A strong corporate culture is key to sustainable organizational development and creating a competitive advantage. Corporate culture consulting plays a crucial role in employee engagement and improving work efficiency. This article will guide businesses through important steps to build a successful and sustainable organizational culture.
What is Corporate Culture? Why is Corporate Culture Consulting Needed?
Corporate culture plays a pivotal role in today’s business environment. It profoundly influences the behavior, attitude, and productivity of every individual within the organization. Furthermore, corporate culture is also key to creating differentiation and a unique identity for each business compared to its competitors. According to a PwC survey, over 60% of 2000 CEOs believe that corporate culture is more important than a company’s strategy or operating model.
Correctly Understanding the Concept of Corporate Culture and its Value to the Organization
Simply put, corporate culture is a collection of cultural values that a business has built throughout its existence and development. These values form the rules that govern the operations, thoughts, behaviors, and attitudes of every member within the company. These elements create a unique identity and profoundly affect the development of the business, and are considered the characteristic traditions of each organization.
Purpose of Corporate Culture Consulting
Corporate culture consulting helps organizations build, strengthen, and disseminate culture to the entire team, thereby:
- Emphasizing and Guiding Core Values: Consulting for corporate culture development helps identify and reinforce core values, thereby creating a strong and clear cultural foundation.
- Enhancing Work Performance: A positive corporate culture helps improve morale, increase employee engagement and motivation, thereby boosting work efficiency.
- Reducing Internal Conflicts: Corporate culture development consulting helps create a harmonious work environment, minimize internal conflicts and disputes, and improve relationships among employees and between employees and leaders.
- Increasing Customer Satisfaction: A positive and clear corporate culture helps improve the quality of services and products, thereby increasing customer satisfaction and loyalty.
- Attracting and Retaining Talent: Businesses with a good culture will easily attract and retain talented and capable employees, as they always seek a positive and supportive work environment.
- Guiding Development Strategy: Helps guide and develop strategies aligned with the organization’s values and goals, ensuring sustainable and long-term growth.
- Creating Competitive Differentiation: A unique and strong corporate culture will create differentiation from competitors, helping the business stand out and maintain its position in the market.
- Promoting Creativity and Innovation: A corporate culture that encourages creativity and innovation allows employees to freely propose new ideas, improve processes and products, thereby fostering continuous development and progress.
In summary, corporate culture is not only an important factor in building a positive and effective work environment, but also a foundation for businesses to achieve sustainable development and long-term success.
The process of cultural development requires a corporate culture consulting firm for the following reasons:
- Expert Team: Corporate culture development consulting firms typically have a team of experienced experts with deep knowledge of methods, tools, and strategies for building organizational culture. These experts are capable of analyzing, evaluating, and proposing suitable solutions to optimize corporate culture.
- Experience and Achievements: Consulting firms often accumulate extensive experience from working with various businesses across different sectors and scales. This experience helps them understand the challenges and opportunities each business faces, thereby providing the most optimal solutions.
- Database and Research: Consulting firms often possess rich databases and market research, enabling them to provide information and analysis based on objective and accurate data. This helps businesses make decisions based on scientific evidence and proof.
- Objectivity and Independence: Consulting firms typically ensure objectivity and independence in their analysis and recommendations. They not only view from an internal perspective but can also provide an external view, allowing for a comprehensive and honest assessment of the organizational culture.
These factors together create the professionalism and effectiveness of consulting firms, bringing clear benefits to businesses in building and developing a strong and sustainable organizational culture.
Typical Mistakes When Building Corporate Culture
58% of companies do not regularly review and reassess their corporate culture, leading to a mismatch between the current culture and the strategic goals of the business (According to SHRM). This is just one typical mistake in the process of cultural development within an organization.
Below are some common mistakes businesses make when building and developing their culture:
Inability to Disseminate When Core Corporate Culture is Not Understood
If businesses still perceive corporate culture as merely agreed-upon values like vision, mission, and core values, this could be the first mistake they are making. The inability to disseminate corporate culture within the team when its core is not clearly understood is a major challenge.
