Corporate Culture an Invisible Asset and Strategic Weapon

How does a little company headquartered in Bentonville, Arkansas, become one of the largest retailers in the world, with more than $400 billion in sales?

How does a small company in Texas with all the cards stacked against it, whose business plan was created on a napkin, grown into one of the largest and most profitable players in its market?

How does a company with an odd, non business like name come out of nowhere in the competitive environment of Silicon Valley to challenge the behemoth Microsoft and replace it as the leader in the Internet space?

How does a company with a dominant market position (more than 42 percent market share) fall from grace over a period of twenty years and face the abyss of failure?

The answer in all these cases, is attributed to something that is very real but invisible to the naked eye. It is not magic but something that, under the best of circumstances, works much like organizational magic. The answer is the invisible asset or liability of Corporate Culture.

In the case of the little company from Bentonville, Walmart has grown to be a retailing giant. Walmart former CEO, Don Soderquist, attributes its success to the company’s culture. Similarly, both Howard Schultz, founder and chairman of Starbucks Coffee Company; and Howard Behar, former President of Starbucks International, have attributed their company’s astounding success to its corporate culture rather than its coffee.

Starbucks Coffee has grown form just two retail stores in Seattle to more than twenty-five hundred stores worldwide. Starbucks views culture as a critical factor in the organization’s success. Specifically, the company’s paradigm is that “the way we treat our people affects the way our people treat our customers, and in turn, our success.” This belief has led the company to a number of human resource practices that are designed to enhanced people’s feeling of being valued by the company.

They all recognize that corporate culture has been a key ingredient to success and the ability to remain profitable, even in the face of challenges. The company from Silicon Valley with the odd, non business like name of Google has become the leader in the Internet space through its search engine technology. However, a key to the continuous development of that technology is the talent and creativity of its people. The secret of Google’s success is its way of turning its employees into an extraordinarily creative team. Google attracts its talent because of its culture. As a result of its corporate culture, Google is recognized as one of the best companies to work for.

Like bacteria or X-rays or other invisible phenomena, corporate culture is real but difficult to observe. In spite of this invisibility, it has a profound impact on organizational success and failure. It can be an asset or a liability.

In a very real sense, corporate culture can be thought of as a company’s “personality.” Every organization, regardless of size, has a culture that influences how people behave, in a variety of areas, such as treatment of customers, standards of performance, innovation, etc. Culture is manifest almost everywhere in an organization. It is reflected in the words and language people use in communicating with one another. Culture is also manifested in the artifacts that are in or on display in the company’s facilities. Everything in an organization contains a cultural message, whether explicitly intended or not.

In brief, culture is manifested in everything from the cultural statements on posters to the furnishing of the office and to the art that adorns the walls. Sometimes, the culture of a company is obvious and clearly visible, as in the treatment we receive as customers and the artifacts we see that support this focus on customer service.

We always believe that, if corporate culture is managed correctly, culture might well be the ultimate strategic asset and competitive weapon for most companies.

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