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Strong Culture is Essential

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In this second of a series of blogs regarding characteristics of successful companies I will focus on the valuable role of the company’s culture.

What is a corporate culture?

The concept of ‘culture’ reflects the ability of a company or a nonprofit to define itself by the shared customs, institutions, processes, goals, values and achievements that everyone in the company embraces. By having a common set of stated core beliefs, the company  can behave more consistently and reliably.

Teamwork builds cultures

Skilled leaders cultivate their teams, knowing that a great company is founded on its people and its principles. In the Harvard Business Review (“HBR”) case study entitled, “The Profitability Chain,” the case is made that companies sustain consistently high performance based on having dependable, loyal customers.

The report goes on to state that loyal, satisfied customers are the result of great customer service delivered by loyal and dedicated employees.  HBR connects the dots between culture/employee attitudes and customer loyalty /profits. There can be little doubt that those companies that nurture a culture that recognizes, rewards and values their employees have a significant advantage over competing companies that cannot similarly point to their own strong culture and employee commitment.        

Successful companies rely on powerful cultures

Cohesive cultures demonstrate similar characteristics such as effective communication channels, commonly upheld values, flexibility, shared responsibilities and ownership (no one says ‘that’s not my job!”), opportunities, training and tools for personal growth, support for quality work-life balance and a genuine focus on change and a willingness to embrace innovation.

Smart leaders urge employees to move beyond status quo, to try out new ideas, to make and recover from mistakes, and to respect each other above all else.

The reward for their efforts is found in the low employee turnover and high retention rates they enjoy. These ratios subsequently lead to the much greater consistency, efficiency, effectiveness and profitability that are the basic building blocks of long standing legacies.

John Mellage, CPA
Sobel & Co.
john.mellage@sobelcollc.com