Do you know how culture can ruin a company?

Every organisation has its own culture which, if not managed properly, can end up ruining it. How do you get to this point and how can you avoid it?

In this article we explain what corporate culture is and what are the main mistakes that can contribute to the ruin of an organisation.

What is corporate culture?

By corporate culture we mean the set of shared values, beliefs, practices and behaviours within an organisation. These cultural elements influence how employees interact with each other, how decisions are made, how conflicts are handled and how they perceive and respond to challenges and opportunities.

This culture can also influence how the organisation is perceived by customers, suppliers and other external stakeholders.

Corporate culture varies from organisation to organisation (no two organisations have the same culture) and can be influenced by a variety of factors, such as the company’s history and founding values, organisational structure, company goals and strategies, as well as employee demographics and characteristics.

A strong and positive company culture can help attract and retain the best employees, improve efficiency, productivity, innovation and strengthen the company’s reputation in the marketplace.

Conversely, a negative company culture can lead to a variety of problems, such as high employee turnover, poor performance, lack of motivation, lack of employee engagement and loyalty, lack of innovation and lack of customer satisfaction.

What are the main mistakes to avoid?

In our experience, the main mistakes that can contribute to the corporate culture that can ruin an organisation are the following:

• Lack of a purpose that inspires all employees, attracts talent and guides in achieving the success that every organisation needs to survive.
• Lack of transparency. If the corporate culture is characterised by a lack of transparency, employees may feel that they are not valued or that they cannot trust the organisation. This can lead to a lack of motivation and commitment, as well as a lack of trust from customers and other external stakeholders.
• Lack of adaptability. If the corporate culture is too rigid and cannot adapt to changes in the business environment, the organisation may fall behind and lose relevance in the market.
• Lack of diversity and inclusion. If the corporate culture is not inclusive and does not value diversity, it can discourage talented employees from joining the organisation, as well as limit the company’s ability to compete in an increasingly diverse global marketplace.
• Lack of ethics. If the corporate culture does not value ethics and integrity, it can lead to unethical practices and violations of the law that damage the company’s reputation.
• Lack of innovation. If the corporate culture does not encourage innovation and change, it can limit the company’s ability to adapt to the evolving needs and demands of the marketplace.
• Lack of leadership. If the company culture does not value effective leadership and employee development, it can lead to a lack of clear and effective direction that negatively affects organisational performance.
  Toxic environment. If the corporate culture promotes bullying, harassment and discrimination, employees may feel alienated, demotivated and unwilling to work in the organisation.
• Wrong incentives. If the corporate culture values short-term results over ethics and social responsibility, the organisation may make unwise decisions that generate a bad reputation and affect long-term sustainability.

In short, a negative corporate culture can damage the company’s reputation, affect employee motivation and commitment, limit the company’s ability to compete, and ultimately affect its long-term success and survival.

What is the first step to prevent corporate culture from ruining an organisation?

The first step to prevent culture itself from contributing to the failure of an organisation is, without a doubt, to know it, so that you can identify where the accelerators and brakes are in the face of the challenge of innovation and change management.

In this sense, InnoQuotient is a unique tool for diagnosing the innovation culture of organisations, based on a solid and robust model, developed by two academics from Babson College, statistically validated by the Massachusetts Institute of Technology (MIT) and published in the MIT Sloan in 2013.

InnoQuotient analyses leadership, climate and culture, dividing each of these areas into three blocks and each of them into elements, up to a total of 54, thus offering a 360-degree view of organisational culture, which will allow your managers to discover the aforementioned errors and make the necessary decisions to create a successful culture.