Chances are you’ve heard the word ‘culture’ a lot recently. It seems to be everywhere – business articles, industry conferences and company meetings. It’s hardly surprising to learn, then, that culture is Merriam-Webster’s Word of the Year for 2014.
If you are a business owner or company executive, culture is a topic that deserves to be given serious thought and attention, and you’d be in good company if you did so. According to Deloitte’s latest annual survey of 3,300 executives in 106 countries*, company culture is considered to be more important than leadership.
Why? Consider this – when talented people work together in an environment that fosters collaboration, trust and positive energy, the level of innovation increases and value is created. A recent study reported that 84 percent of the S&P 500’s market value is derived from intangible assets such as copyrights, brands and goodwill – all the result of human creativity. And in a rising economy in which businesses are competing for the best and brightest talent, company culture plays a major role in attracting it. A recent Gallup poll indicated that a company’s reputation as a great place to work was by far the most influential factor for professionals considering a move.
So what exactly is culture, and how do we create a culture that is right for us?
Culture is one of those words, like branding, that is often misused and misunderstood. Going back to the source for help, Merriam-Webster defines culture as a way of thinking, behaving, or working that exists in a place or organization (such as a business). Fine as far as it gets us, which is not very far.
According to Fortune magazine’s 100 Best Companies to Work For, there are four elements of culture that make the greatest difference.
The best companies clearly define their Purpose (why they exist). When employees believe in a big idea, people tend to band together, relationships flourish and innovation occurs. REI’s purpose, for example, is to “help people enjoy the outdoors sustainably.” Whole Foods’ 76,000 team members are driven by “improving customer’s health and well-being.”
Great people want to be surrounded by other great people. It is no surprise that 14 of the 100 Best are also the companies where it is hardest to get hired – Twitter, St. Jude Children’s Hospital , The Container Store, etc.
Beyond one of the typical corporate values, genuine trust is created when people are empowered and not micromanaged. Many of the 100 Best let employees work when they want – which typically results in people working longer. Riot Games, the online gaming company, takes it one step further by giving employees unlimited paid vacations. When there is trust people tend to treat each other fairly, minimizing the need for rigid policies.
Every company on the 100 Best had an impressive list of perks and benefits. Google is famous for its perks but takes its actions further by providing an employee benefit that few are aware of: if an employee dies, the remaining spouse receives half the employee’s salary for the next ten years. What a powerful message this commitment sends to the team.
Whatever the new word for 2015 might be, I sincerely hope that culture doesn’t fade away as last year’s vogue word; it is too important for that. Building an enduring culture is a long-term commitment that starts at the top and goes well beyond free food, gym memberships and creative environments.
A great example of a strong, lasting vision that adds business value is that of W.L. Gore, the high-tech materials company that gave the world Gore-Tex. Founded by Bill Gore and his wife Genevieve in 1958, this privately held company describes itself as “a technology- and science-based enterprise with people and relationships at our core” and has been on the 100 Best list every year since 1998. The secret of their success is something they call “conscious culture,” based on a flat, lattice-like organizational structure. There are neither chains of command nor predetermined channels of communication. Leaders replace the idea of “bosses.” Associates choose to follow leaders rather than have bosses assigned to them.
You can call it corporate culture or anything you like, but each of Fortune’s 100 Best has a clear message – the conviction of a compelling higher purpose, delivered by an empowered team results in increased innovation, growth and value creation.
*Global Human Capital Trends 2015