Thank you for the positive comments and feedback to last month's newsletter on "A Cure for The Ethics Plague." If you missed it, you can read it here.
Below is this month's featured article on the significance of understanding Corporate Climate, why it matters and how it is one of the key factors in determining organizational performance.
I hope you enjoy!
Davis H. Taylor
Understanding Why Corporate Climate is Critical for Success.
cli·mate (kli met) noun.
1. The meteorological conditions, including temperature, precipitation, and wind, that characteristically prevail in a particular region.
2. A prevailing condition or set of attitudes in human affairs: a climate of unrest.
Years ago, while deployed on a military training exercise, our C141 Transport landed for fuel at a remote airbase in Newfoundland. It was the dead of winter. Snow was piled high around the landing strip and around parking areas. At each parking spot was a wooden stake equipped with an electrical outlet. Few vehicles were present, but each was connected by an electrical outlet plugged into a warming device to prevent freezing radiators in the vehicles.
Later that year, while visiting the National Training Center in the California desert, I noticed military vehicles were specially equipped with mesh to prevent sand from clogging air-intake valves, and each vehicle was provisioned with water rations in the event the vehicle overheated.
Lessons learned? First, climate has a huge impact on the performance of vehicles; and second, specific action must be taken to insure vehicles in a given climate can perform to expectation.
Two questions: Is climatic impact on vehicles any more profound than climate’s impact on people? And, does Corporate Climate have an impact on corporate performance?
Corporate Climate is the “prevailing condition or set of attitudes and beliefs of employees” within an organization. How employees feel about their jobs, the significance of their work, and their relationship with their boss/coworkers... what they believe about standards of acceptable behavior and accountability for results... have a critical impact on the organization’s ability to drive desired and predictable results.
Why? Because our attitudes and beliefs govern our behavior. The sum of employee behaviors determines organizational performance.
Many business leaders believe the right marketing, technological and operational strategies coupled with specific revenue, profit, expense and market share goals, will drive corporate performance. Strategy and goals are important, but are ineffective in driving corporate performance without proper execution by aligned and motivated employees.
To positively impact corporate performance, leaders must influence the attitudes and beliefs of employees at all levels, thereby creating an environment, or culture, that voluntarily aligns employee attitudes and beliefs with those desired by corporate leaders. Without such alignment, no brilliant strategy or worthy goal can be achieved when the climate is favorable.
Based on TAI’s experience working with corporate clients, we discovered the single most important determinate of corporate results is corporate culture... and the corporate culture is determined by willingness on the part of employees to align their attitudes and beliefs with the intent and desires of executive management. This willingness
to align can, and must be shaped by the example set by leaders in the organization. These positive leadership examples then shape and influence the corporate culture creating a favorable climate.
Too many leaders fail to understand the key to their success lies in their ability to grasp the critical relationship between corporate culture and potential for future success. To positively influence performance that matters to corporate results, leaders must understand the realities of their current cultural environment and proactively influence that culture to greater effectiveness.
Corporate culture is the “sum of an organization’s behaviors and practices.” While numerous and various corporate cultures exist, one specific type of culture—a values-driven culture—is proven to deliver extraordinary and sustainable business results. Numerous studies support this fact and are evidenced in the work of Marcus Buckingham, The Gallup Organization; Jim Collins, author of From Good to Great; the Kotter and Heskett study on “Corporate Culture and Performance;” and many, many more.
So why is Corporate Climate important? Unless, and until, corporate leaders understand their current environment, they are powerless to create an appropriate culture. One must understand the current reality before forging ahead to a preferred future. Therefore, creating a Corporate Climate where values-driven attitudes and beliefs flourish...Corporate Climate Surveys are a logical and effective starting point because they help leaders assess the current reality, because they provide a connection between organizational culture and organizational effectiveness, and because they serve as a “guiding light” for appropriate response and positive action.
Most companies have written corporate values—but how many actually live those values? Corporate leaders must operationalize their values to firmly establish an effective corporate culture that both enables and drives desired performance. The first step is understanding your current reality. It’s a small step, yet critical to helping your company avoid—or correct—problems brought on by the Corporate Climate in which you operate.
What about you and your organization? Do you understand your corporate climate? Share your feedback via email.