UK: Building A Corporate Culture

Last Updated: 6 January 2014
Article by Guy Rigby

Business leaders and managers must do all they can to ensure that everyone is pulling in the same direction. This comes down to building a corporate culture, having shared values and effectively communicating those values. The point is that shared values create a common direction which makes decision-making far easier, because every decision can be made in line with those values.

Many companies stick motivational messages, mission statements and mottos on the walls of their offices, hoping that by reading these words, staff will automatically begin to exhibit behaviour that reflects the desired values. Unfortunately, as Enron proved with their well-packaged and promoted 'ethical' stance that was later pulled apart by the US Congress, values and actions don't necessarily correlate.

Yet strong values and a real sense of shared purpose can have a huge impact on the quality of the business and its decision-making.

Johnson & Johnson, the multi-national manufacturer of healthcare products and pharmaceuticals, are famous for what they refer to as their 'Credo'. This is a clear values statement and their 'recipe for business success.' It was written in 1943, long before the term 'corporate social responsibility' had even been invented. The Credo challenges staff to "put the needs and well-being of the people they serve first", and provides a guiding philosophy for responsibilities to customers, staff and the wider community. You can look it up on the company's website. It's well worth a read.

Although the language in the Credo is dated, it is taken particularly seriously by the company's management. It is a testament to the fact that the company is one of only a handful which has flourished through more than a century of change. The management commit to practising what they preach and do all they can to ensure that their employees do the same. From providing job security and work-life balance to enabling freedom to provide feedback, they embed these values through their actions, through a decentralised management approach and through the establishment of think tanks, affinity groups and mentoring programmes. Not only do they listen to their teams, they also act on feedback and commit to continuous improvement. There is a mutually beneficial learning process whereby leaders learn from staff and vice versa.

Leaders sometimes need the courage to go against the grain and question established thinking. Sometimes conventional wisdom needs to be broken. Instinct will no doubt pay a part, but seeking and considering team feedback can give leaders the added confidence and support needed to break the mould and gain real competitive advantage.

Johnson & Johnson embraced 'collective intuition' to do just that. Collective intuition is a group dialogue guided by shared company values which leads to a consensus among the team; a blend of feedback and intuition. The power of this collective intuition was harnessed by former CEO William C. Weldon (April 2002 onwards) when it persuaded him to break from the conventional industry wisdom of focusing on a single higher-margin market to take the riskier path of focusing on a broader portfolio of products. The impact of this decision to diversify protected the company from market shifts associated with its core products. And it fast-tracked the company's growth by allowing it to focus on "providing breakthrough products that cure disease and save lives," says William. "Sometimes a leader must be able to endure chaos and appreciate it in order to discover the right thing to do."

Cisco Systems CEO John Chambers is another advocate of collaborative leadership. He has used it to transform his company. Cisco now involves hundreds of executives in making key decisions, rather than the ten top executives that the company used to rely on.

Rather than a formal analytical team meeting, collective intuition goes deeper and derives from continued discussion. As Weldon of Johnson & Johnson discovered, when a group is led by shared experiences and beliefs, it is often drawn towards a specific decision. If the vision and values of a business are strong enough, and truly embedded into the culture, groups will be guided by them.

Where unity is lacking, or where there are an insufficient number of engaged participants, it's wiser to heed your own instinct and balance that out with the feedback you glean. Too many diverse opinions can cause havoc to the decision-making process. As the late Steve Jobs of Apple says, "Never let the noise of other people's opinions drown out your own inner voice." This can be all too common in business. Most successful entrepreneurs will admit to regretting not listening to their inner voice at some point in their careers.

As usual, it's a question of balance. "Every good senior management team and CEO I've worked with has had a range of trusted advisors," says business author Tony Fish. "They listen to all their advice. And then they do their own thing anyway. But they balance it; they take that advice on board when making their final decision."

Further information about culture and values can be found in Guy Rigby's book 'From Vision to Exit – The Entrepreneur's Guide to Building and Selling a Business', available on Amazon and in all good book shops.

Disclaimer

By necessity this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Article correct at time of writing.

Smith & Williamson LLP

Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International.

The word partner is used to refer to a member of Smith & Williamson LLP.

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