Importance of Corporate Culture Why it Needs a Fresh Look

Importance of Corporate Culture Why it Needs a Fresh Look Importance of Corporate Culture: Why it Needs a Fresh Look Image Source: iStockTHERE are many reasons why people in general  feel uncomfortable about corporates, and why  they tend to  downplay the importance of corporate culture, and even to jettison also some of its best principles.  Much of this is rooted in misconception, but also in a high number of scandals that have erupted in corporates over the past two decades.At one  point in the career path of this  AGENT correspondent, there was a shift in career, from working at a large firm in a city to a rural-based small enterprise, and one of my colleagues almost literally turned green with envy.  â€œI think you’d probably be better off in a small businessâ€"there seems to be a bit more care and respect for individual employees and their needs, than what you’d get in a big, faceless, corporate bureaucracy,” the colleague said.  It was clear that this colleague’s  experience of corporate culture, whether perceived or actually experienced, was somewhat less than positive.But this  is why the recent work by leading researchers at Duke University’s Fuqua School of Business is so welcome.  Unfairly, “corporate culture” is a term that is freighted with negative connotations, perhaps because it is used most often at times of crisis or scandal within big corporations. In those circumstances, it is used either derisively by critics of such companies or defensively by the representatives of those selfsame organisations.However, the term is prevalent enough for the Duke researchersâ€"Prof Jillian Popadak, Prof John Graham and Prof Campbell Harveyâ€"to join forces with Shiva Rajgopal of Columbia Business School, and in partnership with CFO Magazine and COLE, the Fuqua/Coach K Center on Leadership Ethics, to attempt to illuminate something that has been heavy on vague talk and rather light on tangible, measurable specifics.As Prof Harvey puts it, this fascinating research project attempts to assign a measurable value to something that up until now has not been avail able through perusal of quarterly company reports. In other words, it makes public and available to a broad but discerning business audience, scientific evidence about the importance of corporate culture.The 13-month research project involved the questioning of 1,800 CEOs and CFOs internationally (1,400 of them from North America and Canada); and interviews with executives at 20 large firms (with average sales of $50bn).Prof Harvey also told Fuqua news service on the release of the initial findings at the end of last year, that the research also amounts to an effort to “change the conversation” about corporate culture.“It is a puzzle,” he said “that if culture is so important to value, why do we hear very few CEOs talking about it? Most often, talk of culture arises after a disasterâ€"such as the VW emissions scandal,” he said.By attempting to move the discussion outward and away from narrow, and negative, associations with dubious business practice, and towards an under standing of how a properly defined business culture can benefit organisations of all sizes.A rigorous approach to devising a culture that clearly outlines what is expected of employees at all levels can only lead to greater efficiencies, whether the organisation is a conglomerate, and perhaps even more so if it happens to be an operation in the SME sector.Here are 4  fascinating things to emerge from the initial findings of the project. (adsbygoogle = window.adsbygoogle || []).push({}); 1. Belief in the Importance of Corporate Culture is StrongMORE than 90 percent of the respondents said that culture was important at their firms, with 92 percent of the view that their respective firm’s corporate culture would improve the company’s value.Also, 78 percent said that culture was among the top five things that made their respective companies valuable.In a field that previously was most notable for its vagueness, the widespread belief in company culture’s existence, and its importa nce, is a valuable starting point, to say the least.2. Even the Broad Definitions are PositiveTHE respondent executives defined culture, variously, as a company’s tone, its operating style, standard of behaviour, and even as an invisible hand that steers the firm.Respondents tended to locate their definitions of corporate culture in a sense of shared values between personnel at companies, which guided collective and individual decisions.As researcher Shiva Rajgopal says, this amounts to “systematic evidence â€" perhaps for the first time â€" that effective cultures are less likely to be associated with short-termism, unethical behaviour or earnings managements to pad quarterly earnings”. (adsbygoogle = window.adsbygoogle || []).push({}); 3. Culture Influences All Aspects of a FirmA MAJORITY  of respondents, just over 50 percent told the researchers that they believed corporate culture influenced productivity, creativity, profitability, value and growth.The researchers noted a marked passion among respondents about the effects and importance of corporate culture.4. A