What makes companies such as Google, Coca Cola and Apple so successful? According to a study of Deloitte Development LLC an implemented “culture of purpose” is one of the key success factors. This is referred to as corporate culture in professional literature. The company proved a direct and positive relation between the existence of a corporate culture, employee and customer satisfaction levels, and the financial success of a company.
Worryingly, for profitability reasons, young businesses often start their economic activity too soon, not having determined solid company values and objectives yet. The lecturer at Havard Business School, Shikhar Ghosh criticizes this approach and points out poor business plans as a major cause for business failures. Unfortunately, lukewarm business strategies give entrepreneurs no wiggle room to change the course as soon as new opportunities come up, which makes the business unprofitable sooner or later. Without the needed adaption to the market, debts often go so high that there is only one solution left: The liquidation of the business with the help of a Members’ Voluntary Liquidation (MVL) or a Creditors’ Voluntary Liquidation (CVL). Here is how entrepreneurs can prevent that by building a corporate culture.
Build a Corporate Identity and Learn from big Brands such as Coca Cola
A corporate culture gives an organisation an identity, and differentiates it from its competitors – a necessity to stand out from the crowd of market suppliers, and thus, strengthen a business against its competition.
However, having developed a strong corporate culture also can strengthen a business from inside. On the one hand, formulating a company’s vision, mission, and values, helps to influence employee’s behaviour and to provide them with a feeling of belonging and identity. In order to support the set values and to represent them, the management simply needs to create policies, and an appropriate management style, consisting of the right communication style, or rewarding system and so forth. On the other hand, the corporate culture can serve as a road map to lead the company through difficult situations and decision making processes.
However, next to many invisible attributes, the corporate culture is also built of tangible characteristics such as logos/symbols, dress codes and slogans – visible attributes which are most commonly implemented by entrepreneurs and, again, make a company recognizable in an overcrowded market.
Strive for Synergy and Consistency
Having a look at the corporate culture of Coca Cola may give some best practice examples. Everyone should be aware of Coca Cola’s fun-ads and initiatives such as the recent one ‘Save the Polar bear’. Apparently, the company’s communications and activities support its vision of ‘sustainability’ and the purpose to deliver happiness, inspiration and positive moments into people’s life.
The persistent consistency of Coca Cola’s practices and internal and external communications led to a corporate identity which is lived by all members of the organization. This degree of persistency would not have been possible, if there weren’t a formulated mission, vision, and value statement in place. On the basis of that, Coca Cola was able to establish a synergy between the beliefs of the staff and management who in turn, work by the same culture, and follow the same values in the work environment. As a result, Coca Cola was able to develop a strong corporate identity.
Be Brave to Change your Business and your Products
Market environments are subject to constant change: New competitors enter the picture offering similar products, consumer tastes change, or their environmental awareness rises. A company must learn to monitor all the important external factors which impact on buying decisions crucially. A decreasing market share and shrinking sales for a specific product are important indicators which needs business’ attention and strategic, corrective measures.
For instance, Coca Cola adapted to changing consumer tastes through many Coke varieties such as Diet Coke and Coke Zero to please a more health conscious consumer. Although those product extensions change the product portfolio, Coca Cola made sure that the core values remained the same. In that way, the company was enabled to build a corporate identity, which clearly differentiates it from its competition. Consequently, every company needs a mission-vision-value statement, as it gives a business the needed direction, which allows it to develop further without losing its identity.