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Why Stronger Corporate Culture is Needed, Now, More than Ever

This post is from the series Managing to Manage While Learning to Lead

If you were asked today to describe the culture of your workplace, would you be able to answer? Would it be a positive description? Does your organization have an easily defined corporate culture, or set of values and practices, shared vision, meaningful back-story, and a means by which it fosters employee development?

For some, the words ‘corporate culture’ may sound like a catch phrase or hokey suggestion that a social scientist came up with simply because he/she was in need of research. And yet, a 2013 study by the Harvard Business Review found that, “The benefits of a strong corporate culture are both intuitive and supported by social science. According to James L. Heskett, culture “‘ can account for 20-30% of the differential in corporate performance when compared with ‘culturally unremarkable’ competitors.’ ”

Year after year companies like Google and Linkedin, which exemplify strong corporate culture, are rated among the best places to work and revered by the media. But what happens in the absence of strong, well-defined, leadership-driven corporate cultures can be far more telling and garner far more press as we have learned in the wake of recent PR nightmares.

We’ve all seen the videos, the United debacle where a passenger trying to get home was dragged from a plane after he refused to be eeny-meeny-miney-moed out of his lower-price seat, followed by the American Air video of a hot-headed employee taking aim at a mother who boarded the flight with a stroller that should have been checked at the gate. While the mistake was hers in the second situation, the reaction of the flight attendant was far too aggressive and reactive.

The once untouchable, Fox News, has been under a microscope for some time as well. Between the lawsuits and payouts for sexual misconduct and the more recent allegations of rampant discrimination that have led to a class-action lawsuit, many experts wonder if Fox is headed toward its demise. In the wake of the sexual harassment claims and settlements nearing $13M, according to a New York Times investigation, multitudes of top-billed advertisers pulled their ads from Fox, inevitably leading to the firing of long-time anchor and Fox golden boy, Bill O’Reilly. If the same advertising exodus occurs with the discrimination lawsuit, Fox could be on course for far greater consequences that leave them unable to fully recover from the mess.  

So, what is occurring within companies that is creating an opportunity for such reckless and inappropriate behavior? Is it the modeling of actions that employees see among leadership, or perhaps the absence of a corporate culture that fosters equality, education, and accountability.

Remember a few years ago, when everyone was clamoring about “corporate culture” and its benefits to organizations and employees, as mentioned in that HBR study. Ideas like this really gained attention with the rise of tech start-ups that decided to take a different approach to the environment and culture they provided to their employees. The company gyms of the 80s-90s were replaced by gaming rooms, creativity think-tanks, and amenities that made one’s personal life as hands-off as possible. They built their companies around shared values, vision, and inclusiveness- and upheld it rather than just throwing words together in a vision statement. They did this because they realized a need for highly competent, fully-engaged, and empowered people at all levels of the organization – who were willing to put in the hours. They also knew that too many gatekeepers or too few opportunities to showcase one’s talent would drive their best people to the competitor.

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Google Office Design

Strong corporate culture begins with proactive leadership – not reactive gatekeepers.

I recall a situation at one of my former jobs in which a staff member was sending out angry emails and going on tangents about unfair pay. In her final email rant, in which she copied me, she informed all of her fellow coworkers and managers how we should be paying employees according to information she found on the Dept. of Labor website. Within the first two sentences I identified her misunderstanding, as she, as a salaried worker, was quoting information based on the non-exempt categorization.

The organizational response to this situation was even more shocking. When I shared what had happened, I was met with a get them under control and tell them if they don’t like it, they are welcome to find new jobs reaction. I listened to the feedback, realized I could not take that approach and have a meaningful or respectful outcome with my staff, and decided to convince my own managers that an educational approach that could serve proactively in the future was a better option. So, I went onto the DoL website and created an FAQ document to help staff understand their classification, any exemptions of that classification, and how we as an organization were in full compliance.

All in all, it was a peaceful meeting and we found peaceful resolution. But, it took some convincing on my part, not with my staff, but with those gatekeepers I had to report the incident to. I had to convince them that the FAQ information I was providing was consolidated from public-facing guidelines on the DoL website. I didn’t need to peruse through legal texts on FLSA or seek any legal support – as it was all right there in an educational format. I was simply acting as a facilitator to help my staff understand the information so to calm their concerns and get them refocused on their work without demeaning or disregarding them. Providing the factual details also lessened the likelihood of a similar concern being raised by others.

