What is Corporate Culture and Why Is It So Important in 2021?

Author: Candace Coleman, Content Manager
January 19, 2021

After what seems like eons, 2020 is finally over and we’re cracking open new calendars with cautious optimism. But no one’s forgetting last year’s biggest lesson as we step over the threshold into 2021: anything really can happen. Now more than ever, we’re thinking about being prepared for whatever we may be facing ahead.

If you’re a business leader still recovering from 2020’s fallout, you’re probably experiencing a lot of uncertainty as you gear up for the new year. Standard Q1 concerns about profit, staff, and customers are now overlaid by new challenges. You may be asking yourself things like:

How will I regain/maintain profitability as the country recovers from COVID?

How can I effectively manage a remote workforce?

How can I retain the customers who are finally starting to come back?

If questions about concrete issues like these are swirling in your head, is this a good time to add something that sounds as intangible as “corporate culture” to your list?

The short answer is—absolutely. The timing couldn’t be better.

Why? Because a strong culture maximizes your ability to achieve success in any year. Having one in the unprecedented period we’re experiencing now is even more crucial.  It’s the ammunition you need to tackle the questions that are keeping you up at night.

At CultureWise, our leadership team has helped hundreds of businesses build and operationalize culture that drives success. In this article, we’re going to talk about what a corporate culture is and why it’s a critical element for every company—especially now.


What Corporate Culture Is…Not

If culture’s that important, why doesn’t every CEO make it a top priority? Maybe it’s because many people have a hard time figuring out what it really is.

Some may associate culture with motivational posters that make everyone feel good about where they work—but don’t really impact what they do. For others, “culture” may conjure up images of freeform workplaces with pets, game tables, and a ban on formal business attire.

If this is what culture looks like, it’s easy to see why business leaders preoccupied with a thousand other things wouldn’t put it in the priority column—especially in 2021. They’re busy just trying to make their companies as good as they can be in uncertain times.

And that’s exactly what a great culture can help them achieve—it has very little to do with inspiring posters and cool perks.

Swing, Miss. Another Misconception about Culture

Perhaps you’ve already spent time and effort identifying your company’s culture because you understand that it can be an asset. You’ve written a wonderful “culture statement” that capsulizes what your business stands for. You’ve developed a set of values that you’ve shared with your staff and encouraged everyone to live up to them.

Culture? Check! You crossed it off your to-do list a while ago. This year, you just need to focus on staying afloat and getting things done.

You started off with good intentions, but if you want a culture that creates momentum and propels sustainable success, you can’t just define it and move on. The great values you outlined won’t drive your company’s culture while you tend to other issues.

The bottom line is that even the most carefully crafted culture won’t work unless it’s constantly influencing everything you and your staff do, especially during challenging times. 

The Real Definition of Corporate Culture

Now that we’ve identified several things that won’t drive an effective culture, let’s concentrate on what will. A healthy culture provides the backbone that will support and sustain your business. No matter how good your product/service/technique is, if your company lacks the structure to sustain it, it can’t remain competitive.

An online search of the term “corporate culture” yields variations of this definition found on Indeed: “An organization’s values, ethics, vision, behaviors and work environment.”

This is a pretty good summary using five words to describe the components of culture. But can you pick out the most important part of the definition? Only one of the words relates to how culture is achieved instead of what it is “on paper.”  Behaviors.

Taking this line of thought further, CultureWise founder and CEO David Friedman offers a more down-to-earth and realistic definition in his first book, Fundamentally Different.

In it, he states: “Culture is the commonly-held set of values and principles that shows up in the everyday behavior of the people.”

In other words, no matter what a company leader says about principles and regardless of what employees tell you they value or believe, what shows up in everyone’s behavior is the best indicator of the organization’s true culture.

Culture-Driven Behavior

According to research done by Terry Bacon and David Pugh, authors of Winning Behavior: What the Smartest Most Successful Companies Do Differently, quality products and competitive pricing are the minimum requirements to be in the game. These are big accomplishments for a company, to be sure, but they’re also relatively easy for enterprising rivals to copy.

To build a real and lasting difference into your company, one that competitors can’t copy, you must actively practice a culture that shapes your staff’s behavior. The authors call this “behavioral differentiation,” and it is a game-changer.

To take advantage of it, you need to acknowledge that how your employees operate is more important than what you sell or how much you charge.

Your carefully chosen team, coached to regularly work and act in ways that are rooted in the principles you think are most important, is the special sauce that can’t be matched by others.  That’s your culture.

