Culture club: the role of corporate culture in business performance
Corporate culture has long been seen as an important pillar in building and maintaining a successful business. As global competition has intensified over the past two decades and more, not least in the labor market, it has become an even more important indicator of intention, ambition, and differentiation.
Cynics may see it as little more than a corporate buzzword, but there are many others who believe that having a positive corporate culture can make the difference between long-term success or failure. Indeed, according to experts at McKinsey & Company, companies with a strong culture achieve three times higher total return to shareholders than others.
As part of its investment in building and maintaining a strong corporate culture, earlier this year Abdul Latif Jameel launched ‘The Jameel Principles’.
Drawing inspiration from its long-term partner Toyota Motor Corporation and nearly 8 decades of international – cross-cultural – commercial success, The Jameel Principles define and explain the four core values of the founder, the late Sheikh Abdul Latif Jameel, that have underpinned the Abdul Latif Jameel business since 1945, and on which its corporate culture is founded.
We spoke to Faisal Abdalla, Vice President, Corporate HR and Kaizen, about The Jameel Principles and the role of corporate culture at Abdul Latif Jameel.
What is corporate culture and why is it important??
The best definition I can make for corporate culture is that it’s a shared belief or perception that a group of people have about their place of work and the organization they work for.
why is it important? Because a shared belief creates a ‘glue’ – a shared experience – that binds people together. This belief helps to define common behaviors, expectations, and attitudes among that group of people. It is not a dogma to be followed blindly, but an enabling framework that empowers and invites you to innovate and to pioneer, by creatively combining your talents with those of others.
What role does corporate culture play in business success?
The articulation of corporate culture is of paramount importance because codifying it enables it to become a source of sustainable competitive advantage for your business. When we institutionalize our distinctive ways of working – those behaviors and practices that bring out the magic in our people – we can always bank on our business having an edge. A people-centric culture is a force multiplier of business strategy.
It doesn’t matter how big or small you are. It could be a two-person company or a complex, global organization. They all have a corporate culture, whether it’s something they have specifically sought to develop and instill in the business, or one that has emerged over time through their peculiar story of trial and error; culture is often the residue of success.
There is an often-quoted common phrase in business that says: ‘culture eats strategy for breakfast’. This basically means that if your culture does not support or align with your strategy, regardless of what it is, you will find it much harder to achieve. I totally believe this. The two must be complementary. At Abdul Latif Jameel, our fundamental business philosophy (upon which the strategy is built) is called GI4 (sustainable Growth, through continuous Investment in People, Business Technology and Community) and our complementary culture is set out in The Jameel Principles.
It is the symbiotic combination of these two doctrines, and what they stand for, that provides the foundations for our success.
What are the risks of not having a corporate culture?
Corporate culture is by no means the only driving factor of success. But I believe that without a coherent, consistent, well-managed corporate culture, a business is selling itself short in terms of what it could otherwise achieve. It doesn’t mean it will not be able to achieve its objectives, but it makes it harder – as the people are not aligned and working in concert – so the outcomes might not be as good as they could have been if supported by a consistent, aligned corporate culture. Individual execution is one thing; organizational execution is everything for a top tier business, and this is only possible with a deliberate corporate culture.
Is corporate culture fixed, or is it something that continues to evolve and develop over time?
Authentic corporate cultures are definitely not static – they have a pulsating vitality. They must play this vital dual role of providing stability, while driving and guiding the change needed to thrive in a changing world in ways that make us stay true to our core. We are living in a world that is increasingly characterized by the so-called ‘VUCA’ phenomenon – volatility, uncertainty, complexity, and ambiguity. Businesses need to stay agile to be able to deal with these issues and stay relevant in their markets. In the same way, their corporate cultures need to evolve and develop over time to support these objectives.
However, you don’t want a corporate culture that is constantly changing and has a new flavor every day. There should be some fundamental principles that are sacrosanct and should never be compromised, such as integrity or respect, for example, but the way they are articulated or interpreted may need to be tweaked or refined to respond to the evolving dynamics of the VUCA world in which you operate.
What is Abdul Latif Jameel’s approach to corporate culture?
Abdul Latif Jameel already has a big differentiator to many businesses of its size in that it is a family business; one that carries the name of its founder. in contrast to a large, listed multinational, where the CEO and senior leadership team will change every few years, a family business has an inherent consistency and stability in its culture and values that emanate from the values of the family imbued over many years.