Hunger for Greater Understanding of CultureTHERE was a certain amount of contradiction contained within the findings. For example, while 78 percent said culture was one of five things that made their firms most valuable, it can hardly be ignored that only 15 percent of respondents felt their own corporate culture was exactly where it needed to be. Clearly, there is still a degree of misunderstanding about the importance of corporate culture.In addition, 70 percent of respondents agreed with the researchers’ statement that “Leadership need to spend more time to develop the culture.”This would seem to chime with the findings of the most recent Edelman Global Trust Barometer. That  data suggests that traditional modes of aloof ‘top-down’ hierarchical leadership are no longer relevant. With  trust in politicians waning, this may be  an opportunity for corporates to build a culture alig ned with the values of a populace that is looking to business to take a more visible and leading role in communities.CLEARLY, it will be some time before we reach a point of synthesis between the findings of researchers and the willingness of corporates to engage with the data. The true power of a properly defined business culture will not be defined, understood and harnessed overnight.But for businesses at all levels, it will be a worthwhile wait. Finally, all businesses will be able to truly understand the benefits of corporate culture.Having released its preliminary results at the end of 2015, the research team is, as Prof Graham says, in many ways only just at the beginning of its process.“Our research team is just getting started synthesizing the thousands of detailed insights that the executives provided, and we look forward to many new discoveries in the months ahead. Importance of Corporate Culture Why it Needs a Fresh Look Importance of Corporate Culture: Why it Needs a Fresh Look Image Source: iStockTHERE are many reasons why people in general  feel uncomfortable about corporates, and why  they tend to  downplay the importance of corporate culture, and even to jettison also some of its best principles.  Much of this is rooted in misconception, but also in a high number of scandals that have erupted in corporates over the past two decades.At one  point in the career path of this  AGENT correspondent, there was a shift in career, from working at a large firm in a city to a rural-based small enterprise, and one of my colleagues almost literally turned green with envy.  â€œI think you’d probably be better off in a small businessâ€"there seems to be a bit more care and respect for individual employees and their needs, than what you’d get in a big, faceless, corporate bureaucracy,” the colleague said.  It was clear that this colleague’s  experience of corporate culture, whether perceived or actually experienced, was somewhat less than positive.But this  is why the recent work by leading researchers at Duke University’s Fuqua School of Business is so welcome.  Unfairly, “corporate culture” is a term that is freighted with negative connotations, perhaps because it is used most often at times of crisis or scandal within big corporations. In those circumstances, it is used either derisively by critics of such companies or defensively by the representatives of those selfsame organisations.However, the term is prevalent enough for the Duke researchersâ€"Prof Jillian Popadak, Prof John Graham and Prof Campbell Harveyâ€"to join forces with Shiva Rajgopal of Columbia Business School, and in partnership with CFO Magazine and COLE, the Fuqua/Coach K Center on Leadership Ethics, to attempt to illuminate something that has been heavy on vague talk and rather light on tangible, measurable specifics.As Prof Harvey puts it, this fascinating research project attempts to assign a measurable value to something that up until now has not been avail able through perusal of quarterly company reports. In other words, it makes public and available to a broad but discerning business audience, scientific evidence about the importance of corporate culture.The 13-month research project involved the questioning of 1,800 CEOs and CFOs internationally (1,400 of them from North America and Canada); and interviews with executives at 20 large firms (with average sales of $50bn).Prof Harvey also told Fuqua news service on the release of the initial findings at the end of last year, that the research also amounts to an effort to “change the conversation” about corporate culture.