The 1992 book Corporate Culture and Performance is regarded as a founding document in the study of corporate culture’s effect on traditional business metrics.
In it, the authors, Harvard professors John Kotter and James Heskett, trace the relationship between corporate culture and economic success. By examining over 200 firms, including Hewlett-Packard, Xerox, ICI and Nissan, they show how unwritten rules affect performance.
Work satisfaction
An 2010 Ipsos Public Affairs-Randstad survey of over 1 000 employed U.S. adults showed that two thirds of working adults (66%) believe that company culture is very or extremely important to the success of their organisation. And 29% find it extremely important according. Attitudes vary across age however, with adults under 35 being more likely than those who are older to find it important (72% vs. 63%).
Others who also tend to find it to be more important include college graduates (76%), employees at companies with over 100 employees (72%), and those with a household income of $50 000 (around R360 000) or more (69%). Employees feel that many elements contribute to company cultures, most notably employee attitudes (69%), effective management (64%), strong trust relationships (57%), being customer-focused (55%), and high accountability standards (50%).
What is culture?
Some define company culture as its “personality”. Others give a more detailed description, saying it comprises the psychology, attitudes, experiences, beliefs and values (personal and cultural values) of an organisation. What everyone agrees on is that corporate culture tells people how to do their work and controls the way they interact with each other and with stakeholders outside the organisation. The consensus is that organisational culture is holistic, historically determined, related to anthropological concepts, socially constructed, soft, and difficult to change.
Change
One company that scored high on the company Cultre aspect of the Best Employers 2011 research is the Joburg Market. Formerly known as the Johannesburg Fresh Produce Market, it is a major centre for the marketing of fresh produce in South Africa and neighbouring countries.
Pheagane Mawasha, head of marketing and communications, gives his insights into how the company changed its culture.
Q Describe your company culture.
A: People management and employee engagement are truly central to our business strategy. Human capital management forms one of four pillars which support the business’ vision. We believe it is vital to recruit the right caliber of people who have the right attitudes and aptitudes. Essentially, this is what helps the business to move forward. The fresh produce business is about people. Employees are proud to see them- selves as part of the Joburg Market family. Colleagues quickly become friends and it is not uncommon to find employees who have been with the company for 30 years or more. The company is values driven and employees have in turn internalised these values. Future plans and goals are embraced by all. Our employees know that they are valued and they are aware of the investment we have made in them. This knowledge has created a culture where our staff are willing to give back to the community and the agri-trade through various company sponsored programmes.
Q What makes it different from the culture of other companies in your field?
A: Innovation is a second core pillar underpinning action. It is what differentiates us from other companies in our field of business. The company prides itself on seeking creative ways to deliver its services to stakeholders, in addition to providing an environment for employees that is constantly challenging and exciting. Our unofficial motto is “business unusual”. Employees are encouraged to take ownership of their projects and deliver the best performance possible, in addition to being aware of cutting edge developments in their respective fields.
Q: Has this culture developed consciously or sub-consciously?
A: The culture was developed in 2006 with the implementation of a three- prong turnaround strategy which included amongst others training and development of employees and the introduction of a formal policy addresses succession planning. Managers identify succession candidates who are subsequently exposed to training programmes which will accelerate their development and ultimately groom them for management positions. Training is offered to employees at all levels of the organisation. We address issues such as basic literacy, numeracy and language skills in the workforce. Training is tailored to suit the individual and their level of education. In a bid to increase productivity, an organisation-wide Performance Management System has been implemented. Through this system, managers are able to access tools with which to measure and manage employee performance, identify and address low performance areas early on, as well as to motivate employees and sustain positive performance.
Joburg Market has an active retention programme in place, which assists with the attraction and retention of top talent. The company’s retention vision aims to ensure that skills are always retained and transferred, even though it may not always be possible to retain a specific employee. Key to employee engagement and retention is, of course, staff morale. To this end, climate surveys are done every two years whereby organisational strengths and weaknesses are identi-fied. Action plans are put in place to grow and sustain areas of strength and minimize weaker areas. Results from the most recent climate survey show that employees have a great deal of pride in the organisation and its values. Looking ahead, the Joburg Market is in the process of developing an Academy, which will teach skills relevant to the fresh produce industry such as cold storage management and the like. Ultimately, the Academy will widen the market’s talent pool.
Q: How have you gone about doing it?
A: The Joburg Market’s current healthy state is thanks to the implementation of a three-prong turnaround strategy. The first phase focused on stabilisation, as an atmosphere of uncertainty prevailed around 2005. Staff turnover was high, and the company registered a loss. The first priority was to stop haemorrhaging money, so the company introduced new policies and procedures with a special emphasis on corporate governance. The next step was to consolidate the gains made, and to ensure compliance with the new policies. The critical issues here was to obtain a clean audit and to move from the red to the black, whilst addressing employee morale and entrenching a shared set of values and a common direction. As such, stakeholder relationships were a primary focus during this phase. By the end of 2008, the Market was on a far firmer footing and ready to enter a growth phase. Expansion plans will further cement its position as a significant player in the fresh produce value chain. The management leadership style has certainly played an important role in the Market’s metamorphosis. The approach was to give employees room to express ideas, and it’s these ideas that have driven the company forward. Added to this, greater emphasis was placed on upskilling employees, so that even unskilled workers have completed ABET courses. The benefits are evident in increased staff confidence and dignity, earning the Market a place among employers of choice. Such ‘softer’ issues took over as a focus during the second stage of the turnaround, as ‘bottom line issues may affect profitability, but it’s the softer issues that determine sustainability.
Accordingly, salaries were carefully evaluated using salary grading software. Positions were graded based on the output of the job. Output was then benchmarked to national salary information, thus ensuring objective and market related payment. The Market is proud of the fact that not one employee in the organisation earns less than R5 000 per month. The Joburg Market culture is one which employees are not micromanaged; they are given the space to perform their duties, show initiative and be accountable for their actions. The environment is inclusive and caring, whilst focusing on open communication, performance and results. We believe the best talent we can attract is the talent we have grown ourselves. As such, developing staff internally is a main priority and the success of this approach is shown in the low attrition rate. Should the company need to look externally to fill vacancies, a fair and open policy is in place. Individuals who are not afraid to make mistakes, but are happy to learn from them will thrive at the Joburg Market. Innovative thinkers, hard workers and people with a passion for what they do are welcomed into the Joburg Market family. New joiners are provided with a comprehensive orientation to the organisation and its culture.
Q: How does your company culture contribute to your success as a company?
A: At the start of the turnaround strategy the company was experiencing cash flow problems. Now there is cash in the bank and the company is able to meet its financial obligations. Unaudited after tax profit tax for the past financial year exceeded R20 million. Meanwhile, turnover was R3,7-billion. And with a planned R300-million investment in improved infrastructure, it’s reasonable to anticipate that this figure will rise further and that solid performance will continue.
This article originally appeared in the Mail & Guardian newspaper as a sponsored feature