FOCUS ARTICLE

Corporate Culture: Understanding Its Importanceand Reaping Its Benefits
Author: Carlene Smith

Underpinning every aspect of a company, its successes and its failures, is its corporate culture. Despite extensive academic
research on the subject, organisations still make mistakes when it comes to understanding how their culture contributes toperformance outcomes and how it can be improved. A thorough assessment of the status quo and leadership engagement canmake a difference.

Behaviours Are the Bedrock of Company Culture

situations reflect a failure to realise how fundamental culture is toachieving positive outcomes and avoiding disastrous ones. Even

Academic research on corporate culture abounds, but business andwhen a company begins to grasp how culture permeates every

industry still struggle with what it means, why it makes a difference

aspect of its operations, it may not be quite sure how to shape it

and how it takes shape. In some cases, culture is perceived as one

effectively.

of many issues vying for attention alongside safety, productivity,quality, and so on, while in reality it is the underlying frameworkthat supports and determines safety, productivity, quality, etc. There

Why Is Corporate Culture Important?

are also misperceptions about what culture consists of and how it’sinfluenced. For example, an organisation may compile a list ofAs proof that culture determines outcomes, it’s enough to examine

values that appear in induction programs, PR materials and, fromthe causes of any major industrial accident in the last fifty years.

time to time, on posters around the site, giving the feeling that it

The recent Sky dramatisation of the events leading up to thehas played its part in establishing the corporate culture. This

Chernobyl disaster, for instance, vividly illustrates how a highly

approach misses the crucial point that culture is behaviour-based,hierarchical culture and a rigid control and command leadershipan accumulation of actions, not a list of words. Both of thesestyle can lead to catastrophe. Even aside from the fictional

Importance of Corporate Culture - Do We Really Understand It?

reconstruction, experts who have assessed the incident

To fully understand your organisation’s culture and truly make ainvestigation documents from Chernobyl concur that culture wasdifference for the better, the guidance of a specialised third party

to a large extent to blame in what occurred there. Likewise,

may be necessary. The experts at DEKRA have designed a Culture

investigations of the Deepwater Horizon/Macondo disasterof Care diagnostic tool that not only shows organisations whereexplicitly recognise cultural factors as a cause of the fatal explosion.

they stand on the cultural maturity spectrum, but also indicatesIndeed, whether explicitly named or implicitly implicated, culture

how the organisation’s culture affects various outcomes such as

is nearly always a causal factor when things go wrong. Similarly,safety, quality, productivity and other parameters. In addition, thewhen organisations excel, a positive corporate culture is surely indiagnostic indicates areas of development alongside strengths, soplace supporting their success.

that leaders know what to target and how.

“Culture and leadership...are twosides of the same coin.“ -Edgar Schein .

Creating Leaders Committed to Positive Cultural
Change„Organizational Culture and Leadership“.

behaviour and on their management style, whether the goal is toSan Francisco: Jossey-Bass. 1985.

It often turns out that leadership itself is an area of development. In
any case, it is always worthwhile for leaders to reflect on theirtransform or merely tweak company culture. Here, too, enlisting
help can facilitate the process. DEKRA’s Leader Care Profile, forexample, creates a mirror for leaders to look into and understandboth how they perceive themselves and how others perceive them

Culture needs cultivating, and the question is how. Edgar Schein’sin terms of humanity, integrity and competence. Whether leaders

groundbreaking work “Organisational Culture and Leadership”

employ this or some other assessment tool, the goal is tocites culture as leaders’ central contribution and primary job. It is

understand one’s predominant style and then to learn how toleaders’ reaction to crises, their role modelling, their approach toeffectively deploy a range of positive leadership styles depending on

rewards and recruiting – in short, their behaviour – that establishes

the circumstances or the personalities in play.

corporate culture and teaches employees how things are done
within an organisation. From a leadership perspective, accepting

Even with the right tools, expertise, and enthusiastic participation,

this conclusion means taking on considerable responsibility, sincecultural change doesn’t happen overnight. It can’t be compared to

culture is what creates success.

replacing a machine or even restructuring a department, because
culture is embedded in the behaviours of every individual in anLeaders concerned about company culture can begin by reflectingorganisation. Starting at the top, where culture is shaped, is wherehonestly on the current state of affairs. In particular, the answers to

not only training but also intensive coaching has the biggest impact.

the following five questions can be revealing:

Nonetheless, experience shows that a few months after cultural>> What 10 words describe your company’s culture?
>> What’s important in your organisation?
>> Who gets promoted?
>> Which behaviours get rewarded?
>> Who fits in?

maturity spikes, reflecting positive change in leadership andelsewhere, it tends to plateau or even slightly backslide.
Considering the level of conscious effort, it takes to shift behaviour
patterns it’s unsurprising that sustainable progress is a challenge.
Maintaining third party support and repeating the initialassessment on a regular basis is one way to keep new behaviours
front of mind. Ultimately, crisis situations are the true test of how

In some cases, there’s a misalignment between the words awell a company has progressed culturally. That’s when thecompany uses to describe itself and how things are done. For

investment of time and resources in a positive corporate culture

example, if words like “safety” or “teamwork” are mentioned aspays off as companies demonstrate resiliency and excellence evenvalues and yet those who get promoted or earn recognition do sounder adverse conditions.

for increasing profits at any cost or unquestioningly following
orders, then the stated values are at odds with the real life culture ofthe company.

2CARLENE SMITH
Carlene Smith is Consultant, Assessment & Solutions at DEKRA Organisational Reliability
Ltd. She has a master’s in occupational psychology with a specific interest in helping
organisations improve their performance, whether that is in regards to safety, productivityor the organisational culture. Carlene joined DEKRA in 2012 following her undergraduate
degree in Psychology. Carlene’s current role focuses on providing clients with culturalassessments and recommending and developing appropriate solutions to increase cultural
maturity with the aim to create a culture of care.

DEKRA Organisational Reliability
DEKRA Organisational Reliability is a behavioural change consultancy. Working in collaboration with our clients, our approachis to influence the safety culture with the aim of ‘making a difference for the better’. We deliver the skills, methods, and motivation
to change leadership attitudes, behaviours and decision-making among employees. Measurable sustainable improvement of safety
outcomes is our goal. We are a service unit of DEKRA SE, a global leader in safety since 1925 with over 39,000 employees in50 countries.

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