Cultural evolution

Corporate culture may be hard to grasp, but it’s always there. It shapes what we do and how we treat each other. What’s more, it is always evolving.

It is not unusual for companies to use ­financial incentives to retain employees. But what about a company that offers its employees money after the probationary period if they decide to leave? Unimaginable? Not at all. The U.S. online retailer Zappo does precisely this – and for a good reason: it wants all employees to carefully consider whether they identify with Zappo and its corporate culture. This is why every newcomer, from managers to temporary workers, first work in a variety of departments at the com­pany in order to get to know its philosophy and culture before deciding whether they and the company are a good fit. 

Just like people, companies also have their own character, which is reflected in the company’s culture. It consists of shared values put into practice and a manner of conduct that radiates from the inside out. In other words, corporate culture is how we treat each other. This can be seen in the little things, such as greeting colleagues on a daily basis, in the email from the Managing Board or at the employee performance review. While corporate culture is sometimes hard to grasp, it is always apparent.

“Technological change will continue to challenge us in the future.” Dr. Olaf Berlien, CEO

Culture and strategy go hand in hand

As unusual as the approach taken by Zappo’s management may appear at first glance, it accounts for an undisputed insight from first-hand experience: corporate culture plays a decisive role in a company’s success and value creation. It is the company’s backbone, it helps employees identify with the company and ultimately boosts their satis­faction and commitment. However, there is no blueprint for a good corporate culture. The key thing is that it fits with the company, its employees, goals and strategy. Culture has many facets, and every company has to find the one that is right for it.

The video-streaming service provider Netflix is a prime example in this regard. A fixed number of vacation days? Not here. The company also has no rigid guidelines for travel costs and expenses. Employees themselves decide what is appropriate. The U.S. company gives its employees a lot of room to make their own decisions and relies on their honesty and common sense. Instead of merely being present, what matters is individual performance – including when it comes to salary. The responsibility that the company places on its employees builds confidence and trust, and employee satisfaction is high.

A positively perceived corporate culture embraced by the company and employees alike also radiates outwards. To ensure the loyalty of its guests through special experiences and services, luxury hotel chain The Ritz-Carlton relies on the individual responsibility and entrepreneurial thinking of its staff. Every employee has a high degree of decision-making power when dealing with customers and can treat them to an overnight stay or a meal without consulting with a supervisor first. This kind of trust translates into higher commitment among employees, and ultimately ­happier guests. The hotel’s management knows that The Ritz-Carlton brand can never be something that the employees don’t embody themselves, which is why they are given so much room to act on their own authority.

“We need a corporate culture that recog­nizes the opportunities that change provides.” Peter Bauer, Chairman of the Supervisory Board

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Corporate culture relates to the shared values, standards and convictions that shape ­employees’ conduct and actions. It is learned through social interaction and is subject to change.

Freedom creates flexibility and innovation

Gore employees also enjoy a lot of room to make decisions when performing their jobs. The management team of the company, which is known primarily for its waterproof clothing, firmly believes that people deliver the best results whenever they have the greatest freedom to act. Gore has flat hierarchies. Managers have to earn the respect of their colleagues through skill and performance. The company’s structures are not set in stone, either. The idea is that teams should be able to change quickly if necessary due to the market or a new technological discovery. This kind of corporate culture provides Gore with a high degree of flexibility and innovative strength – both of which are key to survival in a fast-paced world.

OSRAM is also operating in an environment subject to constant and ever faster changes. As we develop into a high-tech company, our business strategy and portfolio never stop evolving. Software, the data economy and autonomous driving have all become important business fields. “Technological change is not a temporary phenomenon. It will continue to be an integral part of everyday life in the future,” says CEO Dr. Olaf Berlien. “Such change not only means that we have to act in innovative ways on the market, but it also requires the right practices and conduct within the company.”

Evolution instead of revolution

Strategy and culture have to change hand in hand to ensure our future ­success. “We need a corporate culture that recognizes the opportunities that change provides, a culture that employees and management shape with ­intention and reflection,” says Chairman of the Supervisory Board Peter Bauer. But what exactly does this mean? What behaviors will help us on this journey? And do we now have to do everything differently? No. We do not need to ­revolutionize our corporate culture, which is the result of decades of growth. Rather, we need to continue helping it evolve. Ulrike Salb, Head of the ­Culture@OSRAM initiative, thinks that much of what makes up our corporate culture serves as an excellent foundation for tackling this challenge. “The strong bond that employees share is what makes OSRAM so special. It also helps us to successfully handle difficult projects or crises,” she says.

We can build on this strong sense of unity when asked the question about where we hope to still do even better. To foster innovation, we need to become even more open and willing to take risks, which includes daring to do something new and also having the courage to fail. Mistakes are permitted – but they should be ­acknowledged and serve as a learning opportunity. Our company’s history is the reason why we often still think in very hierarchical and process-related terms today. However, to seize the opportunities of the future, it is important to act more independently and on equal footing. All of this is easier said than done.

“The strong bond that employees share is what makes OSRAM so special.” Ulrike Salb, Head of the Culture@OSRAM initiative

Leaving our comfort zone

“Change also means constantly having to leave our comfort zone,” Ulrike Salb says. It is widely known that we tend to fall back into old patterns. But it is possible to break out of them if we repeatedly remind ourselves of the right path for our mutual success. We all can do our part by considering what kind of conduct will benefit the goals and strategy of our own units, starting with ourselves and changing our own behavior first. In the spirit of Gandhi, be the change you wish to see.

The Golden Circle:

What, how and why

On his quest for the factors that make a company successful, management consultant and author Simon Sinek came up with a simple model – the golden circle. It shows that it is not just what we do, but how and why we do it that counts. In other words, corporate culture plays a central role because it forms the HOW of a company – how do we interact with each other? It describes the strengths, values and cultural pillars that make a company stand out from its competitors – and becomes a factor in its success.