The importance of corporate culture and the role of HR

For companies, as for any other business entity, performance depends on multiple factors, of which one of the main is the quality of the human resources.

Compared to the past, modern businesses are no longer based on a rigid pyramidal and hierarchical structure, with a “chief” who, from above, pulls on the reins of employees, who simply carry out their individual tasks.

Today, human resource management is far more complex and sophisticated, and goes above and beyond the classic maxim of finding “the right person, at the right time, for the right job”.

HR needs to step up and consider the big picture which is directly influenced by the so-called “corporate culture” (a term which is often mis-used) just as the business’ mission statement does, whilst at the same time acting as a vehicle for its own promotion.

What is corporate culture?

Corporate culture is the fulcrum for the success of a business, organisation or institution. It’s not a programme to follow, a list of behaviours or of instructions, it represents the company DNA.

An excellent definition is that of Investopedia which we cite here.

“Corporate culture refers to the beliefs and behaviors that determine how a company's employees and management interact and handle outside business transactions. Often, corporate culture is implied, not expressly defined, and develops organically over time from the cumulative traits of the people the company hires. A company's culture will be reflected in its dress code, business hours, office setup, employee benefits, turnover, hiring decisions, treatment of clients, client satisfaction, and every other aspect of operations.”

Corporate culture is thus the way in which managers and employees interact and cooperate.

And as we read above, it’s something that is not necessarily expressed in a direct manner, but which osmotically propagates between employees, who share the same values and business processes.

Shared corporate culture may influence company productivity decisively, acting as a real competitive advantage compared to those businesses who have not managed to create one, or those who have one that is not so effective in delivering results in the face of complexity.

How to create corporate culture

In an article published in 2013 by John Coleman in the Harvard Business Review there are 6 elements which make up the corporate culture of any single business.

They are:

  1. Vision: great corporate culture starts from a vision or declaration of intents.
  2. Values: business values are the epicentre of its culture. Whilst “vision” details the goals of the business, the values provide a series of guidelines on behaviours and thought processes required to reach that vision.
  3. Practices: the values have little worth if they are not endorsed by the business practices.
  4. People: no business can build a cohesive corporate culture without people who share its basic values or possess the abilities and desire to embrace those values.
  5. Narratives: every business has a unique story to tell, and the ability to bring it to light and transform it into a narrative is a vital element in the creation of corporate culture.
  6. Places: places, be they geographic, architectural or aesthetic, have an influence on the values and peoples’ behaviours in the workplace.

In what way does HR influence corporate culture?

Corporate culture is not a static element. It evolves constantly, on the basis of change - both internal and external to the business.

Human resource management covers a vital strategic role in influencing and shaping corporate culture.

Numerous studies confirm that employees who are totally absorbed by and at one with corporate culture tend to have improved performance, guaranteeing increased productivity levels and a better corporate climate within the company.

So, in brief, company employees who share the same culture and a single approach, are happier and more efficient, which has a waterfall effect on other human resources.

This however means, a double workload for the Human Resources team of any company. On the one side, it is vital to identify new people who are able to buy into the corporate culture entirely, and on the other it is necessary to motivate the people already within the company to increase their involvement.

A good manager, or management team, must create, instil and propagate the corporate culture, focusing on making the process fluid and natural, and not management-cascaded, colleague-driven or forced.

Let’s see the direct point of view of two HR managers working with FAIST on this matter.

Lara Cerquiglini, HR Manager for CPS&IND Business Unit WW

The importance of Culture in company management today is unfortunately not always understood and agreed with, especially when it comes to how closely it is related to the business and to the achievement of the objectives that the company sets for itself.

In truth, the impact that the adherence to a shared corporate culture, embraced by all resources, has on competitiveness, efficiency and effectiveness (and also economic sustainability), is enormous even if not easy to grasp and understand. At the beginning, coming from a technical background, I myself couldn’t fully grasp its importance, but after diving into the wonderful world of HR and being at the forefront of defining our Corporate Culture, our "backbone", I fully understood the importance and at the same time the centrality of Corporate Culture and HR work.

We have been working on this at a BU corporate level for more than 3 years, with all the complications related to the difficult translation of these concepts into the business, due to the resistance to change typical of the human being. The project started from the definition of Culture, as perfectly delineated by Coleman, which led to a Vision and a Mission, linked to Values ​​that were then declined into Skills and Expected Behaviours. All of this describes who we are: what our highest desires are, what we pursue in the short term, how we do it and how we all work together to make FAIST what it is.

As HR Manager for FAIST CPS&IND Business Unit, I am very lucky to have had the opportunity to get to know and fall in love with this job, in which I strongly believe and I see, day after day, the positive effects it has on people - and the impact this has on the business of our company. Obviously, adherence to Culture must be present daily in our working life, as a sort of compass that guides us in managing our activities and relationships. For this reason, HR are an agent of change who works as a catalyst to support colleagues and facilitate their daily path of adherence to Culture. This support is necessary because embracing the corporate culture implies knowing our inner self and knowing how to manage ourselves, with the aim of collaborating better with others who have different backgrounds, different characteristics and skills, different cultures and often even different languages. Being able to do this means, for us, enriching ourselves in the approach of diversity and producing value for the company.

Luca Buscaglia, HR & Admin Manager FAIST Light Metals Engineering

Having a clear corporate culture is vital for companies as it’s the key to keep people engaged. In this specific period of global uncertainty only companies with high levels of engagement of their employees can be successful and turn into an even stronger organization. If people identify themselves into the corporate culture of their companies, they will be highly motivated and support the business and its changes.

As HR we must promote this culture, which is not something on paper or written in a manual, it must be visible and lived by each team member! From our side, helping employees feel as part of the organization and that his/her contribution is essential to reach a greater goal it’s crucial. As we use to say at FAIST: “Individually, we are one drop. Together, we are the ocean”.

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