Innovative Thinking For Corporate Culture

Kevin Corley, Visiting Professor at IE Business School

The notion that corporate culture is an important variable in organizational success is nothing new. Managers and researchers alike have known for decades that corporate cultures can be powerful influencers of behavior, leading employees to do both good and bad for their companies and the larger society. What we are just beginning to learn, however, is that corporate cultures are neither as stable nor as insular as conventional wisdom (and academic research) would suggest. Nor should they be.  

Take, for instance, the case of Apple. Many would assume that the culture of a company so averse to outside inquiries and concerned about its privacy to the level of being called one of the most secretive firms on the planet (NY Times story) would strive to maintain a corporate culture insulated from impact by the outside world. And yet, when one looks closely at the activities and structures Apple has in place to not only accept new principles into its culture from the outside world but to also spread that culture out past its corporate boundaries, one quickly begins to see that Apple finds value in making its culture accessible to the outside world. The same can be said of Google , New Belgium Brewing , Harley-Davidson , lululemon and many other successful companies that find permeable boundaries with the outside world a must in a competitive landscape like today’s, defined more and more by internet mastery, social-media savvy, and a strong global presence.

That competitive landscape increasingly forces organizations to deal with demands for transparency and authenticity. Demands that speak to a more primal paradox all business organizations face: how to balance the need to be similar with the need to be unique. Similarity is driven by pressures for isomorphism (providing legitimacy) and classification (enabling comprehensibility); uniqueness is driven by pressures for competitive advantage (maintaining inimitable resources) and collective esteem (preserving organizational prestige). Organizations often play within a very narrow bandwidth as they try to tease out a balance between these tensions. Claims of authenticity provide one form of resolution: allowing the organization to appear seamlessly aligned with a set of external cultures while simultaneously innovating and guiding these cultures forward. Cultivating one’s corporate culture for outside interaction can set the table for genuine claims of authenticity.

My coauthor (Spencer Harrison, Boston College) and I recently undertook a research project aimed at understanding more about cultural cultivation, or the mechanisms that facilitate the intermingling of a company’s corporate culture with external cultures found in the broader society (for example, enthusiast groups, user forums, open-source communities). Our study unveiled typical practices utilized by companies to both seed and infuse their corporate cultures. Cultural seeding (the spreading of cultural values out into external cultures) practices include traditional actions such as advertising, marketing and participating in trade-shows, but also more innovative (and more effective) efforts such as: hosting youth competitions or events related to the company’s areas of expertise, thus teaching a new generation about that area; sponsoring philanthropic efforts tied to issues the company cherishes; and establishing user communities focused on new or emerging areas the company wants to promote.

Working cultivation the other way, these companies also practice cultural infusion (bringing new cultural material into the company) in various ways. The most obvious and widespread practice involves the careful selection of new members that embody the ethos (why we do what we do) and style (how we do what we do) desired by the company to keep its corporate culture fresh and energized. Companies also fervently scan their external environments for new ideas and emerging trends that could provide a spark to their corporate cultures. This scanning is best done through direct interaction, which is why getting employees out into user communities and other venues where customers and users interact (whether physically or virtually) is key to effective cultural infusion.  Of course, when these new ideas and trends are spotted it is not always easy to incorporate them into internal cultural practices. This is why these organizations also have internal expertise in translating new values and practices from the external cultures into values and practices that make sense within the company’s current corporate culture.

A great example of these cultural cultivation practices (and their sometimes reciprocal effects) is found in the outdoor sports manufacturer Black Diamond Equipment (hereafter BD). Finding itself at the forefront of climbing and skiing hardware, BD has mastered the art of cultural cultivation as a way to not only retain its industry leadership, but also maintain its vibrant and strategy-driving culture. It starts with BD’s commitment to making sure a substantial part of its employee-base is core users of the very products the company manufactures.  This insures BD is not only at the vanguard of product innovation (after all, the employees want to have the best equipment possible for their outdoor pursuits), but also has a natural connection with the user communities where new ideas and trends emerge. BD has also developed its product catalog into a sort of “outdoor journal” where insiders publish essays about their climbing and skiing exploits (helping to seed the company’s ethos and style with customers) and outsiders contribute stories about new trends affecting these sports (helping to infuse those trends into the company). Over time, BD has developed internal systems that are elastic enough to allow employees the freedom to experiment with new ideas and accommodate work practices that encourage interaction with external sources.

Lego is another embodiment of these cultivation practices. Although Lego is a family-owned organization with a history of internal innovation, they have begun to reach out to customers, creating a webspace – CUUSOO - where customers can suggest and vote for new products. As one of their marketing directors has noted, enabling customer input has infused new life into Lego’s already rich culture: "Like every large company, Lego has a ‘must’ culture - you must do this; the open source developer community has a 'can' culture - I do this because I want to, because I can. The value of the outside-in model is that it brings a different culture inside your company."

Ultimately, our research shows that companies can no longer assume it is best practice to maintain an insular and protected culture. Especially for those firms who rely on enthusiast communities, niche customer bases, or user innovation, the idea of cultivating one’s corporate culture for external exchange is becoming a de facto necessity in our age of media-driven, fast-paced change. To keep up – or, even better, to lead – a company must be willing to think beyond the boundaries of its corporate culture and realize the potential inherent in interacting with those on the “outside” in a way that enhances both the firm’s success and that of its key stakeholders.

By Kevin Corley, Visiting Professor at IE Business School and Associate Professor at W. P. Carey School of Business, Arizona State University

[This research paper has been reproduced with permission of the authors, professors of IE Business School, Spain http://www.ie.edu/]