I believe we, as an internationally active network of businesses, have a tremendous opportunity to take full advantage of this in the way we develop our corporate culture and interpret our values across our vast and diverse organization, to the benefit of both our business and our people.
This is where The Jameel Principles come in. They act as a North Star to help our people navigate through our VUCA world with our values and our culture.
So, what are The Jameel Principles?
The Jameel Principles are based on four core, and fundamental values. These are the values of our late founder, Abdul Latif Jameel. They took shape under his leadership, and have been championed by our current Chairman, Mohammed Jameel for more than 4 decades. They are manifested by successive generations of the Jameel family, and in the priorities of our business and our people every day.
In drawing up The Jameel Principles, we took a lot of inspiration from Toyota, our automotive partner in the Middle East since 1955, nearly seven decades.
Toyota is globally renowned for the ‘Toyota Way’, a set of 10 principles that serve as the foundation of Toyota’s corporate culture around the world.
Our aim was to do something similar for Abdul Latif Jameel, based on four core values:
- Respect – this is about respecting other people, whether they be colleagues, bosses, customers, or other stakeholders, as well as our individual expectations to be respected by others.
- Improve – we want to encourage people to make incremental changes in the way they do things in order to improve their performance. If 11,000+ people each made a small adjustment in how they do something, the cumulative impact can be dramatic.
- Pioneer – we want our people to think outside the box, to not be afraid of making mistakes in their search for improvement.
- Empower – this is about giving people the freedom and responsibility to make decisions and take responsibility to help shape Abdul Latif Jameel and drive our business forward.
Now, I should say that we are not there . . . yet. The Jameel Principles are not a statement of current fact. They are a combination of our past and an aspiration of how we want our culture to be. As our North Star they guide us in our purpose and provide a framework for personal and collective development.
How did you create The Jameel Principles?
The values upon which The Jameel Principles are based are definitely not new. They are among the fundamental beliefs that have served Abdul Latif Jameel well for nearly 80 years, so far, but these behavioral principles were previously not defined, or codified, and were not communicated across the business as well as they could have been. We realized we needed to change this as part of our efforts to make our corporate culture robust and give it the vitality needed to drive our business ambitions.
In doing this, we wanted to be inclusive; to give our people the opportunity to share their views on the corporate culture at Abdul Latif Jameel and on the values they felt were important for us to uphold. We went out to employees, – our Associates as we call them – as stakeholders at all levels across the businesses, to get their input and their thoughts about these values. This was vital to ensure they are meaningful. They’re not just seen as a top-level policy that is being foisted onto the workforce. It is very important that our people and all stakeholders, from family shareholders down, can relate to The Jameel Principles and feel they’ve had an involvement in their creation.
The Jameel Principles were launched earlier this year; what are your aims for them over the next few months?
My biggest personal focus is to ensure The Jameel Principles are effectively transmitted across the business, so everyone knows what they mean and how to apply them to their own circumstances. But this is just the beginning; transmitting our culture is not only about communication and explanation, but about delivering an authentic end-to end-experience, where our actions bear out our words in the way we engage with our direct reports, our peers, and our management.
We can’t be authentic and credible if there are disconnects between our principles and our practices. We need to constructively look for the reality-gaps between our intentions and our actions; have the insight to understand the systemic and behavioral factors behind such gaps and have the courage to deal with them skillfully but decisively. What we must all fear most is skepticism and apathy. We cannot dwell on and resign ourselves to the barriers that might prevent The Jameel Principles from becoming our shared reality. Truly human leadership, as one of our collaborators – Bob Chapman – calls it, is having the skills, the courage, and the conviction to care for our people like our families – to not be daunted by the odds, and not be discouraged by cynicism. Apathy is infectious. But so is faith. I want to make sure that our leaders project faith in our cultural vision and give authentic expression to The Jameel Principles in what they do every day, and indeed every moment as ambassadors of our culture.
I am very hopeful that our cultural story will make us all proud to be associated with it, since we wrote this story ourselves. Some organizations may take a short cut and bring in an external consultancy to essentially tell them what their values should be. I’m proud to say that there isn’t a single word of consulting in anything we have done with The Jameel Principles. It is all home-grown. Our best consultants were our own people – the inheritors of the late Abdul Latif Jameel’s personal legacy – his proxy family if you like. I feel lucky to be connected to such a historic story of a business with soul, committed to living its values and caring for its people as embodied in The Jameel Principles. I can’t wait to see the new chapters in this story written by our leaders of the future.