Culture club

Have you ever looked at your business as an aquarium teeming with life?

It's an analogy that Larry Johnson, president of Johnson Training Group in Phoenix, Ariz., uses when asked to explain corporate culture.

"Corporate culture is the entire environment in which an organization operates," says Johnson, co-author of "Absolute Honesty: Building a Corporate Culture That Values Straight Talk And Rewards Integrity." "I like to compare it to an aquarium–everything in it affects the 'citizens' and if something changes too quickly, it can kill the fish!"

The current state of Market Basket, the multi-billion dollar chain of 71 stores headquartered in Tewksbury, Mass., is a prime example of how corporate culture can make–and sometimes break–a company. Former Market Basket CEO Arthur T. Demoulas headed a business employees and customers treasured. But after he was ousted in June 2014 by the board of directors (headed by his cousin, Arthur S. Demoulas), everything changed. By late July, most Market Basket stores had empty shelves–and some temporarily closed–because employees, customers and even warehouse workers were striking in support of the beloved ex-CEO fondly known as Artie T.

Hourly pay above minimum wage, a generous employee profit-sharing program, and a retirement plan entirely funded by the company are among perks employees fear they will lose under the new management structure.

"He was amazing in the culture he set. He would visit sick family members–people in cashiers' families, not just those at the top of his inner circle. He visited stores, showed he cared," Johnson explains. Hence the uproar following his firing. "I'm not sure if that's good, because you're depending on one person, but that kind of loyalty and the profitability it engenders is something everyone would want!" Johnson says. "You can do those things and fake it, but if your policies don't reflect that, it won't work." The Market Basket saga ended with Arthur T. putting together $1.5 billion with sympathetic relatives to regain control of the company.

IT STARTS IN THE C-SUITE

Market Basket is just one extreme, high-profile example of the power c-suite executives wield in crafting an organization's corporate culture–something Bob Cardy, professor of management and former chair of the management department at The University of Texas at San Antonio, describes as "a set of shared beliefs, expectations, and values that influence how people interact and do their jobs in an organization."

While culture can develop in many ways, managers can take steps to guide the development of a desired culture, Cardy says. "If left to drift and emerge, the culture of an organization can develop in ways that are not consistent with the strategic direction and values of the corporation," he notes. "It behooves management to actively develop and maintain a positive culture."

"The primary players, the leaders, set the tone as to what kind of culture the company is going to have," Johnson echoes.

That tone, typically set in the c-suite, has implications throughout the organization and ultimately impacts the bottom line.

"A culture that emphasizes innovations has been associated with sales growth, while a supportive culture has been associated with employee satisfaction," Cardy reports.

And it's not just how employees dress, or whether everyone is addressed by their titles or first names, that define corporate culture. Those things, says Cardy, are mundane indications of the culture that don't tell the whole story. Establishing core values and expectations for priorities and performance is an important step that can facilitate interactions and bring a common meaning and purpose to the workforce, Cardy says.

"The common norms can guide how people interact, facilitate interactions since you already share a basic understanding, and provide a level of trust among the team members," Cardy says. "The culture of an organization can permeate how people prioritize [tasks], approach workplace issues, and respond to each other and to customers. It can orient people by informing them about what is important. It can fill in the gap when there is uncertainty, and help people resolve problems and work together."

MANAGING CULTURE

How would you want to be treated if you were an employee of the company you lead?

That question is at the core of how to create a positive corporate culture, industry experts say.

"If you were in the stockroom, how would you want to be treated? How would you want your child to be treated? Or, if we were a family, how would we want everyone to be treated?" Johnson asks. "You should create rules, regulations and policies modeled on a symbiotic relationship, carry that throughout the organization, and lead by example."

But how do you ensure those policies come to life in your stores–especially with locations spread across town, across the state, or even across the country?

"Managers can become isolated from the day-to-day interactions in the workplace. However, there are ways to make sure you are in touch with the culture and assure it is developing in desired directions," Cardy says.

Visiting stores is an obvious solution. But according to Cardy, it may not be the best way to take the pulse of an organization's culture. "People may relate differently when a manager is around and they may be reluctant to be forthcoming if asked face-to-face about the culture they experience in their part of the organization," he cautions.

Cardy cites Whole Foods as one retailer whose leaders have excelled in creating a strong, positive culture, then carrying it through to individual stores.

The company, which began as a health-food store in Austin, Texas, has maintained a commitment to natural foods, and embodies core values including environmental stewardship, team member happiness and delighting customers, he says.

"A key aspect of the culture at Whole Foods is self-managed teams," says Cardy. Employees work in "an open information environment," where salary and most financial information is available to all team members. That, he says, "reinforces the culture of decentralized and interdependent teams.

"The availability of information also drives competitiveness and profitability by giving teams information on their costs and profit over time as well as comparisons with other teams," Cardy continues. "The culture at Whole Foods emphasizes that employees have a shared responsibility for performance. The focus is on making a positive difference in the community by empowering employees and giving them the needed information."

TAKING THE PULSE

If you're wondering if your corporate culture is having the intended impact company-wide, asking employees is a good place to start.

"A simple survey can be an efficient way to take the pulse on your culture–it can provide a quick snapshot across the organization," Cardy says. "It can be anonymous, but still provide data that can be broken down by geographic area and function."

The survey should be simple and direct. For example, if you want a culture that emphasizes innovation, safety and equality, Cardy says the survey could include the following statements, with response options set up on a "strongly agree" to "strongly disagree" scale:

1. In my part of the organization, ideas for new ways of doing things are appreciated.
2. In my part of the organization, we expect to come up with novel solutions to problems.
3. In my part of the organization, we always put safety first.
4. In my part of the organization, everyone has a chance to get ahead: gender, race, and other personal factors have nothing to do with it.

"Responses to these types of questions can give you a good idea of how people see things in various parts of the operation," Cardy says. "The pattern of responses can also indicate that a problem might exist in some areas of an organization, but not in others."

In addition, evaluating objective data such as the pay levels and promotion rates for various subgroups can help clarify where problems exist and why, he adds.

"If the objective data and survey responses both point to the same area as a source of problems, investigation is called for," Cardy says. "It may be that there are situational factors at work, or that this part of the operation wasn't included when the corporate culture was developed, or there may be a leadership problem in that area. Whatever the cause, a brief survey and consideration of objective information can raise a red flag and indicate where work on the culture is needed."

Ultimately, it doesn't matter if your employees understand what corporate culture is–it comes down to creating an environment that makes your stores a great place to work.

"Your employees might never have heard the term 'corporate culture.' And if they have, they might not really know what it means. They may just say, 'This is a great place to work' or 'It really sucks!'" Johnson concludes. "I'm not sure they're aware of the concept, but they are aware of where they're working and what it's like."

And like those fish in the aquarium Johnson uses in his analogy, employees in a healthy, harmonious environment are those most likely to thrive.