“It is a puzzle,” he said “that if culture is so important to value, why do we hear very few CEOs talking about it? Most often, talk of culture arises after a disasterâ€"such as the VW emissions scandal,” he said.By attempting to move the discussion outward and away from narrow, and negative, associations with dubious business practice, and towards an under standing of how a properly defined business culture can benefit organisations of all sizes.A rigorous approach to devising a culture that clearly outlines what is expected of employees at all levels can only lead to greater efficiencies, whether the organisation is a conglomerate, and perhaps even more so if it happens to be an operation in the SME sector.Here are 4  fascinating things to emerge from the initial findings of the project. (adsbygoogle = window.adsbygoogle || []).push({}); 1. Belief in the Importance of Corporate Culture is StrongMORE than 90 percent of the respondents said that culture was important at their firms, with 92 percent of the view that their respective firm’s corporate culture would improve the company’s value.Also, 78 percent said that culture was among the top five things that made their respective companies valuable.In a field that previously was most notable for its vagueness, the widespread belief in company culture’s existence, and its importa nce, is a valuable starting point, to say the least.2. Even the Broad Definitions are PositiveTHE respondent executives defined culture, variously, as a company’s tone, its operating style, standard of behaviour, and even as an invisible hand that steers the firm.Respondents tended to locate their definitions of corporate culture in a sense of shared values between personnel at companies, which guided collective and individual decisions.As researcher Shiva Rajgopal says, this amounts to “systematic evidence â€" perhaps for the first time â€" that effective cultures are less likely to be associated with short-termism, unethical behaviour or earnings managements to pad quarterly earnings”. (adsbygoogle = window.adsbygoogle || []).push({}); 3. Culture Influences All Aspects of a FirmA MAJORITY  of respondents, just over 50 percent told the researchers that they believed corporate culture influenced productivity, creativity, profitability, value and growth.The researchers noted a marked passion among respondents about the effects and importance of corporate culture.4. A Hunger for Greater Understanding of CultureTHERE was a certain amount of contradiction contained within the findings. For example, while 78 percent said culture was one of five things that made their firms most valuable, it can hardly be ignored that only 15 percent of respondents felt their own corporate culture was exactly where it needed to be. Clearly, there is still a degree of misunderstanding about the importance of corporate culture.In addition, 70 percent of respondents agreed with the researchers’ statement that “Leadership need to spend more time to develop the culture.”This would seem to chime with the findings of the most recent Edelman Global Trust Barometer. That  data suggests that traditional modes of aloof ‘top-down’ hierarchical leadership are no longer relevant. With  trust in politicians waning, this may be  an opportunity for corporates to build a culture alig ned with the values of a populace that is looking to business to take a more visible and leading role in communities.CLEARLY, it will be some time before we reach a point of synthesis between the findings of researchers and the willingness of corporates to engage with the data. The true power of a properly defined business culture will not be defined, understood and harnessed overnight.But for businesses at all levels, it will be a worthwhile wait. Finally, all businesses will be able to truly understand the benefits of corporate culture.Having released its preliminary results at the end of 2015, the research team is, as Prof Graham says, in many ways only just at the beginning of its process.“Our research team is just getting started synthesizing the thousands of detailed insights that the executives provided, and we look forward to many new discoveries in the months ahead. Importance of Corporate Culture Why it Needs a Fresh Look Importance of Corporate Culture: Why it Needs a Fresh Look Image Source: iStockTHERE are many reasons why people in general  feel uncomfortable about corporates, and why  they tend to  downplay the importance of corporate culture, and even to jettison also some of its best principles.  Much of this is rooted in misconception, but also in a high number of scandals that have erupted in corporates over the past two decades.At one  point in the career path of this  AGENT correspondent, there was a shift in career, from working at a large firm in a city to a rural-based small enterprise, and one of my colleagues almost literally turned green with envy.  â€œI think you’d probably be better off in a small businessâ€"there seems to be a bit more care and respect for individual employees and their needs, than what you’d get in a big, faceless, corporate bureaucracy,” the colleague said.  It was clear that this colleague’s  experience of corporate culture, whether perceived or actually experienced, was somewhat less than positive.But this  is why the recent work by leading researchers at Duke University’s Fuqua School of Business is so welcome.  