Corporate culture attracts top talent, drives growth

• An established culture drives growth in companies.
• Top talent is attracted to company values.
• Promoting from within helps reinforce culture in a company.

Corporate culture is a two way street, on the one side, it is driven by the management who lead and guide and on the other side, it guides and directs staff as they execute their day to day duties.

In his research paper ‘When building new businesses, culture matters’ Markus Berger-de León, a senior researcher writes; “As companies build their work culture, individuals looking to join the workforce must be aware of core values behind any company they wish to join.”

This means that, when individuals go out seeking employment, they must look beyond certificates of merit; rather, “…they must consider their cultural fit and whether they stand for the core values of the company they wish to join, because managers are looking for that,” Leon writes.

He gives an example of a European company that he says started as a third-party installer of solar panels but eventually developed a new business venture to help small and medium-size businesses and households navigate the energy transition.

“To support the corporate venture’s ambitious growth plan, which included hiring more than 500 new employees, leaders created a hiring process that included an interview dedicated to assessing culturally fit staff,” Leon details.

What this means is that, to meet the high number of new employees, the human resources team moves to look for ‘culturally fit’ persons beyond certificates of merit.

“After hiring this new team, the corporate venture’s leaders went further to create a unique culture separate from the parent company,” he goes on to detail.

Understandably, compared with start-ups, corporate ventures have great advantages in sourcing and attracting talent for the mere fact that they have much more established credentials and the financial muscle as well as institutional resources.

“Our research shows that early involvement of in-house talent specialists can help corporate ventures avoid some common pitfalls when it comes to setting up people plans,” Leon writes.

By involving corporate HR early on, corporate ventures can define outcome-based hiring metrics, identify potential obstacles, and gain transparency on recruiting efficiency.

“However, corporate ventures also face hiring challenges, including convincing the most cutting-edge developers and entrepreneurial talent to join their ranks,” the research shows.

For this matter, it is values and culture that will attract top talent and not the mere fact that the company is well established.

“Top talent may choose to join startup so that are promising rather than established ventures…it is the culture and values that will make a company stand out and attract new talents,” he concludes.

Here is another example the researcher gives to emphasize culture in attracting talent and meeting business goals.

Circulee, a German sustainable IT hardware and services company, defined it’s culture early on during the staff hiring process. “According to the company’s CEO, culture creation involved everything from how team members interacted with customers to how they marketed environmental impact,” Leon details.

He says, with the underlying beliefs defined and reinforced, the company focused on hiring only the right people with the right mindsets.

“As a result, everyone was on the same page when it came to doing business with suppliers and working together as a team,” that was the outcome; a team with the right mindset and achievement of business sells goals.

Steps to build a healthy culture that creates value

According to the research findings, companies can take the following three steps to create an authentic and lasting culture.

Step 1: Define underlying beliefs

Defining core underlying beliefs can help create a shared understanding of values from the get-go, the researcher advises.

“Founding team members will not accept a venture’s culture if they are not part of defining and sharing it,” he cautions.

“Although a corporate venture’s culture should be consistent, it will likely evolve as more people are hired,” Leon goes on to expound.

The researcher says, in the long run, company leaders and founders can identify shared problems, particularly with people who were not hired by the founders.

“In doing so, company leadership can stay on top of the changing culture by articulating a vision early, holding ongoing conversations with different groups, and keeping the culture alive with stories and transparency between departments,” he details.

Step 2: Focus on leadership

Further still, Leon says; “When forming the leadership team for a new corporate venture, deciding whether to hire internally or externally is a critical step.”

The research shows that, hiring an external CEO or Managing Director (MD) offers at least an equal chance of success as choosing an internal candidate.

In fact, the research shows that, within the top 5 percent of CEOs, almost one-half were hired externally.

“However, bringing in external leaders requires a careful balance with the rest of the team,” he warns.

Leon says according to the research findings, in certain roles, opting for an internal candidate can be highly advantageous.

“For example, a CFO promoted from within already knows the company’s financial policies, systems, and procedures, making it easier to tap into existing infrastructure,” he writes.

On this point he adds that, if the company requires large partnerships or commercial agreements with enterprise customers, an internal revenue leader can leverage existing relationships as opposed to bringing in new talent.

“By contrast, when a corporate venture aims to develop new technologies or adopt agile ways of working to accelerate its speed to market, an external hire may bring the fresh perspective and expertise needed,” he explains.

On the other hand, Leon gives another example in which he says; “Although many ventures try to use their existing HR teams, traditional HR policies can slow down hiring and other processes or block innovative compensation models.”

“A dedicated HR leader, whether internal or external, but who has some independence from legacy policies can be a significant advantage,” he says.

Overall, Leon sums up with; “…the right mix of internal and external hires depends on the desired culture.”

“A higher proportion of internal hires typically infuses the mothership culture into the new venture, while a greater number of external hires can help establish a distinct culture and new ways of working,” he concludes.

Step 3: Model and celebrate desired behavior

In a very unique way, the researcher emphasises that the most important factor in establishing a corporate venture’s culture is leaders who model that culture.

Here, he emphasizes that leaders should ‘live and breath’ the culture: what they do, who they promote, and how they communicate verbally and nonverbally.

“Celebrating desired behavior is just as important as calling out unwanted behavior, regardless of who performs it,” he writes.

Leaders, managers, and employees are all on the same team, they are in the same boat rowing in the same direction to establish and uphold the company’s culture.

“Leaders can align team norms and values around cultural artifacts, and they can celebrate their teams’ differences in geographic locations, backgrounds, and working styles while upholding a central culture unique to the venture itself,” he details.

As we saw in the first part of this article, the researcher warnes that, “…attempting to fake or force a culture will disrupt operational efficiency and mar a corporate venture’s reputation.”

“Authenticity in culture is nonnegotiable,” he writes and emphasizes the fact that indeed culture must be authentic since it hails from the values of the company which are unique.

Leon points out that culture (genuine, authentic and unique) ultimately helps the parent company to drive its venture into a fast-growing business that delivers long-term value.

Read also: Why culture isn’t soft—It’s a hard business advantage