In the last few weeks, two companies – Lloyd’s of London and Ted Baker – have landed themselves in the news because their cultures got out of hand, leading to unhappy employees and public embarrassment.
This just six months after the Financial Reporting Council (FRC) introduced the Corporate Governance Code – an update to reporting guidelines that means businesses must now report on a clear purpose, values and culture.
Many businesses put their focus on strategy and assume culture will take care of itself. This is a mistake.
A positive culture attracts and keeps talent, drives engagement, and impacts happiness and customer service. It also drives belief in your business, from potential customers to investors. Recent research by Radley Yeldar found that:
- 85 per cent of Britons trust employees the most for information on a company’s financials, operations, brands and activities.
- 56 per cent agreed that ‘happy employees in a rewarding workplace’ is the biggest motivator to believing in a business.
A negative culture does exactly the opposite. Without a clearly defined culture, you run the risk of bad behaviour flying under the radar as it did at Ted Baker, or with the 2012 Libor scandal, where bankers operated under a misguided culture and colluded for years thinking they were acting in their company’s best interests.
So, clearly we need to get a handle on our company cultures.
But how? Culture isn’t tangible and it’s not a neat piece of process you can simply activate. Yet it must ripple through every policy, every employee moment and every strategy. If 41 per cent of the general public say ‘inspiring purpose and values’ makes them more likely to believe in a business, according to Radley Yeldar research, there’s more reason than ever to take inspiration from the Corporate Governance Code’s guidance and place your purpose and values at the centre of your business strategy. Here are three ways to define your culture:
Define your purpose
What do you stand for beyond profit? Why was the business originally conceived? Who did it set out to help and why? What is the legitimate and ownable role you can have in society and the wider world? This is your north star. Write it down, test it, get engagement from your teams and make sure everyone knows about it internally.
Define your values and associated behaviours
To live up to your purpose, what should you value? If you have values already, are they still relevant? Do people know about them? Do they care? Write them down, play with them, get input from a cross section of your business and make sure they feel personal and relevant to where you are going.
Lead from the front
The culture you want needs to be demonstrated by those who lead every day. Support them, communicate with them and share examples of great behaviours in action. Demonstrate how the right behaviours generate success.
Culture is simply what you get when a group of people come together. It’s the sum of your values, behaviours, attitudes and traditions. And when values, culture and strategy align, then investors invest, employees engage, and customers buy. People – yours, and in wider society – believe in your business.
Esther Smith is an employee engagement consultant at Radley Yeldar