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Corporate Culture as a Competitive Advantage

Companies which ask themselves how they can strengthen their position amid ever stronger competition should take a look at their culture. Unlike hard competitive factors like, e.g., the price-performance ratio, technical product parameters or outstanding service and consulting, culture is invisible and difficult to measure.

Here is a pragmatic definition of culture: ´Culture is how people deal with each other´. Culture is defined by a company´s leaders, in particular by their behavior in daily business. Colorful wall posters which describe a company´s mission, vision and values remain useless if their messages don´t reflect reality.

Culture is like air - it is everywhere and penetrates everything. As long as the air is good, nobody is aware of it, but when it turns bad, people feel bad as well without knowing why. Culture can be measured indirectly by applying a variety of metrics. These include, e.g., employee satisfaction, personnel turnover, sickness rates and the number of improvement suggestions.

How does culture as a ´soft´ factor contribute to strengthening a company´s competitive position? Here is an example: In an increasingly turbulent world, companies have to adapt permanently. A culture which encourages people to be open, to think out of the box and to contradict their superiors without being asked makes sure that unpleasant truths will not be swept under the carpet, but enter the management agenda immediately. This enables companies to react more quickly to changes and to reduce the risk of taking the wrong decisions.

Can culture be changed? The answer is yes! Change is a process which has to be initiated by Top Management and which, subsequently, has to be driven bottom-up. In a series of structured workshops, people must be given the opportunity to critically comment on the current situation and to pinpoint weaknesses without having to fear negative consequences. The main topics here include, in particular, leadership style, communication and cooperation among departments.

In the next step, concrete actions and responsibilities have to be defined to systematically eliminate the weaknesses identified. By proceeding this way, organizational deficiencies can be overcome quite quickly. What is much more difficult, however, is changing counterproductive personal behaviors like, e.g.:

• Intimidation by colleagues and superiors
• Cutting others short in meetings
• Failing to comply with agreements without sanctions
• Withholding information on purpose
• Killing new ideas immediately

Professional coaching can provide useful support here. However, coaching is always help to self-help. Those who are not willing to change despite all the help offered must be clearly confronted with the possible consequences. In extreme cases, this could even mean that they lose their job!

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