Corporate culture: what is it and why is it so important?
Corporate culture — it is all about culture of staff relations, both horizontal — peer-to-peer and vertical — manager-subordinate. And about motivating factors making staff to do their duties.
There are six levels of the corporate culture. This post is a brief overview of my personal interpretation of these levels. Word ‘company’ will be used herein, but the described most likely could be applicable to the department within the company or a stand-alone team working on the project.
•Violet level — culture of membership. Works when company employees are closely and strongly connected. For example, family business or a company, where the team consists of close friends. This category is characterized by a high level of cohesion, solidarity and sacrifice of personal goals to achievement of common ones.
Benefits: Comfortable social environment. United team. Manager caring for its employees. No staff turnover.
Drawbacks: Low development of the company. Staff is oriented on maintaining a comfortable environment, not motivated for further company growth and could even sabotage any changes.
•Red level — culture of power. Most of the companies in the post-Soviet countries could be found at this level. Tough management style with all the power in the manager’s hands. Management gives direct orders instructing what and how to do and act, while a subordinate has no choice but to obey.
Benefits: Fast decision making process. Facilitates quick growth at the early stages of company development.
Drawbacks: Manager is ‘tied’ to the company. Work stops without him. Employees do not feel themselves engaged and are not motivated for work. Game rules directly depend on management — if the latter changes, the former changes too. High probability of staff turnover.
•Blue level — culture of rules. As company grows job duties and business processes start taking shape. And thus, a new level is appearing — company doesn’t work on manual control now, but in accordance with set rules. This switch is very difficult for the majority of companies as a manager should release some part of the control in favour of regulatory documents. That is the reason why some of the companies implementing the blue level methodology in fact still stay at red level.
Benefits: You could track some sort of order. Employees know what and how to do and as such feel confident. Using the properly set system company work is evolving and becoming better. In case of management change the rules are not modified but adapted.
Drawbacks: Fosters bureaucracy. Employees are not allowed or not motivated to think or act out of the box. Company flexibility is vanishing. Rules can bring the order into the working process, but will never help in achieving company goals.
•Yellow level — level of success. At this level only meaningful rules, which were implemented at the blue level, are left. However, the focus of these rules is on company goals (success). Proactive leaders take responsibility for a target achievement and structure the processes.
Benefit: all the activities and efforts aimed at goal accomplishment. Company becomes competitive. Managers initiate the changes, take responsibility for the results.
Drawbacks: usually short-terms targets are set so as to have faster results. Career battles and intrigue could be byproducts of this level.
•Green level — culture of cooperation. Collective decisions. Manager tends to focus on the following question: what goals we need to achieve, while the decision on how to achieve is delegated to the subordinates. For that they are empowered to define the methodology and set the rules of target achievement. From this level Agile begins — company flexibility towards changes of the external environment.
Benefits: Freedom of expression, constructive disputes are encouraged. Each team member understands that power of the team is in overall qualification and unity, but not in individual specialists. That’s why respect is inalienable constituent of the atmosphere that dominates within this team.
Drawback: It is a big to-do to have a team working at this level, whereas there is no even guarantee that your efforts will pay off in the long run. Management needs to spend a lot of time and resources for corporate culture development.
•Turquoise level — culture of synergi. All the teams within the company are self-sufficient: they regulate and make decisions on goal achievement, set new targets. This is a level of innovations — everybody among the team could take on the challenge of leadership. And the employees trust each other to that extent when they could even define a wage rate for him/herself.
Benefits: personal fulfilment of each member of the team and overall team potential increase.
Drawbacks: Employees with strong soft and hard skills are required.
Why do you need to implement a corporate culture?
I believe the answer is obvious. When we do know the corporate culture classification, its order and characteristics, then we could:
•set a ‘destination’;
•define the way to follow.
Company is supposed to gradually go up through these levels as each of them gives new knowledge and experience. It’s going to be a long process, which could last for a few years, but the result in the form of a sound company is really worth it.
Next post will contain a little analysis on where we are now and what target we have.