The role of Culture in Business

What is a good culture in a business setting?

Put simply, a good culture in business is one where teams are helped to thrive, where good ideas are conceived and acted upon and where the people with relevant skills are taking the decisions and doing the work they are best qualified to take and do. A good culture will improve any organisation, no matter what business model or strategy is in place. Conversely, a poor culture will undermine even the most solid business.

What value does a good culture have? 

More so than ever, to remain competitive in a world where technology will lower barriers to entry, all companies will have to reinvent themselves, their products and services. This reinvention relies on innovation and innovation is dependent on a culture that encourages, nurtures and develops good ideas while rationally dropping good ones. Innovation cannot be forced by process or hierarchy, it is reliant on a combination of expertise, exposure to a market or demand and a conducive environment. It is no accident that successful software companies, where innovation is essential and continuous, spend time and effort putting in place a good culture.

Good culture promotes better decision making by ensuring that the informed voices are heard and listened to, increasing the chances of the decision being made. Clear and informed decision making improves productivity by increasing the chances that resources are deployed to support the right initiatives, rather than ones that have been pushed down through a hierarchy.

While turnover of staff in a team is a necessary part of regeneration and keeping talent fresh, organisations should try to control this turnover by retaining the right talent and attracting new. A good culture is key to attracting and retaining talent. People do not want to work in places where the culture is dysfunctional or characterised by conflict and micro-management.

What are the characteristics of good cultural leadership?

Good company cultures do not establish themselves; they need to be cultivated and maintained. Some of the usual characteristics are:

• Innovative and well performing companies require visionary leadership. Talent will thrive and become productive if there is a shared and inspiring vision
• A safe and blame free culture, where innovation and experimentation are encouraged and mistakes tolerated
• Open and continuous communication, in all directions: encourage challenges, answer questions honestly and promote a feeling of belonging
• No micro-management, trusting that the skill and competence of the teams, combined with the vision, will generate the value and innovation that is desired
• Suitable metrics that allow for good decision making but do not create fake competition and thus encourage teams to game their performance

How can we change our culture?

The first step is to decide to make the change. Once this decision has been made, begin with the vision and establish the desired characteristics. If you have a culture that is not performing, you will need to reduce undesirable behaviours, a process that will take time and effort. In a later article, we will address the change management involved in building a high-performing culture.