Successful Corporate Citizenship: Believing in the Power of Culture

Submitted by Thomas Knowlton

By Tom Knowlton and Nadia Gomes

After laying out the framework and examining the fundamentals of strategy and integrated structure, our last post focused on the importance of “engaged leadership” as an accelerator for corporate citizenship. Now, we discuss the role and importance of the other accelerator – culture. 

All Around vs. Top Down

While there is much commentary on the concept of corporate culture, much of it revolves around its importance – often in engaging and retaining employees; and in conveying genuine values to all stakeholders. Further, in most forums, culture is also referenced as something fully dependent on leaders. 

Leaders are indeed the crucial driver behind the shaping and dissemination of culture, however, middle management and all employees need to play a role in helping it sustain and thrive.  So before exploring the importance of culture, it is important to define it - as a function that is influenced by, and that influences, all levels and facets of the company.

What Makes a Culture Strong?

The best corporate citizens understand the competitive advantage of having a strong culture, and the importance of aligning strategy and culture.

A survey recently released by Deloitte contends that organizations that instill a “Culture of Purpose” are more successful and have a history of strong financial performance., As Deloitte Chairman, Punit Renjen states in the research:

 “Exceptional firms have always been good at aligning their mission or purpose with their execution, and as a result, have enjoyed category leadership in sales and profits."

Evident in many top corporate citizens, such as Starbucks and its founder’s commitment to developing an ethical and responsible business model, Unilever and the company's focus on sustainability, and as we highlight below, Novo Nordisk and its focus on finding a cure for diabetes.

But according to the Deloitte survey, most employees and executives don’t believe their companies understand the value of building this culture:

“68 percent of employees and 66 percent of executives believe businesses do not do enough to create a sense of purpose and deliver meaningful impact.” 

Successful culture, therefore, requires that leaders not only define and communicate values but demonstrate them through actions and in the very way in which business is conducted. Engaged leaders, which we noted as the other “accelerator” in TCC’s framework, are critical to building and driving culture throughout a company and in engaging employees who will adopt and sustain the culture.  That's where the CEO plays an important role.

The CEOs at IBM, for example, have demonstrated the value of building a purpose-driven company through the Smarter Cities campaign. As Stan Litow, VP of Corporate Citizenship at IBM points out, “IBM thinks of it as a growth strategy. Our corporate responsibility and philanthropic activities are deeply connected to our core values.”

Building a Strong Culture: Pulling the Elements of the Framework Together

In companies like IBM, a “Culture of Purpose” is strong, and the business and its employees understand the role of the company in society. 

But what if a company’s culture of purpose needs development? What is the role of the corporate citizenship leaders in helping build that culture and how do they do it?

Here we refer to the other elements of the framework - components that fall within the overarching element of culture:

• Strategy: Citizenship strategy that is driven by stakeholder issues, and aligns with the company’s way of doing business, builds a culture that is credible and engaging.

• Integration: Citizenship strategy that integrates all units of the company, builds a culture that involves, and creates accountability within, the whole company.

• Leadership:  Citizenship strategy that is accelerated by engaged leaders, who believe in the core values of the company and lead according to those values, develops a culture of engaged, loyal, and contributing employees, as well as respect and reputation among external stakeholders.

The Novo Nordisk Way: Aligning Citizenship with Core Values

Since 1923, finding a cure for diabetes has remained Novo Nordisk's primary mission. Ninety years later, that almost singular focus on diabetes has come to be coupled with a strong commitment to the core values of the founders, exemplified in The Novo Nordisk Way Essentials – 10 statements that describe what the Novo Nordisk Way looks like in practice.

Serving as a “promise we make to each other – and to our stakeholders outside the company,” the statements are meant to help employees and managers evaluate how their organizational unit acts in accordance with the Novo Nordisk Way. And several allude to the corporate citizenship goals of the company, including: "We are accountable for our financial, environmental and social performance" and "We never compromise on quality and business ethics."

What makes these values different is not their articulation but their complete connection with the company’s ongoing business and its culture. 

Among its efforts to solidify this integration across the company, it conducts Novo Nordisk Way facilitations in which senior employees act as 'facilitators' and travel throughout the organization to interview employees, managers and internal stakeholders of the unit, reviewing documents and looking into local business practices - consolidated observations and trends from the facilitation process are reported to executive management quarterly and the board of directors annually.

This assurance not only helps safeguard the company's culture of responsible and sustainable business practices, it also keeps employees and stakeholders engaged and constantly challenged in the process.

Complementing the Novo Nordisk Way is the company’s Foundation, created in 1951 with a special governance model in mind: the company is “owned” by the foundation, creating a model that not only provides protection to the company but also ensures that it maintains its high ethical standards.

Developing a purposeful corporate culture is critical and a lot of hard work goes into ensuring its longevity beyond initiatives. For corporate citizenship professionals looking to further develop and improve corporate citizenship at their companies, the first step is to assess the company’s level of development in the four core elements outlined in our previous posts: citizenship strategy, integrated structure, engaged leadership and culture. 

Based on that assessment, focus on creating alignment among the four elements and developing programs consistent with those levels.

Previously:

Engaged Leadership: Going Beyond Vision & Values

Developing an Integrated Structure at Medtronic

Building an Effective Stakeholder-Led Strategy

Why Strong CSR Programs Don’t Always Lead to Successful Corporate Citizenship