COMMENT The first question investors and team members ask about a company is “What’s the strategy?”. But it should be “What’s the strategy and how is the company culture?”
Strategy and culture are among the primary levers at leaders’ disposal in their quest to maintain a company’s viability, relevance, profitability, effectiveness and, ultimately, longevity. But strategy alone accomplishes nothing. I believe leaders need to focus more attention on culture.
Strategy offers a formal logic for the company’s goals and orients people around them. Culture expresses goals through values and beliefs and guides activity through shared assumptions and group norms.
Unfortunately, it is far more common for leaders seeking to build high-performing organisations to be mystified by culture. Many either let it go unmanaged or relegate it to the human resources or marketing functions, becoming a secondary concern for the business. The leaders may lay out detailed, thoughtful plans for strategy and execution but their plans fail because they don’t understand the business culture or dynamics. As esteemed management consultant Peter Drucker said: “Culture eats strategy for breakfast”.
Purpose, not profit
Culture is a group phenomenon. It cannot exist solely within a single person, nor is it simply the average of all individuals’ characteristics. The culture at any company sets expectations for how people behave and work together and how well they function as a team. Culture defines whether people want to join a company and whether they want to stay.
The quickening pace of innovation means that products and business models face the constant threat of being replicated. But culture is inherently difficult to copy. The ultimate competitive advantage is a healthy culture that adapts automatically to changing conditions to find new ways to succeed. You can copy Google’s benefits for their people but would you have the “Googler’s” culture?
The more people feel appreciated and valued, the harder they work to succeed and thus help the company succeed. Companies with a healthy culture also see less turnover and lower levels of absenteeism, which can directly impact the company’s bottom line. And so culture has a direct impact on performance and, more importantly, on people’s wellbeing.
The most profitable companies are not actually the most profit-focused. Studies show that through switching their target from profit to purpose, everyone in the business gains greater fulfilment, which in turn increases productivity, efficiency and results.
Levelling up the office
My view is that the office is the physical manifestation of a company’s culture. This isn’t about putting a table tennis table in the corner, offering free beer and thinking you’re done; this is about intelligent, deliberate design with each specific company’s unique culture in mind.
We have gone through an unprecedented period, but the trends were already here from the office market’s point of view. People already didn’t want a lousy office and would resist working for companies with one. The voice has just got louder, and companies will lose team members to more mindful competition.
The pandemic saw many of us working from home, which was great for certain tasks, but it really fails on others. As a friend put it: “my team can survive but not thrive”.
A good office helps build a strong company culture and has spontaneous conversations that can help people spark creativity, build relationships, share knowledge and grow professionally.
Aside from the benefits of a good office, there are potentially severe mental impacts from WFH. The Office for National Statistics reported one in five Britons reported symptoms of depression, compared with one in 10 before the crisis. The Health Foundation placed the figure closer to 70%, with stress, anxiety, insomnia and boredom all contributing to mental health issues.
Companies will increase engagement greatly if they manage the physical aspect of their culture and get the right environments for their teams to grow, learn, collaborate and evolve. The office has to level up and leaders have to manage for and champion a positive, healthy and people-centric culture.
Chris Davies is chief executive at Uncommon
