-
THE PROBLEM Corporate culture is waning.
-
WHY IT MATTERS Culture accounts for 30 percent of market value, according to executives.
-
THE SOLUTION Reengage staff around the firm's core characteristics.
See the latest issue of Briefings at newsstands or read the full magazine in digital format here.
Last year, Nicole Martins Ferreira landed her dream job as the product marketing manager at Huntr.co, an AI-powered résumé-creation company. Her boss welcomed her onto the company’s core team, setting a “super collaborative” tone, she says; she calls him the best boss she’s had in her 12-year career. They have two regularly scheduled meetings: a monthly one-on-one, and a daily 15-minute progress meeting with five colleagues.
All of which couldn’t be more normal, except that her boss and teammates are virtual strangers—she’s never met them in person. She’ll perhaps meet her boss soon at an upcoming off-site in Vancouver, Canada, where she wonders what it will be like to share a meal with him, and what he’s like when he’s not talking about work. “It’ll be really helpful to have more face time—to just have, like, social time,” says Martin.
For decades, most casual workplace banter was not about work. Colleagues talked about The Sopranos or planned the next basketball-league practice or swapped tales of woe about parenting in the age of flip phones. But there’s none of this at Ferreira’s workplace—and her experience is the new norm for millions of workers: 58 percent of the US workforce, or 92 million workers, report that they can work remotely sometimes, according to one study. Roughly one in six companies is entirely remote. Yes, workers like Ferreira are employed, with all the trappings of work—company laptops, deadlines, and performance reviews—but they’ve never met a colleague in person, and they’re not attending the company holiday party. No matter how dedicated they are, their overall engagement with their company and coworkers is, by definition, impersonal and fragmented.
Yes, workers are employed, with all the trappings of work, but they’ve never met a colleague in person.
To be sure, shifts away from in-office work culture appeared long before the pandemic. Average two-way commutes rose to 56 minutes in 2019, according to census data, with nearly 10 percent commuting at least two hours each day. These numbers have bogged down diversity and inclusion efforts, because lower-income workers often endure even longer average commutes. Companies have mostly looked the other way; they’re still hosting Friday lunches and happy hours.
Today, nearly everyone agrees that the strength of corporate culture is waning, month by month, and needs what many experts call a reboot. Sure, some companies, like Amazon, have returned workers to the office five days a week, and there’s talk that more big firms will follow. But the vast majority of companies are operating on hybrid or remote arrangements that seem to leave little room for culture. How, leaders ask, does an organization maintain a thriving culture among people who have never met—and whose only relationship consists of talking about work (and minimally at that)? Nicole’s team is “quiet on Slack,” meaning that some days, her only work discussions take place in that 15-minute midday meeting.
Four years after the pandemic began, executives are struggling to find answers to a problem that deeply affects them. They say culture accounts for 30 percent of a company’s market value, according to the World’s Most Admired Companies list—produced each year by Korn Ferry in partnership with Fortune—and 60 percent of leaders say they’ve given up on predominantly in-office culture. Workers increasingly see themselves as fungible, and jobs as nomadic. “Culture is being challenged,” says Mark Arian, CEO of Korn Ferry Consulting. “I’ve talked to a bunch of CEOs. I don’t think they’re prepared for this.”
*****
A century ago, chief executives believed that companies were essentially villages. The founders of the multinational corporations that came next applied that belief quite literally: They built company towns, like Lowell, Massachusetts (textiles), and Hershey, Pennsylvania (chocolate), and filled the social calendars of factory workers and managers alike with sports teams and social-club events. The logic was simple: “If the village isn’t talking to each other and building up relationships of trust, it’s not going to function very efficiently,” says Robin Dunbar, emeritus professor of evolutionary psychology at Oxford University, who studies the history of corporate culture.
Company towns provided employees with ample shared experiences, interests, and values, which is relevant so many years later because that’s still a defining feature of corporate culture, says Denise Rousseau, professor of organizational behavior and public policy at Carnegie Mellon University. Ideally, a set of common assumptions and beliefs becomes ingrained. This is invaluable across an organization: An acculturated employee knows innately how to behave in a variety of situations, which in turn lessens the need for micromanaging and specific trainings. For example, imagine that a company’s mantra is to always make the customer smile. John the retail staffer might not have been trained specifically to handle angry customers, but if he knows the firm’s mission, he’ll be capable of coming up with a solution on his own—an accomplishment that will give him a sense of both autonomy and pride.