The Power of Corporate Culture

Earlier, we mentioned that an effective culture is the backbone of a business because it provides structural support, especially in stressful times. Let’s take the anatomical analogy a little further. As your culture becomes more intrinsic in the way your staff operates, it also adds muscle to everything your company does. Consistent culture-driven behavior will empower your people with stamina, confidence, and unity—an edge you’re going to want this year.

Now let’s get back to those worries swirling in your head and discuss how a strong culture can be your secret weapon as you navigate 2021.

#1: How will I regain/maintain profitability as the country recovers from COVID?

Many companies lost financial traction last year and business leaders have no way of knowing what 2021’s economic arc will be. Some people may just plan to put their noses to the grindstone and hope everyone on their team follows their example. But working harder doesn’t necessarily translate to generating enough income to turn that much-needed corner.

Working more effectively, however, does.  A strong culture gives companies superior cohesion that helps them successfully adapt, pivot, and respond to challenges and changes. They’re able to tackle problems better because they work together better.  Culture-driven environments reinforce a team’s ability to:

  • be proactive
  • excel at communication
  • help one another succeed
  • continuously improve processes
  • find ways to get things done

These are just a few examples of how a team is empowered by a strong culture. The many benefits afforded by an active, engaging, and ongoing internal culture increase your company’s ability to drive income. Your culture will help you reach and even exceed the goals you’ve set for 2021.

#2: How can I effectively manage a remote workforce?

When the pandemic pulled the rug out from under us last year, businesses suddenly found themselves operating with staff members performing their jobs at their kitchen tables. Your company may have been among the many that experienced setbacks with this model.

Maybe you observed your team not collaborating as effectively when they stopped operating under the same roof. Or perhaps you and your managers found it much more challenging to train, coach, and guide your staff. What’s the answer?

A clearly defined and understood company culture can make a huge difference as teams work remotely. It provides a common understanding of how things are “done around here”—even if “here” is technically all over the place. The culture eliminates operational inconsistencies and improves collaboration. It’s the glue that holds everything together.

While working from home has its downsides, doing it on such a large scale in 2020 revealed many benefits as well. We’ll probably see a lot of folks go back to their workplaces this year, but a remote/on-site hybrid workforce is likely to emerge as the norm. Having a defined culture that keeps people on the same wavelength, wherever they are, will be crucial for operations from now on.

#3: How can I retain customers who are starting to come back?

Let’s face it, 2020 was really tough for everybody, including your customers. You probably experienced some level of attrition because many of them suffered financial loss. They also learned they could do without some of the things they regularly purchased in the past. Regardless of the quality of products or services you provide, last year left your customers with an extra layer of caution and a low tolerance for mediocrity as they’re starting to stick their toes back in the marketplace.

When old customers resurface, or when new customers give your company a try, what will rebuild or create loyalty? Your people’s behavior.

Teams whose actions are guided by a strong core culture will do whatever it takes to provide exceptional experiences every time they interact with a customer. These experiences are what will differentiate a company from the competition and create lifelong customers.

Teams that don’t operate with this kind of cultural blueprint will be less consistent and therefore less successful. Remember, it only takes one bad or even ho-hum experience to lose a customer—and that will be apparent this year more than ever.

These three examples are just some of the issues that a strong company culture can help you overcome in this difficult time. The full list of advantages is much longer because practicing a dynamic culture literally affects every single aspect of your business.


Culture Works! How Do I Get One?

By now you may see the value of developing an organic corporate culture that will shape and improve how your team operates this year. But it may seem like a lot to take on, especially right now. Let’s start 2021 with some good news.

Despite the wide-ranging impact of a great culture, the work of establishing one needn’t be time-consuming or distracting. You probably already have many of the necessary elements—you just haven’t activated them in a way to maximize their impact. There are several ways to get the ball rolling.

  1. A great way to start is to check out David Friedman’s second book, Culture by Design. In it, he offers a clear, step-by-step guide for building an outstanding company culture. The book spells out how to operationalize culture in a practical and simple way that’s achievable for just about any business.

  2. You can implement the model yourself, or you can take advantage of CultureWise, a suite of tools and products based on the plan outlined in Friedman’s book. This turnkey operating system for culture is compatible with EOS and is offered at several pricing levels, making it actionable and affordable for companies of any size.

  3. To learn more about different aspect of culture and how it can improve your company, subscribe to Culture Matters, an informative and free, bi-weekly blog with great insights about a host of culture-related issues.

  4. You can also check out what scores of CEOs have said about how implementing a corporate culture has improved their company and helped them through challenging times.

  5. If you think you’d benefit from personalized guidance, CultureWise has a team of experts who can help and there are many other culture coaches in the marketplace that can help you achieve your goals.

Corporate Culture is not only important in 2021, it has more value than ever before for your company. Position your business to get the most out of the coming year by empowering your team with a high performing culture.

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