living those values. And every business has to work hard to implement values like honesty, integrity and transparency,” comments Greg Campbell, Employment Partner at Mishcon de Reya.
“If you don’t have a good culture, it’s hard to make it from small to medium size. Often, these companies have just two or three founders and an investor. Start-ups are small operations with a vision. There’s not much money at the start, so new hires have to believe in the culture because the business is probably not paying much. You need to be able to tell a story about more than just money.”
“Our company culture is centred around being fun, happy, caring and thankful, and focuses on making a positive difference,” says Rikke Rosenlund, founder and CEO of BorrowMyDoggy, an online platform that connects dog owners with local dog lovers across the UK and Ireland. “Our team really cares about our customers and welcomes new and existing members’ comments, as from here we can build a better community for everyone. We are the first site of its kind, so the idea in itself is innovative.”
Housekeep.com has grown quickly since its inception four years ago, when it set out to provide “London’s best housecleaners”. Avin Rabheru, founder and CEO, says of the company’s culture: “When you’re scaling fast, you have to make sure your people are on the same page – that means we hire and promote highly selectively based on our cultural values. Fast growth requires a certain mindset – you want bright people who will work hard and deliver results. We test these values at interview and they’re built into every employee review.”
Inevitably, working fast leads to mistakes. But a robust corporate strategy will tackle these quickly and fix any problems – even welcoming errors as part of the path to innovation.
James Eden, CEO of clothing company Private White VC, says: “We encourage all our staff to make mistakes; mistakes only happen when people are trying to push themselves, to push boundaries, to go that extra yard further. Standing still in today’s global marketplace is not an option for us.”
Globalisation, increased consumer activism and the rise of social platforms such as Twitter and Facebook have brought a much bigger audience as well as more scrutiny for companies. While UK supermarkets may relish praise from customers on Twitter for their efforts to cut the use of plastic, companies also face first-hand reviews for workplace practices on websites such as job-search hub glassdoor.co.uk. Meanwhile, news organisations are encouraging whistle-blowers to share information.
If catastrophic events do happen, companies with a strong internal culture have a better buffer against them. Making sure whistle-blowers can speak up, rectifying mistakes swiftly and taking responsibility can help to ensure problems are caught early and reputations are protected.
“A good culture has an inoculating effect,” comments Greg Campbell of Mishcon de Reya. “A strong culture will increase the chances of wrongdoing being nipped in the bud and the bad apple being spotted before they are able to damage the business. You also reduce the risk of a catastrophic brand issue. To then deal with the problem in a manner consistent with your culture, not ignoring or burying the problem, you are in a better position to ride out any rogue employee who could otherwise slip through the net.”
He points to the LIBOR scandal that swept through the financial services industry as an example of companies weakened by a negative culture. The banks involved attributed wrongdoing to a few traders. But the bad behaviour went unchecked for years – by colleagues and by management. Subsequent overhauls to corporate strategy and regulation have emphasised the need to protect those who call out misdeeds.
The best CEOs will prioritise culture and find new ways to ensure their corporate message is clear for customers, employees and investors.
“[A]ny advantage fades if it is not built atop something more fundamental. Something that enables a competitive advantage to sustain and grow over time. That something is culture,” Carolyn Dewar and Reed Doucette wrote in a blog for consultants McKinsey earlier this year. “In a world where the one constant is change, culture becomes even more important because organisations with high-performing cultures thrive on change.”
This article first appeared on FT.com.