According to a Deloitte report, 56% of employees believe that corporate culture is not clearly communicated and consistently implemented throughout the organization.
Even if employees have been taught and educated about these core values, to the point where they can recite them by heart, if they lack the fundamental assumptions to apply them in practice, they will lack a basis for problem-solving when issues arise.
The true core of corporate culture is not just superficial elements like vision or core values, but underlying assumptions. A prerequisite for successful corporate culture implementation is coaching and mindset training, along with educating employees about these implicit assumptions. This key helps employees apply core values and goals to their daily actions, thereby effectively solving all challenges the business faces.
Leaders Ambiguous About Current and Future Culture
According to a Harvard Business Review report, 70% of organizations have failed in building corporate culture, primarily because leaders often build culture by interviewing teams to determine their preferred ideal culture, and then create the corporate culture based on those survey results.
However, they often fail to realize that this approach follows personal preferences, while the company’s vision, mission, strategy, and competitive advantage might not align with a corporate culture based on such individual preferences.
To avoid falling into this second mistake, it is crucial for leaders to clearly understand the business’s strengths compared to competitors. This forms the basis for building corporate culture, as cultural values must support and serve these strengths. The future corporate culture must reflect the overall strategy of the business. If the corporate culture fails to do so, it will be without value.
Conflict Between Leadership Style and Future Culture
This conflict highlights the tension between two important elements in the business environment: corporate culture and leadership style. This conflict can arise when the current leadership style is incompatible with or does not support the building and maintenance of a strong and developing corporate culture.
We observe that many leaders in companies have adopted a centralized and non-delegating management style. Even when power is delegated, they still interfere with employees’ work, making it difficult for employees to be self-reliant. This raises the question for leaders: “When will the staff be able to take initiative?”
Additionally, some other leaders have a strategy to promote a teamwork culture but often apply a critical style and encourage competition. This can lead to a loss of team spirit within the company.
One potential solution is for companies to consider long-term development through succession and by fostering a learning environment. However, this can also lead to an overemphasis on cohesion and loyalty, sometimes resulting in a reduced ability to dismiss underperforming employees.
To build and develop corporate culture, top leaders need to adjust their mindset and leadership style, which is not simple. Ironically, this is one of the most common challenges businesses often face. That is also why businesses should utilize in-depth psychological coaching methods to help leaders recognize these blind spots and subsequently change themselves.
Leaders Not Directly Building and Implementing
Should the implementation of corporate culture be delegated to the HR Director, a Vice President, or another position? This is an extremely dangerous issue that leaders should note when building corporate culture.
For effective corporate culture building and implementation, non-delegation is one of the critically important criteria. This ensures that the responsibilities, duties, and authorities related to the work of the top leader are mandatory and irreplaceable.
Although leaders can assign the HR Director or Project Manager to organize and coordinate activities, the person directly responsible for building and promoting corporate culture must be the CEO or Chairman of the Board, not another individual. This helps ensure certainty and continuity in promoting and maintaining the cultural values and objectives that the organization wishes to achieve.
Lack of Consistency Due to “Forbidden Zones”
In large enterprises, a common issue arises when cultural implementation is desired, but “forbidden zones” are imposed. The business wants to implement culture but demands no interference with positions like Vice General Director or Department Head, preferring to roll it out gradually to other teams first, then persuade the aforementioned positions. However, when applying such a requirement, the company is creating a “forbidden zone.”
Businesses should consider solutions to address these forbidden zones instead of avoiding them. Accepting “forbidden zones” will hinder the consistent implementation of corporate culture. Although every business has crucial and sensitive positions, to succeed in corporate culture implementation, we need to find ways to address these limitations rather than avoiding them.
Superficial Communication and Neglecting Mindset
Many businesses have clearly defined their vision, mission, and core values. They believe that merely implementing good internal communication can form corporate culture. However, in reality, many cases show that expected effectiveness is not achieved.