This is one small example of the need for a strong, leadership-driven corporate culture. If your organization’s leaders  share an attitude of ‘just get over it and do your job’ you will inevitably have more employees that feel and, potentially, act out of frustration. You will teach mid-level managers and customer-facing employees that disrespect, disregard, and hostility are appropriate reactions. You will have staff that take that same attitude and apply it toward other colleagues, subordinates, or customers, and if or when that does happen, you just might have a PR meltdown on your hands.

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Organizations, as a whole, need to implement and, more importantly, uphold a culture that seeks to empower, educate, and support their employees. Employees should feel they are an integral part of the fabric of the company, are working toward a common goal, and are able to access support when they need it most.  If they are smacked on the nose every time they voice a concern, they will eventually stop telling you anything. This leaves you in the dark and could amplify the likelihood of negative employee reactions in times of stress. Like we have seen with the airline and Fox debacles, that strong reaction won’t initially be aimed at leadership. Instead, it will hit the company where it is most legally or ethically vulnerable- and leadership will be on the hook for creating a culture that condones such behavior as is evidenced by the recent resignation of Bill Shine, Co-President of Fox News.  


Why should organizational leadership care about creating a strong corporate culture?

 

You care about shareholders, donors, and/or stakeholders. 

In the days following the social media video release of Dr. David Dao being forcibly dragged off a plane, United shares fell by 2 percent. An April 11th article published by CNBC noted stockholder concerns in United’s leadership and their ability to manage a crisis as the reason for the drop.

People across the world were shocked at United’s response. To see a bloodied passenger, who did nothing to create the problem, dragged off a plane and to have the company’s CEO back his people’s actions is certainly a PR misstep.

By April 26th, MSN reported that United’s CEO, Oscar Munoz, had a change of heart in the wake of public and stockholder scrutiny that led to multiple apologies, policy changes, and this realization of “across the board failure” within their organizational system:

“We’re going to teach and broaden sort of the cultural impact of respect and dignity, regardless of where you’re sitting,” he added. “And that’s why we’ve said — once you’ve boarded an aircraft, we’re not going to take you off, except for safety and security…a circumstance like we’ve all witnessed should have never happened.”

This type of public reaction is not isolated to United. Share values often fluctuate and fall during a PR crisis or scandal, as was the case with Best Buy (circa 2012), Burberry, and VW just to name a few. The same is true in the world of non-profits, where donor dollars can quickly disappear amid a scandal. The key takeaway here is that shareholders and donors invest not only in the organization, but in the ability of leadership to make the company successful. When a PR crisis explodes in the press and social media, and the organization’s leaders respond slowly, inappropriately, or with a lack of empathy, stakeholders often question their trust and confidence in those leaders and their ability to right the ship.

 

You care about advertising dollars.

As sexual harassment claims and settlements grew and garnered more media attention, the reaction of leaders at Fox News sent shock waves out among the general public and advertisers. They seemed to have a very nonchalant attitude, claiming that Bill O’Reilly was the victim of his celebrity and individuals looking to cash in on his success with false allegations.

Advertisers responded swiftly by pulling ads from the O’Reilly timeslot, as they were concerned that the attitudes and behaviors of Fox News did not reflect their own company values and they did not want to be associated with the mistreatment of women in the workplace.

An ABC News article summarized many of the companies that pulled their ad dollars from Fox’s O’Reilly Factor, including:

GlaxoSmithKline, BMW, Mercedes-Benz, Hyundai, Constant Contact, UNTUCKit, Sanofi, Allstate, Ainsworth Pet Nutrition/Rachael Ray Nutrish, T. Rowe Price, Mitsubishi, Wayfair, MileIQ, Lexus, Bayer, Esurance, Credit Karma, True Car, The Wonderful Company, Society of Human Resources Management, Coldwell Banker and Orkin.”

If the same reaction holds true in the wake of the new class-action lawsuit filed against Fox, which alleges rampant discrimination, it is not only likely that advertisers will not return, but even more could be taking their lucrative ad campaigns elsewhere.

 

You care about your organization’s social reputation.

Mainstream and social media have not let up on United, American Air, and Fox. This is the age we live in, when everything you do as an organization, and an individual, can be held to account and made viral in a matter of moments.

For far too long companies have felt insulted by their ability to afford expensive legal representation that often kept them out of the spotlight and out of the courtroom. However, the creation of the smartphone and increasing use of online mediums like Youtube, Snapchat, and Facebook have led to more individual reporting on unacceptable behavior. This type of reporting, when admissible, adds to the burden of proof that inevitably falls on the plaintiff.

