Those who have the right corporate culture are also successful. That is now proven. Yet what exactly is the “right” corporate culture? How can it be found? Niklaus Wildberger, Managing Director of the management consultancy TTE Strategy, talks about misconceptions in today’s culture debate and ways of approaching the complex subject.
What makes a good corporate culture?
Niklaus Wildberger: In my view, it is difficult to determine whether a culture is “good” or “bad” per se. From the company management’s perspective, it is much more interesting to ask whether the culture embraced within the company is congruent with the business model and corporate aims. In other words, is the culture functional? If my declared aim is to maximize profit and minimize costs, but I then create a culture that is committed to harmonious interaction, that is a mismatch. Or if I promise my customers “constant high performance,” but overemphasize the value of free time in the corporate culture – I have seldom seen it possible to marry the two ideas. Culture then starts to be dysfunctional. It ultimately has a negative impact on the company’s success.
But doesn’t good culture mean harmony, attentiveness, and fairness? Or other attributes and values that management consultancies like to propose to improve the corporate culture?
Niklaus Wildberger: The public debate has already very much homed in on these “good” values. And I must also say that such values are important to me. But then aspects such as competition, speed, and full commitment to the customer also come into play in my profession. However, the situation for others is completely different: Those who are particularly ambitious and quickly want to get ahead may tend to be hindered too much by harmony and attentiveness. You have to be careful not to lump together people’s needs, irrespective of the trends currently being debated in the public sphere. Above all else, the corporate culture must create some kind of value at operational level. That has to be the focus of attention when establishing it. I recommend initially taking a levelheaded approach to the task without allowing yourself to be overly influenced by ready-made templates. Values must be set and balanced in relation to one another.
It sometimes feels as if everyone is talking about culture. Yet everyone has a different understanding of it. Isn’t the whole subject perhaps just a trend in which too much energy and thus also money is invested?
Niklaus Wildberger: Time and again I am confronted with the inadequate or even completely nonexistent definition of culture. Everything is thrown into the same pot with other trends such as purpose and vision, corporate strategy, or the management model. Those who then start to work on culture will get stuck relatively quickly with such an unclear image. They are also susceptible to being convinced of the merits of the harmony approach as outlined above as a panacea. Incidentally, the world of science is constantly grappling with new and controversial definitions. One possible definition, which I consider to be both plausible and pragmatic: Corporate culture describes the mode of behavior and the interaction of people among themselves within an organization and with third parties, shaped by the company’s business model, aims, structures, processes, framework conditions, and tradition. Such a definition also makes clear that the company management can significantly influence its own culture. The relevance of culture to success has been proven scientifically and in observations many times over. That is why culture is not just a trend theme. It is a subject that will shape companies over the coming decades.
So the company management can influence the culture. This is contradicted by the fact that many cultural and leadership models have been developed in recent years. In many cases, it has had zero effect on the culture. How is this reconcilable?
Niklaus Wildberger: Models that serve as guiding principles are important. In many cases, however, people have sat in their ivory towers and considered how they would like to be seen. This has no effect because merely issuing new solutions does not bring about any change in behavior. If companies want to change the culture, they must specifically work on the areas that I have already set out: change their aims, adapt structures, and redefine processes. Those who produce hard facts will establish that this will little by little lead to changes in the behavior of their own team. The challenge is to define the right areas and carefully examine the extent of the work that needs to be done to bring about the desired change in behavior in each case. You will not turn a harmony-based culture of understanding into a high-performing team overnight merely by setting excessive aims and incorporating previously nonexistent sanction mechanisms into the processes. Their new rules will nonetheless lead to a change in behavior, but perhaps in a completely different direction. More specifically, the team will react ‘petulantly,’ become cynical, lose its identity, and drop its performance level. Ultimately, it is important to me for managers to realize that they must set an example by embracing these changes in behavior. Otherwise it just won’t work.
Where should a company start if it wants to reposition its culture?
Niklaus Wildberger: The changes must intertwine at every juncture. We have not yet spoken about the purpose of the company. That is why companies should always start here, because purpose and goals must be congruent with one another in order to form a coherent business model. The structure and processes should be geared toward these. It is important not to think about all of these elements in isolation, but instead understand that they constantly influence each other, which is why they must cohere. Since this is so complex, a cultural project is not just the new guiding principles or process redesign that can be completed in two months. Changing the culture is a complex, lengthy, and highly strenuous process. Nobody should be under any illusion about that. It is about the very core of the company. People should approach the task of changing their own culture with this clear expectation, perhaps also with a little humility.
TTE Strategy