Communicating corporate culture

Improving corporate culture is one of those holy grails that management on every level talks about, hoping to influence how employees interact with each other and customers. I’m sure many of you lived through mergers and acquisitions and were told how these would produce far better results than either company could achieve on its own. (Yes, the word “synergy” is used a lot.) But based on statistics collected over decades, mergers have experienced dismal failure rates, even worse than marriages.

Corporate culture is often cited as a chief culprit in failed acquisitions. A book by Timothy J. Galpin and Mark Herndon, The Complete Guide to Mergers and Acquisitions: Process Tools to Support M&A Integration at Every Level, described a study of 190 CEOs, CFOs and other top executives with experience in global acquisitions (Watson Wyatt Worldwide 1998a). They found that “cultural incompatibility is consistently rated as the greatest barrier to successful integration but that research on cultural factors is the kind least likely to be conducted as an aspect of due diligence.”

Whether you are going through a merger or not, corporate culture is more than critical to your company’s health. “The thing I have learned at IBM is that culture is everything,” said Louis V. Gerstner Jr., former CEO of IBM. Managing corporate culture well and consistently should come before all else, including, for example, managing your brand. A dysfunctional corporate culture cannot create a trustworthy brand, even if you have a great branding agency. And there is another fallacy some companies pursue, often with a vengeance: the quixotic quest to change culture.

“Company cultures are like country cultures. Never try to change one. Try, instead, to work with what you’ve got,” said Peter Drucker. And working with what you got means communicating positive attributes of your culture, and highlighting characteristics that made particular individuals or groups in your organization successful. By creating personal narratives you make your stories real because they stick in people’s minds far longer than artificial, non-personal examples. These narratives can also show instances of corrective actions, when you feel that certain behaviours are inconsistent with the kind of corporate culture you want to maintain.

I have found there is something very personal about communicating corporate culture. You should give serious consideration to using social media to initiate a conversation with your employees and other stakeholders. By having a dialogue about your organizational values, morals and manners, you may find that communicating corporate culture is not about power projected from the executive office. It’s all about influence. (Please see my last post about the difference between power and influence.)

And if you’re still not convinced that communicating the right corporate culture matters, here’s one last piece of proof to consider. John Kotter and James Heskett of Harvard Business School made an interesting observation about the correlation between an organization’s culture and its performance: “We found that firms with cultures that emphasized all the key managerial constituencies (customers, stockholders, and employees) and leadership from managers at all levels outperformed firms that did not have those cultural traits by a huge margin.”