Elements of Good Corporate Culture
This article explores how good culture can lead to company success by focusing on motivation, loyalty, and ethicality.
Good culture fosters good people. Good people create positive change.
As a third-year college student soon to enter the workforce, I’ve been contemplating what I care about most in the company I work for (ie reputation, compensation, experience). Though all of these matter, I realized that culture matters the most for these three reasons:
- Motivation
- Loyalty
- Ethicality
Good corporate culture allows individuals to form a shared identity with like-minded people. By aligning individuals with the organization, these three factors drive employee value creation from which benefits ripple across the stakeholder model.
This article analyzes how good corporate culture creates opportunities for success.
Motivating employees with freedom and respect
When trying to understand a company’s culture, my first visit is to the company’s pillars. From all the words they could’ve chosen to describe their mission and values, why these?
Let’s take Netflix. Their outlined nine values are:
Condensing these values into a sentence:
Netflix guides its employees to make decisions with selflessness, own their decisions with judgement and courage, work with passion and integrity, think with innovation and curiosity, communicate those thoughts effectively, and treat others with openness and inclusivity.
In this phrase, we observe Netflix’s emphasis on freedom and responsibility, a common theme across the company. Growing from a small business to a $130B mega player, Netflix strives to stay nimble and startup-like. Contextualizing these words with Netflix’s story shows that Netflix emphasizes individuality for its employees in order to move swiftly like a startup. And in No Rules Rules, written by Netflix cofounder Reed Hastings and Erin Meyer, employees tell stories of how they provided feedback openly to each other and their bosses, signed billion-dollar contracts without oversight, and drew creative insights and inspiration from frequent vacations.
Prospectives would want to work in a company like Netflix because it provides this freedom to make decisions and explore new horizons rather than restrictions with red tape and dominating oversight. Good culture motivates employees by respecting their individuality and freedom.
Building loyalty with passion and a vision-driven story
Humans love stories. Timeless stories like Harry Potter, Sherlock Holmes, and the Mahabharatha capture our attention and entertain us while effectively delivering their message. In fact, the Epic of Gilgamesh, one of the first recorded stories dating all the way back to 1600 BC, is still read today. Stories are the most effective communication method for humans, timeless and attention-capturing in nature.
Companies with good culture center themselves around seminal stories which capture their vision and how they strive to achieve it.
Let’s talk about Nike. Nike’s mission is to bring inspiration and innovation to every athlete in the world. Outlined in Nike founder Phil Knight’s memoir Shoe Dog, Nike’s story starts as an idea to introduce Japanese shoes to the American markets. As Knight finds innovators like Bill Bowerman, his experimental college track coach, he builds Nike with a vision of increasing a runner’s speed with innovative shoe design.
In the memoir, one early story exemplifies Knight’s dedication to his mission. Bob Woodell, a Nike employee and disabled former track star, and Phil Knight were staffing their new office when, 5 min before closing, a high school student walked in looking for running shoes. Knight and Woodell spent an hour after close with the customer, understanding his running technique, recommending different shoes, and helping him narrow down on a pair. The customer ultimately said he didn’t want any shoes and left, leaving Knight and Woodell with tons of cleanup. But no matter how many of these customers he faced, Knight never gave in and persisted in realizing his vision. Reading about him working with his customers, one clearly sees his passion for shoes and running and his desire to help. And his employees show the same drive and passion.
Moral of the story: Passion is contagious and stories that exemplify and preserve it allow its spread to employees. When employees are motivated by freedom and respect and impassioned by vision, they become loyal employees. They don’t work for money: they work to realize the vision.
Fostering ethicality to achieve the purpose of business
Law is to Justice as Medicine is to Health as Business is to ……what…… ?
In Thomas Donaldson’s Toward a Theory of Business, he fills the blank with “prosperity,” or more precisely, “optimizing collective value.” He outlines that the purpose of business is to fulfill societal needs and be a positive force for the betterment of society. As he decomposes “theory of business” into “theory of the firm”, he proposes that firms can achieve their purpose for good through having corporate social responsibility and a value-driven mission.
A prime example is Ben & Jerry’s. Ben & Jerry’s Ice Cream started in 1978 in the small town of Burlington, Vermont. Since its inception, Ben & Jerry’s worked to support society: they empower grassroots movements (sourcing their ingredients from local farms, funding community-oriented projects); they practice brand activism (naming ice cream flavors and speaking out to highlight societal issues).
For an employee, a brand that demonstrates care about more than materialistic profits stands out. This is distinct from the consumerist argument that ethicality affects purchases (many customers still buy products from companies they know are unethical due to their strong value propositions). The employee wants to know that their work product is contributing to something useful. In addition, they also search for a corporate ecosystem in which they can grow—not just in skills and status, but also as a human. In a company like Ben & Jerry’s, employees know that they contribute to societal betterment while simultaneously bettering themselves. They know that they are creating and extracting intrinsic value.
It’s all about nurturing belongingness
Good work culture creates a sense of shared identity and cohesiveness between the employee and the leadership. When an employee feels like they belong, trust in the vision, and wholeheartedly support the means to achieve it, they will work their hardest to drive the company forward. Through motivating employees, building loyalty, and fostering ethicality, companies can build a work culture that attracts top talent and effectively inspires them to create a positive force for change.
