Unfortunately there are an abundance of examples of companies which focus upon and often succeed at establishing a strong corporate culture after and usually due a crisis. Samsung, Wells Fargo and Volkswagen are only recent examples. We’ve all learned the lesson that a crisis can bring out the best in us and inspire us to do better. Simple, not easy. The better way to learn these lessons is to pay close attention to companies who successfully navigate crisis and learn from their examples – what had they done to proactively build and maintain their company’s culture to avoid or mitigate the crisis?
A company crisis might be described as a sudden or not so sudden loss of balance in a particular strategy or crucial operational department. A problem large enough to impact the entire organization leading to chaos and even perhaps overall business failure. Serious stuff. The good force which fights against the crisis menace is a strong corporate culture defined in many ways. Perhaps most simply culture is a set of moral values upon which the company rests, without fail, behavioral rules and basic attitudes of loyalty and genuine engagement among employees that are shared and discussed constantly from the very top to the bottom. It is really a moral set of guidelines sanctioned and enforced by the Board and the C Suite Executive team.
How to Establish Good Culture Before a Crisis
As mentioned above, there is strong evidence of a direct relationship between a company crisis and its culture. A weak company culture will break down easily in the wake of a serious crisis. In the end, this might just be what the company needs to face reality and put its cultural house and adjacent operational sheds and gardens in order. But it needn’t be so.
- Building a Corporate Culture
There have been countless articles written about how to build a strong corporate culture, here and here for example. My focus now is not to review all of these tactics and strategies for building a strong culture. I am going to assume that readers of this article understand its import. My recent article provides a good overview of the basics of developing a viable corporate culture. What I want to focus on here is “cultural flexibility”, the ability to forecast and predict significant external or internal changes to your business environment and using your already established successful cultural leaders to anticipate changes, and if necessary, refocus or realign cultural norms to meet the potential problem.
- Anticipating Change
This is no secret. It is everyone’s job to anticipate change. We all complain today, perhaps with some justification, that it is simply not possible to know what’s coming around the corner tomorrow. I grin at this because my father used to complain about the same thing. “Everything happens too fast. We have no more time to think!” And so it goes. And it’s not going to get any easier to predict the future but try we must.
But what about an actual crisis, how does a company even begin to anticipate those. Not much differently than predicting change actually. As with change, potential crisis can be categorized and to that extent prepared for in general ways.
- Crisis Creating Changes
Remember, change or crisis can be either negative or positive or a combination of the two. Either can have a significant impact on your corporate culture and throw a rigid or weak culture off base. Some examples:
- Sudden and significant growth or change in company direction can create the need to hire and replace large numbers of employees, often from different backgrounds and age groups.
- Mergers which bring many of the same issues as sudden change in employment needs.
- A new competitive product from your main rival suddenly appears.
- Natural disasters.
- Death or disability of the CEO or key members of his or her team.
- Internally, crises can arise from pure failure of leaders to communicate or permit rivalries to prevail over team work or pure all out division warfare.
When the worst happens and a company has not made arrangements to adjust its culture to adapt to change or a crisis, different groups tend to go in different directions to put out the fire, leadership can lose its focus and finally the culture can simply be ignored as various teams act sporadically, though perhaps nobly to attempt to fix the problem. Leadership can be uncertain about how to manage the crisis and at worst, the culture is cast aside to call for an “all hands on deck’ quick fix to the situation”.
- Prepare Your Culture
There are more crisis examples of course but a successful company will analyze the potential problems that could confront their company and industry and prepare plans for addressing them when they arrive. A flexible culture is a key to this process.
But the most important characteristic that can withstand and even benefit from a crisis is resilience. And resilience resides in Board members and C Suite leaders who are resilient themselves. Let’s face it, all of us face calamities and each of us at one time or another have arisen in the morning with the optimism to view the crisis, no matter how large, as a real opportunity to lead and show your best side. We all have also at times, pulled our covers over our heads and prayed the crisis would just go away.
As mentioned above, there is an overflowing library of excellent resources to help a company through the steps of building a powerful corporate culture and there are many examples of companies whose strong reputations are based almost exclusively on the excellent culture they have developed. But building the extra aspect of resiliency into your company culture will make the difference between responding well to a crisis or simply drifting into chaos.
- Embedding the right corporate culture for successful crisis management
As Melisa Magnes cogently observes, a successful organization has a clear set of rules governing its corporation’s culture. Among her most important factors contributing to a flexible and strong culture are:
- Make issues management an integral part of their corporate culture
- Instill a mindset that instinctively finds the positive opportunities within negative incidents
- Always focus on finding ways to build and strengthen trust with their stakeholders
- Train and then empower their employees to act fast in times of negative incidents
- Prepare with a scalable and dynamic crisis preparedness program
- Embrace change, creating flexibility and adaptability in continuing to find ways to meet stakeholders’ ever-expanding expectations
Managing crisis, like managing any other aspect of our lives, depends almost exclusively on our mindset which in turn has an uncanny way of shaping an outcome. The preliminary effort you are going to put into your preparedness for a crisis, the employee training and focus on issues management now, prior to a crisis, will develop your ability to instinctively successfully manage crises.
More and more corporate culture is viewed as one of the key factors in achieving success, and particularly competitive corporate advantage. It is perhaps the one single most unique characteristic of a company and the challenge to develop a flexible corporate culture that truly reflects your company’s authenticity is an immense challenge. But the effort is well worthwhile as it paves the way for fewer and fewer crises even to the point where an event which might once have been viewed as an existential threat is simply another bump in an ever rising road.