The Power of Corporate Culture: How leaders can change it purposefully

The fundamentals of corporate culture

In order to understand the basics of corporate culture, we must first understand the term “culture” itself: A culture always develops through the actions of people within a society. A company functions like a miniature society in which an individual and specific value system prevails.

Corporate culture is reciprocal, which means: on the one hand, the culture is shaped by the people within the company – but on the other hand, it also exerts an influence on the people themselves.

The social system within a company makes various experiences over time that directly influence the emerging culture. This happens either through passive or through active processes (for example, discussions).

The basic assumptions of a corporate culture build up:

• Assumptions

• Settings

• Beliefs

• Values

• Images of humanity

Culture itself has an impact …

… inwards: How does it feel to work in the company?

… to the outside: How is the company perceived?

The most important components of the corporate culture are:

• The fundamental beliefs

• The values of the company

The advantages of a positive corporate culture

Companies clearly benefit from a strong corporate culture – in many ways:

Security

A strong corporate culture gives employees security and stability and provides a trusting environment. This leads to employees being able to better develop their potential and feel that their performance is part of the company’s success. A strong connection to the company also leads to fewer resignations.

Orientation

The values and beliefs of a positive corporate culture create a clear framework within which employees can act. It becomes clear which actions are desired and supported – and which do not correspond to the existing value system.

Freedom

Your company’s value system brings another advantage: control measures are hardly necessary. This in turn increases the effectiveness of your employees – because monitoring often inhibits work performance.

Effectiveness

If all employees are aware of the corporate culture, projects can be tackled together, faster and, above all, more effectively. This allows you more flexibility to react to events.

Authenticity

A strong corporate culture automatically ensures that your employees also represent it to the outside world. The result: your company is perceived as particularly authentic by customers or partners.

Team spirit

Shared values, shared convictions, a common goal: This strengthens the team spirit of your employees – and at the same time the intrinsic motivation of all involved. Even difficult problems can be tackled easily this way.

Corporate culture: The role of the leader

Leaders are deeply woven into the corporate culture and lead according to the prevailing (unconscious) values, beliefs, and assumptions. Culture cannot be changed directly, but through changes in interaction. Leaders can actively and consciously change how conversations happen, meetings are conducted, decisions are made, information is shared, and feedback is given.

The manager’s job is to lead their employees with a strong ethical compass – and to embody the culture of the company in the process. If you like, leaders are the architects of corporate culture. Their actions, communication and leadership skills are critical to creating and sustaining a positive and strong culture within a company. Companies should therefore ensure that their leaders not only have the necessary skills and qualifications, but also actively live and promote the values and principles of the desired corporate culture.

Strategy for shaping the corporate culture

A cultural change in a company is not always easy. But in six steps, managers can lay the foundation for change.

Analysis

Analyse the existing corporate culture. What do you experience positively, what negatively?

Define culture

How should the corporate culture develop? What is the ideal goal?

Formulate goals

Set SMART objectives: specific, measurable, attractive, realistic and time-bound.

Change strategy

What has to be changed in order to permanently change the behaviour of the employees for the better?

Dramaturgy

In what order must the implementation of the changes take place? When will who be involved?

Accompany process

Accompany the process until all goals are achieved. Set a good example and play an active role in shaping the process.

Shaping corporate culture: What challenges arise?

Culture change is a complex process that takes time and resources. It also creates some challenges that leaders need to address.

Resistance to change:

Challenge: Employees can often be sceptical of changes in the company culture, especially if the previous culture is deeply rooted.

Solution: Clearly communicate the reasons for the culture change, involve staff in the process, create understanding and awareness of the need for change.

Lack of leadership participation:

Challenge: If leaders do not actively support and live the culture change, employees may perceive the process as untrustworthy.

Solution: Leaders should act as role models, demonstrate the desired behaviours and actively participate in the culture change.

Lack of resources:

Challenge: Culture change requires time, money and human resources that may not always be sufficiently available.

Solution: Allocate adequate resources to support training, education, staff participation and other cultural promotion initiatives.

Unclear goals and vision:

Challenge: Without clear goals and a clear vision for culture change, employees feel disoriented.

Solution: Define clear culture goals and clearly communicate the vision for the desired culture to guide staff.

Lack of communication:

Challenge: Ineffective communication about culture change can create uncertainty and misunderstanding.

Solution: Regular and transparent communication that explains the reasons for change, tracks progress and involves staff in dialogue.

Lack of clarity about changes:

Challenge: Employees feel insecure – what exactly is changing in the culture and how does this affect their daily work?

Solution: Create clear guidelines, examples and training to explain how the culture changes affect their tasks and interactions.

Lack of perseverance:

Challenge: Culture change is a long-term process, and companies often lose patience as soon as results are not immediately visible. Or: after the first positive results, they hastily declare the process completed.

Solution: Show perseverance and patience, monitor the process and celebrate small successes to maintain motivation.