Company Culture and the Center of Experience
Culture is something that is unique to an organization, the time and place it occupies, and the people that belong to it.
The importance of both employee experience (EX) and customer experience (CX) is now well-known, with a majority of companies competing based on both factors for both top talent, and customers. Because of this, a comprehensive brand experience, or customer and employee experience combined, must be achieved by companies. I refer to this combination of EX and CX within the enterprise as a Center of Experience.
Culture is something that is unique to an organization, the time and place it occupies, and the people that belong to it. Because of all of these factors, one could say that each organizational culture is unique and distinct. Never has this been more important, whether we are talking about great leadership or an engaged, motivated workforce. Or as Dr. Jennifer Chatman, professor of management at UC Berkeley-Haas says, “Culture is your strategy execution engine. I encourage leaders to define their strategy first, and once those strategic aspirations are defined, then think clearly about the most important behaviors and values that are going to enable the company to achieve its strategic objectives.[i]”
There are tangible benefits to a healthy organizational culture. While there are a wide variety of statistics on the topic, a recent study by Oxford Economic and Grant Thornton[ii] pegged a difference of 56% between turnover at organizations with a healthy versus unhealthy culture (Figure 2.2).
Figure 2.2: Employee turnover in unhealthy versus healthy cultures
Culture also extends to external perceptions and customer behavior. For instance, 87% of customers’ positive sentiment about Starbucks has to do with the way they treat their employees[iii]. That’s pretty powerful, and a win-win if you ask me. Not only has the company committed to supporting the employee experience, but it is netting tangible results because of it.
The Center of Experience includes an organizational culture assessment that is based on a longstanding framework, the Competing Values Framework, which itself is backed by decades of research and validation[iv]. The COX has added to this original framework by looking at additional elements we know are vital to any organization that will be successful in an environment of continual change and disruption. These additions also have proven return on investment indexes that create additional value in the assessment of organizational culture.
Why is culture so important?
Why is it important that an organization define and measure its culture? We believe that culture is an operating system for how work gets done. Approached as a common platform, when successfully managed, it accomplishes the following:
Determines how leaders lead and how decisions are made
Determines the way that employees interact with each other
Promotes cooperation with one another towards a shared goal over detrimental competition
Guides employees with a sense of direction
Helps employees understand the brand of the company they work for, far better than any “branding” campaign
Unites diverse people under a shared purpose
Promotes healthy relationships and dynamics in the workplace
Allows employees “psychological safety” to put in their best work
While we can all agree that organizational culture health is important, it is often difficult for many within an organization to truly understand when there are issues, and what those issues might be.
Figure 2.3: The disparity between executives and employees regarding company culture.
As part of the Grant Thornton and Oxford Economics study I referenced earlier, it was noted that while over three-quarters of executives say their organization has a well-defined value system (Figure 2.3), less than one-third of employees believe it to be true[v].
The ideal culture
An organization is an ever-evolving organism, with continually shifting priorities and needs. Its organizational culture is a key component that helps its leadership, employees, partners, and customers understand its focus and values.
The organizational culture assessment that accompanies the Center of Experience framework I describe in my latest book of the same name aims to describe the ideal scenario, where a company understands its desired culture, its current perceived state, and has a plan to reach its ideal state.
This ideal state will have a dominant culture, but never a monolithic one. This is important for many reasons, including the value of diversity (people, ideas, and methods), and the need for an organization to evolve and shift over time (so as not to get “stuck” in one way of being).
[i] Berkeley Executive Education. “Culture as a Powerful Leadership Tool.” Executive.Berkeley.edu.
[ii] Grant Thornton and Oxford Economics. “Return on Culture: Proving the Connection Between Culture and Profit” 2019.
[iii] Birkner, Christine. “How Treating Employees Well Boosts Brand Value.” Adweek. May 17, 2016.
[iv] Howard, Larry W. “Validating the Competing Values Model as a Representation of Organizational Cultures.” The International Journal of Organizational Analysis. March 1, 1998.
[v] Grant Thornton and Oxford Economics. “Return on Culture: Proving the connection between culture and profit” 2019.