Source | HRD Connect : By Owain Thomas
The understanding and appreciation of corporate culture and its importance in ensuring organisations are not only profitable but sustainable in the long term may never have been higher than at present.
Owain Thomas considers the best way for HR leaders to embed a healthy workplace culture.
The value of organisational culture is one of the biggest lessons to have been learnt in the corporate world over the last decade, with VW, Tesco and the banking sector all obvious examples of where culture has turned sour and a severe price has been paid.
On some occasions this lesson has been thrust upon an organisation or a sector – whether through market regulation or shareholder action.
But there is also evidence that industries and individual companies are alert to its importance and the platform that a strong, healthy culture can bring.
Of course the starting place for corporate culture is the boardroom and this has been emphasised by the Financial Reporting Council’s (FRC) study, exploring the relationship between corporate culture and long-term business success.
The report explores the importance of culture to long-term value and how corporate cultures are being defined, embedded and monitored.
It makes seven key recommendations that business leaders should practise to install a sound cultural base and recognises that stakeholders and society in general have a vested interest in healthy corporate values, attitudes and behaviours that lead to sustainable growth and long term economic success.
For business leaders, the most important point it raises is that corporate culture should not wait for a crisis to occur – it should be a priority when times are good that will bring resilience in tougher situations.
FRC chairman Sir Winfried Bischoff noted that a healthy corporate culture led to long-term success by both protecting and generating value in the economy.
“It is therefore important to have a consistent and constant focus on culture, rather than wait for a crisis. A strong culture will endure in times of stress and change,” he said.
“Through our research, it has become clear that establishing the company’s overall purpose is crucial in supporting and embedding the correct values, attitudes and behaviours.”
Encouragingly, the sentiment of the FRC’s guidance may already be being utilised by one of the chief targets – the financial services industry.
Following the financial crash of 2008 the financial services industry suffered a massive fall in public confidence.
One of the main reasons was the fallout from the crash and the glut of stories about market failings and irresponsible risk taking that many people felt was a consequence of a corporate culture that had become rotten to the core.