The (Secret) Ingredient to Business Success

Culture is one of the most frequently described topics in business and leadership circles, yet it is also one of the most misunderstood, and consequently misapplied, aspects of organizational life. The most common misunderstanding is that organizational culture is the same as employee engagement, satisfaction, or climate. While an association does exist between culture, climate, and general workplace outcomes, there are important connections missing from the relationship that bring culture to both an understandable and actionable level for leaders of organizations. Another common mistake is to view culture as merely a reflection of the history and artifacts that chronicle the organization’s past. Reams of research and case studies highlight the importance of culture to an organization, but little practical work has gone beyond understanding culture as a shapeless, yet influential, business force.

Despite the many misconceptions of culture and its organizational role, the evidence time and again clearly demonstrates that culture is the most powerful ingredient in the formula to long-term business success. Given the confusion surrounding organizational culture, the most surprising fact is that there is no complicated or secret formula to what culture is and how it works. In fact, understanding the purpose of culture and how it contributes to business success is relatively simple and straightforward.

Culture serves two basic and fundamental purposes in any organization: Adaptation and Integration. First, culture is the collective knowledge, principles, behaviors and artifacts that organizations create to deal with, or adapt to, the challenges and problems of the internal and external environment they face. Without collective culture to guide its path, the organization quickly expends precious resources or makes serious mistakes that threaten its very existence. Second, culture is the shared beliefs, values and norms that represent the veritable heartbeat of the organization. The pumping of that heartbeat maintains the vitality of the business by synchronizing, or integrating, perspectives and activities of old and new, thereby achieving outcomes and efficiencies not otherwise possible.

Given this simple understanding what culture does, it becomes much easier to observe and assess culture in action. There is a definite link between successful business outcomes and three elements of culture that every organization shares and any leader can influence positively. Candor seeks to understand if the organization is participating in conversations that build trust and commitment, while Alignment provides an assessment of how the organization connects its people to the guiding values, and Recognition describes how the organization intentionally celebrates and advances the culture. By better understanding what culture does and how it happens in organizations, leaders become better equipped to shape and advance a culture that fosters higher business performance and other positive organizational outcomes. And that’s no secret!

CAPT Steve Trainor, U.S. Navy (Retired), Ph.D.
Former Milestone Leadership Associate