Corporate Culture Is Important

All companies have a corporate culture.  Some cultures are stronger than others.  As long as they buy into the corporate culture, employees like working at such companies.  How can you determine whether or not your employer or the company you invest in has a strong culture?  Strong is a relative term and so you have to figure it out for yourself and make your own decision.  If you work there and you like the corporate culture, you are a good fit and it works for you.  Some employees like working at a company with a strong corporate culture and others enjoy a less strong culture so that they can do things their own way as long as they get the job done.  If you are just an investor and are not on-site every day, it may be more difficult to tell if the company has a stronger or weaker culture, but it behooves you to try to figure that out through reading up on the company’s website or by asking people at the company.  Culture is an important driver of corporate success.

Origins of Culture

An organization’s culture can flow from a number of different areas, including but not limited to the following:

  • A corporate “Credo” or set of ethics or Mission Statement from which their products and way of doing business are rooted.
  • A statement of purpose of why the organization is in business in the first place and what they hope to accomplish.
  • A commitment by organizations not only to take care of its employees but also to reach out to family members to ensure a greater well-being and thus enhance the employee’s working experience.
  • A decentralized or flat governance structure that allows lower employees direct access to management and therefore a sense that their input matters.

Examples

Some examples of organizations that are known to have a strong corporate culture include the following:

  • The US Marine Corps
  • Goldman Sachs
  • McKinzie & Company
  • Facebook
  • Google
  • Salesforce
  • Johnson & Johnson
  • Procter & Gamble

All of these organizations have been successful for a relatively long period of time, and there strong corporate cultures have contributed to their success.  Do you think your employer or your investment fits with the above list?

Beware

The first 4 letters of Culture are Cult.  Sometimes, a culture can be too strong and thereby crush any diversity of thought.  That is not good for those who get crushed.  It is not good to create an organization full of mind-numbed robots.  Companies claim they seek a diverse workforce, but in reality companies can have difficulty melding employees with different ideas with the “corporate way” of doing things.  “My way or the highway” is not good and it is a challenge for companies who claim to want diversity to actually implement it successful.  It is a difficult balancing act.

IMO

If you are looking at investing in a company, or even if you are considering a job offer, take a step back from just looking at the financial statements and consider if the corporate culture is strong or if you agree with it and can advocate for it.  If you can, then perhaps you have a greater insight than others and you can see greater possibilities in the opportunity.  

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