Four reasons why a deeper understanding of corporate culture on the board of directors is a game changer
The integration of corporate culture into top management is crucial, as strategy and structure interact with culture and set the context for how people behave. In this sense, culture is always the result of strategy and structure. That is why knowledge about corporate culture belongs on the Board of Directors. Let yourself be convinced by strong arguments:
Decision-making and leadership culture influence the quality of performance
How are decisions made, power distributed and which values are prioritized at the management level? Board members who understand the connections between corporate culture and management systems harmonize decisions with the company's values and goals. In doing so, they create the basis for credibility, trust and self-efficacy as a foundation for strategy implementation.
The adaptability of a company also depends on its internal stability. Barometers include job security, psychological security and the ability to innovate and experiment. Those who take the "maturity level" of a company into account when planning projects are less likely to make the wrong decisions. For example, the reduction of hierarchy may be necessary from a strategic point of view, but can lead to stressful responsibilities for the workforce. Internal stability can be unintentionally thrown out of balance, with costly consequences.
Incentive systems influence motives and commitment:
Bonuses and rewards can influence the behavior of the workforce and must therefore be in line with the strategy. How employees experience their work and who is rewarded for what has a significant influence on the corporate culture. Understanding the interrelationships of incentive systems promotes the right motives for desired commitment.
If you want to attract talent and retain employees, you need to create a culture of opportunities. Those who incorporate in-depth knowledge of people's motives and behavior into their strategy are better able to identify suitable measures, reduce fluctuation costs and inspire employees to commit to the company long-term.
Discourse culture increases ethics, compliance and risk management
If decisions are in line with the company's ethical principles, the Board of Directors gains the trust of the workforce. This is the only way they can promote a "speak up culture" that is supported by the entire workforce. A speak-up culture is when there is a climate in which employees dare to say what they think or observe. Cyber criminals often use social engineering to exploit human emotions and social dynamics. They use targeted manipulation to get employees to disclose sensitive information or carry out harmful actions. A culture of dissent in terms of critical thinking is more resilient and resistant to the risks of manipulation and abuse.
Corporate culture influences company value
An SME entrepreneur of a manufacturing company is looking for a successor. In the course of this project, he realized that it is not only quantitative values that count when selling a company, but also the prevailing culture. He had a dependent workforce and was the company's answering machine for all questions and problems. During our collaboration, the owner gained a new understanding of topics such as personal responsibility, good leadership, the future and value creation. New and unique concepts for the distribution of power and democracy in the company matured. Structural adjustments, more precise and open processes were introduced with digital integration. Everyone in the workforce is now proficient in several process steps and has learned to work with tablets and new systems. The teams have their own budgets at their free disposal.
Today, the workforce is largely self-managing and digital: many recurring problems are solved independently. Schedules and customer complaints are the responsibility of the crew, they decide on service and when they come and go. This leads to increased self-efficacy, thinking for themselves, more interesting and varied tasks and more motivation.
In 2023, the production company achieved an increase in turnover of 63.8%, leading the industry in terms of anti-cyclical growth. The targeted investments result in an ROI of 500%.
Summary
A good corporate culture ensures that challenges can only be overcome if basic assumptions, thought and action patterns, values, beliefs, emotions, concentration, performance and positive energy are taken into account.
This includes in-depth knowledge, perception, debate and openness to critical questioning. Future competence culture in the board of directors generates the obligation to enable coherent and successful leadership in line with the organizational purpose.
About the author
Manuela Broz
Manuela Broz, culture booster, has been dealing with corporate culture for 35 years.
In 2021, she was awarded the Ethics Prize for her master's thesis "Cause and effect of relationship design on moral and ethical behavior in the digital change of a company". She is self-employed in leadership and cultural consulting, a member of the board of directors and offers prospective and experienced managers a 5-day leadership seminar with a focus on corporate culture. kulturbooster.com
