Corporate Culture – Making or Breaking Performance

When a business’ performance is not satisfactory, sometimes it is not immediately clear what is impacting performance. One aspect that is sometimes misunderstood and very often overlooked is Corporate Culture.
The problem with corporate culture is that if it goes unchecked it can become toxic to the business and the results can be quite devastating. Recent history gives us some very good examples of well known corporate culture failures that had abyssmal results such as Lehman Brothers, IBM, Blackberry and Delta Airlines. Each of these four examples clearly shows what happens when the impact of corporate culture is overlooked until the results speak louder than words.
  • At Lehman Brothers the problem was that it developed a culture which was based on performance bonuses. Along the years this nurtured a high-performance, profit and growth driven culture. The problem with this culture was that the customers shifted from being the focus of the business and instead they became the means to success.
  • At IBM which once was the “smartest company in the world“, a culture of research and development, innovation and free spirit, were eventually replaced with a culture of approval and bureaucracy. Whilst IBM struggled with its own bureaucracy, its more agile and responsive competitors took over the market.
  • Over the years, Blackberry developed a perfectionist culture focused on attention to detail. Understanding what the customer wanted became secondary. In a short span of time, Blackberry was overtaken by Apple and Samsung who were successful because they made the devices that the customers wanted.
  • Delta Airlines was a very successful American airline. Its success was built on a culture which focused on building a strong customer culture of hospitality and excellence in customer service through engaged and happy employees. This corporate culture collapsed when cost saving measures on training and staff perks were introduced.
In this short article we have taken a look at four companies and what went wrong with their cultures. We are sure that you also have some first hand experience of companies that have struggled because of their cultures. The good news about culture is that it can be nurtured. Please contact CMG Consulta to start the voyage.