The reason for their failure in building corporate culture is that they do not focus on adjusting employees’ mindset. A correct mindset is the foundation of corporate culture, while communication is merely a supporting tool. If employees’ mindsets do not change, all communication efforts will be empty slogans.
It is crucial to understand that corporate culture is not just transmitted messages, but how employees think and act daily. Standardizing mindset requires a long-term process and commitment from leadership to every employee. When everyone shares a common mindset, corporate culture will naturally be formed and sustained.
Thus, to build a strong corporate culture, it is necessary not only to invest in communication but also to focus on changing employees’ mindsets. This requires persistence, but the results achieved will be a positive and effective work environment.
Weak Leadership Coaching Capability
Building corporate culture cannot rely solely on communication and training courses; it also requires continuous commitment and coaching from leadership. Without consistent guidance and support from all levels of leadership, corporate culture will easily break down.
Firstly, many businesses often begin the culture-building process by organizing training courses on mindset and culture, creating excitement and a positive work spirit for employees. However, after the training phase ends, a common problem is the lack of continuous coaching from leaders.
One of the weaknesses is when leaders stop direct coaching or transfer this responsibility to the HR department. In such cases, the HR Director has to find ways to maintain morale and culture through annual communication activities and events. This often leads to inconsistency and inefficiency, as communication and events are merely superficial measures that cannot replace continuous and in-depth coaching.
To ensure that corporate culture is maintained and developed sustainably, the CEO must directly coach Vice Presidents, and Vice Presidents must continue to coach their subordinate employees. This is a continuous top-down coaching chain, ensuring that the mindset and spirit of employees are always maintained and developed in the right direction.
This also answers the question: “What do we do to maintain culture?” To maintain culture, the root lies in leadership coaching. Only when leaders are truly committed and involved in continuous coaching can corporate culture truly be sustainable and effective. However, the process of building corporate culture requires a range of other factors such as onboarding training, guidance, organizing competitions, and communication efforts. This issue can be concretized through the MVP model:
- M – Mission: Clearly defined mission helps employees understand the company’s goals and reason for existence.
- V – Values: Defining core values that the company is committed to upholding and pursuing.
- P – Principles: Establishing principles and underlying assumptions that shape employee behavior and decisions.
When implementing corporate culture, it is crucial that leaders model the values they wish to promote. Leaders need to provide coaching to identify and support departments that exemplify these values. Future personnel aspiring to advance within the organization must demonstrate commitment to and embodiment of these values.
Specifically, the corporate culture implementation model can be divided into two main parts:
Leadership as Role Models and Coaching (70%):
- Leaders as Role Models: Leaders must embody the values and principles they want to see in employees.
- Coaching: Leaders need to provide coaching to support departments and individuals who serve as role models.
- Departments as Role Models: Pioneering departments demonstrate and implement cultural values.
- Succession of Role Models: Future personnel must commit to and embody these values for advancement.
Internal Communication and Media (30%):
- Videos and Stories: Use videos and stories to convey values and principles.
- Cultural Recognition Policies: Reward behaviors aligned with corporate culture.
- Brand Identity Kit: Logo, slogan, elevator decoration, office workspace.
- Internal Activities: Teambuilding, training, workshops, company trips, internal clubs/associations.
- Culture Handbook and Publications: Guideline documents and publications related to corporate culture.
Steps to Build Corporate Culture
Step 1: Current State Assessment
Firstly, it is essential to clearly assess the current culture of the business to determine its maturity level and specific characteristics. To do this, businesses can use various methods such as gathering direct feedback from employees through surveys or simply observing daily activities and interactions within the company. These approaches will provide a comprehensive and truthful insight into the organizational culture.
If the business is experiencing the following signs, consider them “red flags” that need immediate attention to improve corporate culture:
- Continuous Recruitment: This could be an indication of poor human resource management or employee dissatisfaction and lack of engagement, leading to frequent departures.
- Bad Habits of Both Management and Employees: Including poor discipline, frequent tardiness, delayed work completion, punctuality at work but late start to tasks, etc.
