The Unbelievable, Critical, Never-Ending Role Of Culture In Business

If there’s one topic I’ve learned to respect in business, it’s the critical role of culture. And this word, which many people define in different ways, almost always defines business performance, success, and even failure.

Over the last two years we have convened eleven in-depth, multi-week design meetings with more than 3,000 HR professionals. (We call this The Big Reset.) And in these meetings we have frank and honest discussions about hybrid work, wellbeing, and technical topics like hiring, skills, career development, diversity, and pay.

And the one thing that comes out of these meetings, which I always find inspiring, is the way different HR leaders talk about their company culture.

We have learned a lot from this effort. Not only has “response to the pandemic” been very much “culture-defining,” but now, as the economy slows, we are seeing an even more urgent focus on the topic.

Is your CEO and CFO worried about “productivity” and if so does that mean layoffs, more pressure, and an “up or out” performance process?

Or is your CEO focused on growth, innovation, and learning? I just finished a big meeting with L’Oreal, one of the most successful luxury brands in the world. Their entire people strategy is based on development of new skills, driving teamwork and inclusion, and championing “simplicity” in the quest to be “The most inclusive, innovative, and inspiring People Driven Company to create the beauty that moves the world.”

This statement itself represents the company’s culture, and I will tell you they live this culture every day.

This week we are launching a comprehensive Culture and Performance Playbook which summarizes what we learned. And what you’ll find are things that don’t seem obvious at the start.

Culture, at it’s core, is “what we value” in our company. Do we celebrate sales and revenue growth? Are we in the business of delighting customers or making the world more beautiful or happy? Or are we the “creative innovators” that pride ourselves on new ideas?

I’d suggest that these cultural decisions are often deeply ingrained and very hard to change. Most successful companies develop a culture that starts with their founders. Disney, a company we all admire, was built around a culture of “creating magic.” Our company just visited Disneyland for an offsite and I realized that even today Disney is still in the business of “creating magical experiences.” And that core culture has manifested itself in theme parks, movies, games, and even sports.

We, as HR and business leaders, have to “live and breathe” in this culture. But that doesn’t mean we can’t talk about it, challenge it, and even change it. Some of the most fascinating turnaround stories we’ve observed are with companies that let their culture slip, overly focusing on financial growth, and slowly lost their core. These companies “rediscover their culture” and then thrive again (Lego Group comes to mind).

And let me add one more anecdote. When I met Edgar Schein, the late pioneer author on corporate culture, I asked him “what is the #1 thing that drives positive corporate culture?” He said something profound: “in great companies people help each other.” In other words, if you create clarity of culture and you reinforce the importance of the mission, everyone will work together to drive results. As you’ll soon read in our new research on rewards, pitting people against each other to hit individual goals does not make a company Irresistible.

Let me simply offer this: please read our new Culture and Performance Playbook, and talk with these issues with your team. Whether you’re an HR leader, a business manager, or even an individual team mate, a discussion about culture will always take you to a better place.

And for those of you who want to learn more, our new Josh Bersin Academy Certificate Program on Change Agility, which gives you extensive stories about culture, will get you on your way.

Additional Information

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