Unfairly, “corporate culture” is a term that is freighted with negative connotations, perhaps because it is used most often at times of crisis or scandal within big corporations. In those circumstances, it is used either derisively by critics of such companies or defensively by the representatives of those selfsame organisations.However, the term is prevalent enough for the Duke researchersâ€"Prof Jillian Popadak, Prof John Graham and Prof Campbell Harveyâ€"to join forces with Shiva Rajgopal of Columbia Business School, and in partnership with CFO Magazine and COLE, the Fuqua/Coach K Center on Leadership Ethics, to attempt to illuminate something that has been heavy on vague talk and rather light on tangible, measurable specifics.As Prof Harvey puts it, this fascinating research project attempts to assign a measurable value to something that up until now has not been avail able through perusal of quarterly company reports. In other words, it makes public and available to a broad but discerning business audience, scientific evidence about the importance of corporate culture.The 13-month research project involved the questioning of 1,800 CEOs and CFOs internationally (1,400 of them from North America and Canada); and interviews with executives at 20 large firms (with average sales of $50bn).Prof Harvey also told Fuqua news service on the release of the initial findings at the end of last year, that the research also amounts to an effort to “change the conversation” about corporate culture.“It is a puzzle,” he said “that if culture is so important to value, why do we hear very few CEOs talking about it? Most often, talk of culture arises after a disasterâ€"such as the VW emissions scandal,” he said.By attempting to move the discussion outward and away from narrow, and negative, associations with dubious business practice, and towards an under standing of how a properly defined business culture can benefit organisations of all sizes.A rigorous approach to devising a culture that clearly outlines what is expected of employees at all levels can only lead to greater efficiencies, whether the organisation is a conglomerate, and perhaps even more so if it happens to be an operation in the SME sector.Here are 4  fascinating things to emerge from the initial findings of the project. (adsbygoogle = window.adsbygoogle || []).push({}); 1. Belief in the Importance of Corporate Culture is StrongMORE than 90 percent of the respondents said that culture was important at their firms, with 92 percent of the view that their respective firm’s corporate culture would improve the company’s value.Also, 78 percent said that culture was among the top five things that made their respective companies valuable.In a field that previously was most notable for its vagueness, the widespread belief in company culture’s existence, and its importa nce, is a valuable starting point, to say the least.2. Even the Broad Definitions are PositiveTHE respondent executives defined culture, variously, as a company’s tone, its operating style, standard of behaviour, and even as an invisible hand that steers the firm.Respondents tended to locate their definitions of corporate culture in a sense of shared values between personnel at companies, which guided collective and individual decisions.As researcher Shiva Rajgopal says, this amounts to “systematic evidence â€" perhaps for the first time â€" that effective cultures are less likely to be associated with short-termism, unethical behaviour or earnings managements to pad quarterly earnings”. (adsbygoogle = window.adsbygoogle || []).push({}); 3. Culture Influences All Aspects of a FirmA MAJORITY  of respondents, just over 50 percent told the researchers that they believed corporate culture influenced productivity, creativity, profitability, value and growth.The researchers noted a marked passion among respondents about the effects and importance of corporate culture.4. A Hunger for Greater Understanding of CultureTHERE was a certain amount of contradiction contained within the findings. For example, while 78 percent said culture was one of five things that made their firms most valuable, it can hardly be ignored that only 15 percent of respondents felt their own corporate culture was exactly where it needed to be. Clearly, there is still a degree of misunderstanding about the importance of corporate culture.In addition, 70 percent of respondents agreed with the researchers’ statement that “Leadership need to spend more time to develop the culture.”This would seem to chime with the findings of the most recent Edelman Global Trust Barometer. That  data suggests that traditional modes of aloof ‘top-down’ hierarchical leadership are no longer relevant. With  trust in politicians waning, this may be  an opportunity for corporates to build a culture alig ned with the values of a populace that is looking to business to take a more visible and leading role in communities.CLEARLY, it will be some time before we reach a point of synthesis between the findings of researchers and the willingness of corporates to engage with the data. The true power of a properly defined business culture will not be defined, understood and harnessed overnight.But for businesses at all levels, it will be a worthwhile wait. Finally, all businesses will be able to truly understand the benefits of corporate culture.Having released its preliminary results at the end of 2015, the research team is, as Prof Graham says, in many ways only just at the beginning of its process.“Our research team is just getting started synthesizing the thousands of detailed insights that the executives provided, and we look forward to many new discoveries in the months ahead.