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Posted: July 13, 2011

Creating and keeping a winning corporate culture

It can really impact your bottom line

Kevin Lombardo

What is culture? Many companies claim to have a corporate or company culture, but few really invest the time or energy to develop one along with and for their employees. Many companies will state they have a culture be it continuous improvement, growth or one of learning. This makes for a great corporate statement, but does it really define the company's actual culture?

A company's culture is often defined by the people who work there and how they operate and interact with one another on a daily basis. It is, perhaps, more of an accumulation of conversations and behaviors exhibited and the informal norms that develop within a corporate setting. How these manifest themselves, will help define the company's corporate culture.

The impact of a poor culture has far reaching implications on the entire organization Sales can stagnate, profits may never meet their potential, production and morale can continue to fall and costs may rise without explanation. In the short term, these symptoms may cause management to make decisions that are not based on the root causes of the problems. In the long run, these same symptoms can have a critical impact on overall enterprise value.

On the other hand, a strong and positive corporate culture can bring significant value to the business on many fronts. An Inc. magazine article, "What is Your Culture Worth" by Bo Burlingham, () does a great job of exploring this phenomenon from the perspective of a potential acquisition. In the article, Bo describes a company who was a high acquisition target for many companies, not because of great synergies, strategic fit or overall market position, but because of the strong corporate culture they had developed and its contagious nature. The corporate suitors wanted desperately to figure out how to "bottle it" and transport it into their own organizations.

The results of a strong corporate culture can be seen in many aspects -- turnover rate, productivity, sales, brand value -- all of which ultimately impacts overall profitability. For a true corporate culture to take hold, senior management must be highly involved and keenly aware of their actions and words and how the employees are reacting.

If a positive culture is encouraged and developed, it will offer opportunities for employees at all levels to have significant influence and impact on the strategy and growth potential of the company. It is management's responsibility to work with the staff to establish that culture and constantly revisit it to ensure its effectiveness.

In today's environment where companies need to be leaner and more flexible, a culture must reflect these trends. This translates into how a company operates, moving decisions closer to the customer and allowing people the freedom to make it happen and yes, to make mistakes. In most instances, employees will happily rise to the opportunity and help lead the efforts.

So, how do you create or change your own corporate culture?

• Open up the dialogue - Provide a "Town Hall" forum for the entire organization. Listen to what is said on breaks, in the lunch room and around the water cooler. Solicit feedback from employees on everything from how to make the product safer to customer retention and employee benefits. Have frank, open discussions on the issues holding the company back from exceeding its goals.

• Go deep into the organization. Don't just focus on upper management. Culture is deeply rooted and goes to the lowest level of the organization.

• Listen and then take action. After opening up discussions, respond back to the organization and let them know they were heard. Outline actions that will be taken and have a report card to score these changes.

• Identify leaders throughout the business to spearhead the change effort. Although commitment must come from the top, it will be the entire company that participates in implementing the solution. Senior management must also be transformational leaders who have not only vision for the business but the qualities to lead and be open to change.

• Blend cultures. In the case of a merger or acquisition, integrate both businesses into a single culture by taking the best aspects of both companies.

Having a healthy corporate culture, along with the right strategy, can be a powerful catalyst to a company soaring beyond its limits and being the business that employees want to work for, competitors envy and investors want to own.
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Kevin Lombardo is founder and CEO of Summit Group Partners, a management consulting firm focused on helping companies identify and maximize opportunities for growth, expansion and operational excellence. Throughout his consulting career, Kevin has formally coached over 25 CEOs and business owners representing 10,000 employees' globally and nearly $2 billion in revenues and helped them to unlock human potential and shareholder value. Kevin is also an AGC member. He can be reached at 303-641-8794 or kpl@summitgrouppartners.net.

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Readers Respond

Kevin, thanks for your good article and helping raise the awareness of the importance of corporate cultures. One perspective of a corporate culture is it's a collective subconscious mind. It's where the true beliefs of an organization reside - that drive all decisions and actions. By TC North on 2011 07 16

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