Culture as Competitive Advantage

There aren’t a lot of companies out there filled with stupid people. Granted, there may be some, but they’re certainly not the majority. By and large, organizations are filled with smart, capable people. We have technology to thank for this, at least in part. Everyone has access to the same information, the same technology. Some get in on the technology sooner than others, which provides a temporary competitive advantage; but sooner or later folks catch up.

This is partially why I maintain that healthy organizational culture is one of the biggest competitive advantages out there right now. Companies have a big opportunity to differentiate themselves in the area of culture. Like I said, organizations are full of smart people, and organizations themselves are pretty smart in regards to marketing, technology, finance, and so on. So it will be a rare occasion (though not unheard of) that an organization just blows its competition out of the water because they’re significantly smarter than other organizations in their space.

What culture does, however, is it unlocks the potential within people. You can almost think of it as an accelerator of talent, a liberator of innovation. Think about it: if employees are trapped working a job they’re not in love with for a company they think treats them like crap, chances are they’re not going to really tap into their potential to as great a degree.

A healthy culture – one marked by high morale, high productivity, minimal confusion, minimal politics, and low turnover – is one that employees want to be a part of. They want to invest themselves in the success of the organization, because it’s obvious the organization is reciprocating. They want to grow and improve, because they want to be a part of the organization’s success.

So many organizations miss this potentially game-changing competitive advantage because their default strategy when something isn’t going well is to look at all the “smart” things: marketing, technology, finance, etc. But, you see, the problem doesn’t always lie in those areas. Often, it’s a cultural issue that organizations try to address from a structural or operational perspective; and it just doesn’t have any lasting impact. As a result, many groups are just left scratching their heads and going back to business as usual.

So what does your organization do to ensure its culture is a healthy one? What kinds of things have you seen organizations do to really unleash the potential within their employees? And why do so many organizations overlook this potentially huge competitive advantage?

9 thoughts on “Culture as Competitive Advantage

  • Great post, Matt. I think in so many instances the culture of an organization emanates from the top down. Looking at the corporate culture as a reason for poor performance hits too close to home for the top brass. It’s much less threatening to look at IT or Marketing or Finance for the source of the problems.

    https://twitter.com/#!/lizbankslnb

    • Agreed, Liz. And really, it’s almost impossible to separate performance issues from culture, because how performance is viewed and how performance issues are handled are both interwoven into an organization’s culture. In other words, some times it’s precisely because of cultural elements that performance issues exist.

  • Great post Matt. Couldn’t agree more. I think the challenge becomes communicating an organization’s culture – both internally and externally. In my opinion, there’s often a gap between what organizations perceive as their culture and their true, authentic culture. It’s not something that can be written down as a bunch of value statements…it’s how the humans that are part of that organization think, feel and act, among other things. It takes effort to discover and communicate culture, but once it’s distilled into real and meaningful terms, employees are much more likely to feel a part of it.

  • Totally agree! As others have stated, communicating the true culture can be difficult. Certainly having a strong onboarding process can help, an addition I’ve found successful is a peer coaching program. While an organization has a culture, each office has its own personality within that culture. The faster an employee understands the culture of the office in which they are working the faster they integrate, find purpose and understand the behaviors that are celebrated. Of course this requires an additional training program as the “coaches” must be trained to perform this function well!

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