Culture, that elusive force which both shapes an organization’s people and is in turn shaped by it, has been described as one of the most critical success factors for a company, even to the extent of defining its image. Tony Hsieh, who built up the famously exuberant Zappos culture, puts it elegantly: “Your culture is your brand.”
Exactly how much does culture matter to organizations? Research shows that effective culture can account for 20-30% improvement in corporate performance, which certainly should not be ignored. For the top executives of many companies, the next question in their minds would often be: “What is the best organizational culture for my company?” However, there does not appear to be a ‘perfect’, universal framework that applies to all companies. For instance, the competing values framework provides a guide on which type of culture to adopt, depending on factors such as the flexibility and type of focus of the organization.
Competing Values Framework
Does this mean that there are no principles about organizational culture which is applicable to most organizations? Certainly not, as a few guiding principles have been uncovered, which most companies would be wise to adopt in order to increase productivity and achieve the organization’s goals. For example, the world’s most valuable and most admired company, Apple has been consistently following the principle of having high expectations of its employees, as shown in the following video:
As an Apple employee says in this video when describing Apple’s expectations of workers: “There is no such thing as good enough; it just has to be the best.” Furthermore, many other examples of Apple’s strong organizational culture is demonstrated throughout the video, including cross-collaboration across different departments, the emphasis on attention to detail and hiring people with common values. Building a culture that has come to define the entire company has paid off massively for Apple, contributing to the development of its iconic “I”-products and culminating in its rise to become the most valuable brand and most valuable company by market capitalization in the world.
Notably, Apple is inextricably associated with its late founder, Steve Jobs. Jobs has become a hero within the company and is widely revered by many in the company, with his idiosyncrasies coming to shape its culture. For instance, Jobs’ fascination with calligraphy is said to have influenced his, and by extension, Apple’s aesthetically pleasing products. Moreover, many talented Apple employees were initially drawn to the company because of Jobs’ presence. The takeaway is that having a symbolic leader at the helm of a company can spur employees to greater heights, bringing more success for the company.
Making good hiring decisions is not a value only unique to building Apple’s culture, but it is also a key point for another proponent of effective corporate culture, Tony Hsieh, co-founder and Chief Executive Officer (CEO) of Zappos. In the following video, Hsieh describes how his acid test of whether a company’s culture fits him or not is whether he would willingly spend time with his colleagues after work:
An effective organizational culture is most easily built through hiring people that share the organization’s core values, as opposed to hiring someone who does not fit and attempting to change his/her ideals later. In addition, it is notable how Hsieh underscores the importance of organizational culture by asserting that it remains the number one priority in his company. Without an effective corporate culture, employees tend to be less motivated and productive at work, and the company’s results will in turn suffer.
In relation to our module’s latest case study, the Taj hotel chain also emphasizes hiring people that fit the organizational culture over hiring those from elite business schools and prestigious backgrounds. The effectiveness of its organizational culture was demonstrated when the staff’s heroic actions saved the lives of numerous hotel guests, even at the risk of losing their own lives.
Building an effective organizational culture can indeed create a whole that is more than the sum of its parts, by improving employee engagement and the company’s brand. Conversely, a poor corporate culture could hurt the organization’s image and increase the turnover rate. Jobs’ Apple, Hsieh’s Zappos and the Taj hotel chain have shown us the importance of organizational culture to the success of a corporation. If you were to become a CEO, you ought to take their lessons to heart, for not only does your organization’s culture represents its brand, it also represents who you are.
Giggs, B. (2011, August 25). Steve Jobs: From college dropout to tech visionary. Retrieved from CNN: http://www.cnn.com/2011/TECH/innovation/08/25/steve.jobs.profile/
Hsieh, T. (2009, January 3). Zappos Blogs: CEO and COO Blog. Retrieved from Zappos: http://blogs.zappos.com/blogs/ceo-and-coo-blog/2009/01/03/your-culture-is-your-brand
Schweizer, K. (2013, September 30). Apple Overtakes Coca-Cola as World’s Most Valuable Brand. Retrieved from Bloomberg: http://www.bloomberg.com/news/2013-09-30/apple-overtakes-coca-cola-as-most-valuable-brand-study-finds.html