As of yesterday, May 2nd, airline executives began testifying before the House Transportation Committee on policies and practices that dictate customer treatment, in addition to the potential for the legal scrutiny and fines they could face for passenger mistreatment.

The burden of proof among the public has a much lower threshold than it does in a court battle, and the unfortunate reality is, guilty or innocent, once you have been outed on social media it is forever out there. People will judge, sometimes based on full facts, and sometimes based on partial-truths.

Look at Delta and how they have made headlines in the past few weeks. Last week a recording of an incident between the airline and a passenger went viral. When you watch the encounter you can clearly see how calmly and respectfully the Delta representative dealt with the customer, who had used the airplane bathroom at an inopportune time, and yet some will inevitably lump Delta with United and American Air simply because they don’t agree with the policy or the old adage, slightly modernized, of finding yourself in the wrong social media spotlight at the wrong time. 

 

You care about your employees and customers.

Yes, I did save this for last as I want it to be among the thoughts I leave you with. Learning about the benefits of strong, well-defined corporate culture is an obvious first step for any organization who values their people and customers. This will be different for each organization, as gaming rooms are not a one-size-fits-all type of benefit. It is also important to realize that stress and frustration exists at every level of an organization, in every job, so be clear on that fact that this is not a rainbows and sunshine solution. It is; however, a good first step to teaching your employees what you, as an organization, stand for and what is valued. Leadership inevitably has to take the lead and set the example that will trickle down to other levels of the organization. If you have leaders that don’t care and act bothered every time someone knocks on their door, you will have the same attitude in other layers of your organization.
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In a recent CBS interview Apple’s SVP of Retail, Angela Ahrendts, was asked about her perspective on building employee morale and buy-in, which are directly linked to corporate culture. Having little knowledge of the tech field when she first started with Apple, buy-in was not an easy sell. She had to lead with empathy and trust in order to rally employees around her ideas. One truly simple and poignant quote that was mentioned in the interview was, “‘Empathy is one of the greatest creators of energy.’ “ This could not be truer or more on the nose when it comes to corporate culture.

It has been said many times before, the way you treat your employees is a direct reflection of how you will treat your customers. Start there the next time someone comes in with an important issue or you are faced with a stressful situation. An empathetic mindset and a respectful attitude can help you find ways to work together and problem solve, instead of making the person feel like they’ve created a burden for you. Note, I am not telling you to do their job or make people reliant on you, but instead to work constructively to help your employees realize they are the best person to fulfill their job and make decisions regarding their work. Then empower your people to go out and do the same with subordinates, colleagues, and customers.

And, if as an organization, you have a mission statement that touches on treating customers with respect or adding value to their lives for having chosen your organization, you would be smart to apply that same mission to your employees and to your workplace culture. Some great examples of companies getting rave reviews from their employees can be found in this Business Insider article on the best companies to work for in 2017. Perhaps a perusal of what they are doing as an organization to motivate and value their workplace culture and employees can be modeled by others.


What does strong corporate culture look like? Check out these suggested books to find out more:

Good to Great: Why Some Companies Make the Leap and Others Don’t

Reader Reviews: 4.5 stars

Price: 8.59-32.50

2,130 reviews

http://amzn.to/2oYDBVb

 


Leaders Eat Last: Why Some Teams Pull Together and Others Don’t

Reader Reviews: 4.6

Price: 10.99-27.95

745 reviews

http://amzn.to/2oYIo8Q

 


Start with Why: How Great Leaders Inspire Everyone to Take Action

Reader Reviews: 4.5

Price: 7.19-20.00

1,680 reviews

http://amzn.to/2pxxmL2

 


Carrots and Sticks Don’t Work: Build a Culture of Employee Engagement with the Principles of RESPECT (Business Skills and Development)

Reader Reviews: 4.8

Price: 12.99-17.95

167 reviews

http://amzn.to/2pM6nwk

 


Food for thought:

We all have jobs to do, and most of our jobs are stressful on some level, but, as I’ve said before, these recent events have really brought to light just how frustrated and disconnected employees are feeling with the organizations they represent and the customers in need of their compassion.

So, what are we, in leadership, doing to address it? Tell us in the comments below. 


About the Author

Gwendolyn is a lover of travel and culture, having visited over 13 countries and having lived most of her adult life in Europe and Asia – where she explored, learned, and fell in love.

In her professional career she has worn the hat of director in International Education, professor, trainer, strategist and fundraiser for nonprofits. Most recently she started lifeinherent.com and co-founded Laifeu LLC.

She earned an MA in Public Relations and a BA in Media Communications.


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