- Poor Internal Communication: Upon entering the office, you notice a silent work environment, lack of interaction, no laughter or communication among employees.
- Management and Employees as Two Separate Groups: Little interaction between management and employees; if any, it’s often one-way communication from top-down.
- Numerous Protracted and Ineffective Meetings: Disciplinary measures are proposed but not implemented; there is little recognition or reward for employee achievements.
- Lack of Discussion in Meetings: Employees do not speak up to discuss ideas in meetings but chatter privately and loudly right after the meeting ends.
- Fear is Clearly Present: Employees tend to be silent or avoid managers, such as slamming office doors or avoiding sharing elevators with their boss.
These signs indicate a toxic culture that needs immediate rectification to create a more positive and effective work environment. When conducting the assessment, consider multiple perspectives to gain a comprehensive and accurate view. Based on the collected information, leaders can better understand the current cultural situation of their organization, or in other words, the maturity level of their corporate culture.
Step 2: Define the Corporate Ideology
When starting to build a corporate culture, consider what you want to create and begin with the company’s strengths and unique characteristics. When culture is developed based on existing elements, leaders will know how to optimize everything.
There are eight characteristic types of corporate culture worldwide, classified by Harvard Business Review based on two criteria: the level of employee interaction and the ability to respond to change. Below are the percentages of businesses categorized by each type and the Top 2 cultural orientations they focus on:
- Caring Culture: 63%
- Purpose Culture: 9%
- Learning Culture: 7%
- Enjoyment Culture: 2%
- Results Culture: 89%
- Authority Culture: 4%
- Order Culture: 15%
Step 3: Develop a Corporate Culture Handbook
In today’s era, many companies use embellished and appealing language to describe their culture. For example, Enron – a powerful energy conglomerate in the US – once used four keywords to define its core values: “Integrity,” “Communication,” “Respect,” and “Excellence.” However, the eventual outcome was not as expected: Enron collapsed in 2002 due to information concealment, accounting fraud, and deception, creating one of the most notable economic cases in US history.
Therefore, core values should be defined based on what is truly valuable and respected within the business. Below are some questions to help you define your organization’s core values:
- What is the mission, vision, and long-term goal that the business aims to achieve?
- How do leaders want their business to be perceived?
- Do the business goals align with the personal values of the collective workforce?
- What is the intended corporate culture goal?
Step 4: Design Communication Tools
Once we have defined an ideal culture for the business, the next step is how to bridge the gap between the current culture and the goal we want to achieve. To do this, we need to carefully consider four important aspects of corporate culture.
Work Style:
- Work style reflects how we approach daily tasks. This includes working methods, attitudes, and mindsets. To bridge the gap, we need to create an environment that encourages creativity, self-management, and a spirit of collaboration.
- Leaders can promote work style by fostering learning, innovation, and exploration.
Decision-Making:
- Corporate culture influences how we make decisions. To achieve consensus, we need to create an environment where everyone can participate in the decision-making process.
- Leaders should encourage discussion, listen to opinions, and ensure decisions are made based on information and consensus.
Communication:
- Communication is a crucial factor in building corporate culture. We need to create an environment where everyone can share opinions, information, and ideas openly.
- Leaders should promote effective communication, encourage feedback, and ensure information is conveyed correctly.
Treatment:
- How we treat each other affects not only morale but also work performance. To bridge the gap, we need to create a respectful, supportive, and fair environment.
- Leaders should be role models in treating employees well, encouraging solidarity, and building good relationships.
Step 5: Cultural Training for the Entire Team
Establish a Corporate Culture Unit
The leadership board needs to directly guide and supervise the implementation of culture within the business. The responsible unit may include management representatives from various departments and a number of assistants. Sometimes, this authority can be delegated to the Human Resources and Internal Communications department to ensure consistency and effectiveness.
Announce and Communicate Corporate Culture
After establishing general regulations and rules, organize meetings between leaders and employees to discuss the company’s cultural values. These conversations not only help employees better understand the corporate culture but also encourage their participation and commitment. Put yourself in the employees’ shoes to identify and address potential obstacles during the change process.
