Company Culture

Why Culture Management Matters More Than You Think

Culture management is the missing piece in the puzzle when business performance feels stagnant. Even with a solid strategy, a great product or service, and a talented team, disengaged employees, rising turnover rates, and struggling change initiatives can hold you back.

According to the PwC Global Culture Survey in 2021, 72% of senior management reported their culture to be the driving force behind successful change initiatives. The report also highlighted that 67% of workers believe that culture is more important than strategy or operations.

Here comes the real question. Why is culture management so powerful? The answer is simple!

Management of culture is not just about what to do. It’s about how you do it and how your people experience it or how your employees feel.

What is Culture Management?

Culture, often overlooked, is one of the most significant factors that either makes or breaks the deal. Think of culture as the soil in which your business grows.

Healthy soil = nourished and flourishing environment and success

On the contrary, if it’s neglected, even the best strategies will struggle to take root.

Company culture management is the intentional and strategic process that shapes, aligns, and nurtures the values, beliefs, and behaviors that define a company’s organizational culture.

Management of culture involves creating an environment where employees:

Feel connected to the organization’s mission

Motivated to perform at their best

Empowered to contribute to the company’s long-term success

However, building and managing culture requires a deep understanding of the organization’s values. Culture management isn’t only about setting the tone but also about aligning leadership and employees at every level.

The Competitive Advantage of a Strong Company Culture

Let’s face the truth — Business is competitive. What sets some companies apart isn’t just their product or service but how they operate internally. Culture plays a massive role in an organization’s success.

According to TeamStage (2024), companies with strong cultures see a 202% increase in performance.

Another astonishing fact reveals that 86% of job seekers avoid companies with a bad reputation and poor culture. Why? Because a toxic workplace makes employees depressed and repels top talent.

Culture Transformations That Earned a Name

Still skeptical? Let’s look at companies that turned things around by prioritizing culture.

IBM (Early 1990s)

IBM represents a classic example of culture management. It moved from a hierarchical, rigid culture to a customer-focused and innovative culture under CEO Lou Gerstner.

The company successfully regained its competitive edge by restructuring management, improving communication, and fostering collaboration.

Microsoft

Microsoft is committed to fostering a positive work environment and encouraging continuous learning.

Sole purpose? To boost employee motivation.

The result? Better business outcomes, driven by a more engaged workforce.

Zappos

Their secret sauce that guaranteed success?

A customer-centric positive company culture that emphasized employee engagement and talent development.

Zappos aligned corporate goals with employee behavior and built a company where workplace culture was excellent, people wanted to work, and customers wanted to buy.

How Culture Shapes Employee Behavior

We’ve been talking about culture shaping employee behavior or “employees feel” since the beginning.

Remember, culture isn’t limited only to employees’ feelings or how they feel. It directly influences their decision-making and performance. The Hofstede Insight Report 92023) found significant gaps between management and employee perspectives in various countries, including India, Belgium, and Peru. Since the Leadership and employees weren’t on the same page, the outcomes were obvious — productivity took a hit.

That’s why businesses need an intentional approach to culture management.

The Hidden Costs of Ignoring Culture / Poor Employee Behavior

If you’re still not serious about culture management, learn that neglecting it can cost businesses more than they realize.

High employee turnover, low engagement, and decreased innovation aren’t the fully grown consequences but just the tip of the iceberg.

Poor workplace culture directly translates into increased absenteeism, declining morale, and reputational damage.

If you as an organization won’t spend on management of culture today, you’ll soon find yourself spending more on recruitment, retention, and crisis management.

Leadership’s Role in Culture Change Management

Effective leadership goes beyond implementing policies. Great leaders shape the cultural framework that defines an organization.

How do they make it possible? With their clear vision and ability to communicate and inspire, efficient leaders engage with employees and build trust.

Leaders must actively listen, empathize, and foster collaboration. This ensures alignment between the organization’s strategic goals and cultural values while letting the employees feel that they are heard.

When such leadership demonstrates an unwavering commitment to transformation, dedicated team members are more likely to follow, ensuring a seamless and lasting cultural shift that speaks volumes.

Practical Steps to Strengthen Your Company Culture

The best practices for culture management include:

Define Core Values: Clearly state organizational values and ensure they align with business goals.
Improve Communication: Ensure open and transparent communication between leadership and employees.
Prioritize Employee Well-being: Encourage work-life balance, ensure the provision of mental health support, and promote workplace inclusivity.
Encourage Continuous Learning: Invest in training and development programs to help employees grow within the company.
Recognize and Reward Employees: Appreciate employees’ efforts and their sense of belonging through incentives and public recognition.
Monitor and Adapt Culture Strategies: Use employee feedback and industry benchmarks to assess culture effectiveness.
Lead by Example: Culture starts at the top. Leaders must exhibit the values they want to see in their employees.
Foster a Growth Mindset: A Winning mindset always embodies learnings like embracing challenges, learning from failures, and innovating without fear. Make sure your employees’ learning includes these crucial milestones.

Indicators of Successful Culture Change

Measuring the success of culture change or cultural management requires identifying key indicators that reflect its impact, such as employee engagement, workplace culture, etc.

Track the following to gain a better insight into cultural change.

Employee Behavior Alignment

Employees actively demonstrate new cultural values in decision-making, work-life balance, and collaboration.

Integration into Business Practices

Cultural shifts become more visible in daily operations throughout – from leadership to team dynamics.

Improved Performance Metrics

Improved KPIs, such as enhanced financial performance, customer satisfaction, and employee retention, highlight successful integration.

Effective Communication

Clear understanding, widespread acceptance of cultural values, and smooth communication across all levels of the organization can be seen.

Adaptability and Resilience

The organization’s ability to evolve while maintaining core cultural principles.

Positive Employee Feedback

High employee morale and engagement levels are reflected in surveys and feedback loops.

Sustained Cultural Shifts

Long-term integration of cultural values into the organization’s identity.

Challenges in Culture Change Management & How to Tackle Them

Resistance to Change

Employees often feel reluctant when it’s about embracing change or new processes. Such hesitations halt the adoption of cultural values.

Communication Barriers

Misalignment and communication gaps between leadership messaging and employee perceptions create confusion and skepticism.

Inconsistent Leadership Support

If leaders are inconsistent in their commitment to change, cultural transformation efforts can lose credibility.

The good part is that there are easy ways to overcome these challenges.

Organizations must prioritize:

Transparent communication	Involve employees in the process
Ensure leadership alignment	Regular feedback mechanisms and adaptability

Final Thoughts

If you, as a business, aim to create an impact like Microsoft and IBM, management of culture becomes inevitable. With this change and upgrade, you can create a business with a competitive edge and engaged and committed employees.

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