The term “corporate culture” is not entirely new. The first thorough scientific researches have been made in the early '80s. However, the highly dynamical social and technological environment on the one hand and the complexity in organisation in modern societies on the other, attracts attention to every aspect of a start-up’s development process, not only in terms of technical development but also in terms of organisational culture. This is why the interest for the effects and the impact of the corporate culture on the success of a company is gaining momentum again.
There are countless examples of excellent ideas thereafter turned into perspective projects that haven’t been accomplished successfully. The reason for some of these failures is the market particularity, still, a significant amount of them could be attributed to internal organisational failures. Contrarily, there are many start-ups that succeeded to disrupt their markets thanks to their organisational edge without being based on unique innovations or having created an entirely new business niche.
In any case, start-ups based on disruptive innovation could get additional advantages if they succeed to meet the upcoming organisational challenges in a proper way. For this reason, it is getting even more strategically important for entrepreneurs to set the right tone and manner in which their start-ups solve problems and adapt to the market. A good corporate culture could be a crucial game changer in the process of fulfilling a business idea.
The Fundamentals
Culture itself is a complex term and has many aspects in different contexts. We will use it as the alloy of different norms, beliefs, and behavioural habits within a group of people respectively organisations. Culture has its fundamentals, which from an organisational point of view are even more specific.
For an entrepreneur, the most important step of establishing a strong corporate culture is to state a clear vision. This step is significant for achieving a sound base for organisational success. An explicit vision is the compass, which gives employees a clear direction and improves the entire decision-making process. It fulfils a heuristic function when decisions have to be made in short periods of time with lacking information. We at eCollect, for example, have the vision to revolutionise an entire business sector, developing an intelligent web-based solution, that brings transparency, simplicity, and coherence into receivables management. Every step of our evolution is driven by this intention.
Another crucial milestone in the process of establishing a strong corporate culture is the emergence of the company’s values. This is practically the process of building the DNA of a company. The values are behavioural guidelines which constitute how people and organisations are acting. Having clear defined values, accepted by the employees is probably the most efficient technique to achieve your goals.
Some of our main values at eCollect for instance are:
- Reduce complexity — this approach is helping us constantly to establish new and optimise existing processes very fast and get better and quicker feedback from our customers. Thus we are able to customise our business model and apply it on a variety of markets.
- Be brave and learn fast — we familiarise ourselves with the newest trends and we use cutting edge technologies, as well as data-driven decision making, which gives us the opportunity to automate and modernise an entire business segment.
- Transparency is not a cliché — we have transparent internal and external communication channels. In our case, this increases the flow of information within the company and respectively our productivity. It as well contributes to the better understanding of the needs of our customers. The transparency is practically helping us not only to increase the trust of our customers but also to improve their experience and make our services more holistic.
The values and the vision of a company are the strongest fundamentals in the entire construction. Without them, many young companies are struggling to get the desired traction and are not able to make a benefit from the advantages of the organisational culture.
The corporate cultural fundamentals have not only an ideal aspect but also a practical dimension. They result in different habits and organisational behaviour, which affect directly the development of each company. That is why it is particularly important for start-ups to pay attention to their organisational routines. Here are some practical advantages of having an established corporate culture.
Culture as organisational glue
The whole is more than its parts and the strong corporate culture is the manifestation of the unity in organisations. As Eric Flamholtz and Yvonne Randle (Eric G. Flamholtz and Yvonne Randle, 2011) claim, organisational culture functions as “organisational glue”. This prevents start-ups from building isolated working clusters, where people avoid interaction with others. The corporate culture makes them more flexible and agile as an entirety. Young companies with a strong culture are more prepared for market changes and are able to react more adequately on customer’s feedback. They have better coordination and strait communication channels, which are essential most notably in critical situations. This, as a result, has a constructive effect on the development of the product or service itself.
Performance improvement
Performance is one of the main quality metrics of a company’s development and the corporate culture has a direct impact on many of its aspects. One of the main reasons for entrepreneurs to establish a strong culture is its direct influence on personal productivity. This grows enormously in the appropriate environment and increases the efficiency not only of individual employees but also on the company as a whole. These processes are quantitatively measurable by different KPIs, nevertheless, they are significant for the ability to perform and respectively for the quality of the product or service that the company offers. Even further, these advantages, of course, have an impact on the financial performance as well, which is just as important for a company as the fuel for an engine. Already in the ’90s Kotter and Heskett (1992) showed in their long-term study a significant correlation between corporate culture and financial growth.
Higher company’s attractiveness
Only from excellent people respectively, excellent teams could an excellent performance be expected. Building a strong positive culture is vital for start-ups in terms of attracting good employees and exceptional talents. Being attractive also saves additional costs for long and obstinately recruiting processes. It increases employee loyalty and contributes to the long term sustainability of the company’s spirit. The people are the factor that constitutes a company the most and are respectively one of the most valuable assets. Happy employees are also the evangelists of a company and they are those, who promote the product most of all.
To sum it up
This short summary does not claim any exhaustiveness of all aspects related to the corporate culture, as it is our take on what we at eCollect consider to be the core of a successful organisation. It shows the enormous potential of the organisational behaviour and its orientation and highlights the importance of catering to it as your company grows and becomes more complex. We observe that our vision and strong values guarantee us many advantages in terms of performance and help us face the challenges during dynamic growth phases. We initiate prosperously new processes, use modern technologies and maintain transparent communication channels. This is our story. What is yours?
Author: Stefan Bazhdarski