Stabilize and Develop Culture
Maintaining and developing corporate culture is an ongoing process that requires persistence. Start with specific activities such as:
- Integrate Values into Daily Operations: Emphasize the importance of corporate culture and core values when new employees join. Ensure these values are reflected in the quality of products and services, as well as in marketing and communication activities.
- Implement Specific Cultural Activities: Design office and interior to reflect company culture, use uniforms, establish rituals, organize team-building activities, reward systems, and company trips to foster cohesion.
- Establish a Reward System: Create reward mechanisms consistent with the corporate culture to encourage and recognize positive behaviors and achievements.
- Appropriate Recruitment: Seek candidates who not only possess skills but also fit the corporate culture. The best cultural fit typically contributes more effectively and tends to stay longer.
Building corporate culture requires commitment and participation from all levels of the organization. By establishing a dedicated unit, clearly communicating, and maintaining core values, businesses will be able to create a positive and sustainable work environment.
Step 6: Plan and Implement Cultural Communication
Just like sales or ROI, corporate culture needs to be carefully evaluated by managers. Regularly measuring corporate culture helps you detect and resolve outstanding issues promptly, thereby building a healthier work environment.
Surveys
A common method is to conduct annual surveys, providing an opportunity for employees to give feedback on company values and assess their alignment with daily operations and personal values. Simple email surveys can also reveal what employees like and dislike, helping you shape the company culture based on their satisfaction.
Measure with Metrics
In today’s data-driven era, measuring corporate culture effectiveness can be expressed through specific information and figures. Here are three key KPIs for guiding, improving, and successfully and effectively developing company culture:
- Employee Turnover Rate (ETR): This metric indicates the percentage of employees leaving the company within a given period. A high rate can be a sign of an unhealthy culture.
- Employee Net Promoter Score (eNPS): This metric measures employee engagement and satisfaction, through the question of whether they would recommend the company to others.
- Employee Satisfaction Index (ESI): This is a metric that measures employees’ overall satisfaction with their work, work environment, and company culture.
Assessing corporate culture is not just a periodic task but also an important part of the company’s long-term development strategy. By using surveys and specific KPIs, businesses can create a positive work environment, foster employee satisfaction and engagement, thereby enhancing business efficiency and success.
Step 7: Evaluate Corporate Culture Compliance
Building a corporate culture is a significant challenge, but ensuring compliance with that culture is far more difficult. The culture must be implemented seriously within the company. Leaders must consistently guide and help employees understand the business’s vision and mission. Every company decision and action must be carefully considered to ensure it aligns with the established direction and vision, and short-term gains should not compromise the original mission.
Behind the success of any brand is strong cultural compliance. This is the crucial factor that helps Vietnamese businesses realize their aspiration to reach out to the international market. A culture of compliance is not only a foundation for sustainable development but also a key to unlocking new opportunities in the global market.
Reputable Corporate Culture Consulting Company
SKALE – a member of L&A Holdings, specializes in providing technology solutions to attract the right talent and develop sufficient capabilities to help clients continuously improve efficiency. SKALE Human Capital was formerly the Organizational Consulting and Development department of Le & Associates (L&A), and was merged into SKALE in January 2023.
SKALE is a trustworthy corporate culture consulting firm with a strong, diverse, and experienced team of experts. Inheriting over 20 years of knowledge and experience from L&A, SKALE possesses a deep understanding of various industries, enabling them to develop corporate culture building and development programs best suited for businesses. Additionally, SKALE has developed a corporate culture dissemination application – SKALE Vibe.. SKALE Vibe helps implement emulation movements, recognition activities, idea contributions, etc., thereby increasing interaction and engagement within the organization.
Building a strong corporate culture is a key factor for businesses to maintain sustainable development and foster cohesion within the organization. Investing in corporate culture is an investment in long-term success, helping to attract talent, enhance satisfaction, and build a strong brand in the market. Don’t forget to contact SKALE for corporate culture consulting and other areas in human resource development.
