The Coaching Effect Blog

The Coaching Effect Blog

    Corporate Culture: How it Affects Sales Performance

    by Kathy Collins / September 9, 2014

    Editor's Note: This post has been updated for accuracy and comprehensiveness on May 20, 2020. Photo by Hattie Kingsley Photography.

    Corporate culture can be defined simply as, "the way we do things around here," or "it's our company's personality." Edgar Schein, PhD, (MIT) Sloan School of Management, Cambridge, defines corporate culture as, "A pattern of shared basic assumptions that the group learned as it solved its problems that has been worded well enough to be considered valued and is passed on to new members as the correct way to perceive, think and feel in relation to those problems." Regardless of how you define corporate culture, there is no doubt that the performance potential of a leadership team is elevated by the corporate alignment of employee values.

    “If you don’t understand people, you don’t understand business.” -Simon Sinek

    The claim that organizational culture is directly linked to increased performance is founded on the perception that good culture plays an important role in generating a competitive advantage over other similar companies.  Likewise, culture will stay linked to excellent performance only if the culture is able to adapt to changes in environmental conditions internally and externally.

    Shaping good corporate culture is one of the most critically important responsibilities of today's executive leadership.  Attaining this goal is challenging on many levels, but among the most difficult are 1) deciding what type of corporate culture to shape, and 2) how to shape and implement that model of culture?

    Among the many questions to answer in approaching this decision, the most important are:

    • Understanding what good organizational culture is and how it affects the sales performance of your team.
    • Learn and comprehend why an imbalanced organizational culture can disengage your team and lower sales performance standards.
    • Plan and implement a culture change plan that engages, reflects the positive in order to drive sales performance and overall team satisfaction.

    "Cultural fit is incredibly important on a candidate's abilities to use their skills," says Nancy Rothbard, an associate professor of management at The Wharton School. "You have a positive effect through skills, but (poor) culture can cancel that out."

    Recently, scholars have conducted numerous studies to further define and quantify this question. An organization that develops and maintains good corporate culture has been proven to provide the following benefits to it’s employees:

    • Mutual trust and collaborative atmosphere
    • High-level, efficient decision-making process
    • Facilitation of open communication
    • A strong sense of community identity 
    • Shared understandin
    • Assistance of helping employees match behaviors with performance outcomes
    • Increased brand value
    • Increased productivity which, in turn, ultimately leads the team to elevating sales performance

    After answering foundational questions and understanding the impact of good corporate culture, understanding the different types of corporate culture and how they may fit, or not fit, your leadership style is the next step. The following graph depicts four different corporate culture types within two primary dimensions.  The graph highlights whether or not the decision-making process is based on subject intuition or if corporate culture dictates that decisions and requires objective proof. 

    Culture Types

    Competitive Culture:

    In competitive cultures, the driver is personal achievement.  These organizations value knowledge and praise those with ‘killer’ instincts. This culture loves competition, sales performance contests, and tend to celebrate individual achievements over the team accomplishments. Cultures that tend to drive too much competition internally may form unhealthy cliques or mini-cultures surrounding sales super performers. Competitive cultures most favored functions include sales and product development.

    Controlled Culture:   

    In controlled cultures, the main driver is order and alignment that are formed around clear objectives and goals.  Leaders within a controlled culture create hierarchical reporting structures.  These leadership structures put power/authority at the top with lower management and sales levels left feeling like individual competency and achievement are not valued at any level below the top. Employees are left feeling un-empowered to make valuable decisions without cutting through the red tape of bureaucracy.  Controlled cultures favor functions that include finance and manufacturing.

    Creative Culture: 

    In creative cultures the primary driver is self-expression. Creative leaders tend to focus on creative brilliance and are not afraid to celebrate individual achievement. Creative cultures like ‘to break the mold.’  This work environment fosters the benefits of working collaboratively and allows teams to self organize. Creative cultures often begin with a visionary leader who is considered an inspiration to his employees. Creative cultures favored functions include research and development and professional services.

    Collaborative Culture: 

    In collaborative cultures, the primary driver is teamwork.  Leadership bases company decisions on a shared view of desired results.  This can often be seen as a drawback in collaborative cultures if leadership does not facilitate an expeditious decision-making process internally.  Collaborative companies prize deep, long-lasting client relationships that foster brand loyalty. Their favored functions include: marketing and customer service.

    “Culture isn’t part of the game, it is the game.”-Lou Gerstner, IBM

    Organizational culture must begin at the top, it’s not something that can be delegated. Leadership needs to complete the awareness process in order to understand how each sales leader in the company is individually and collectively influencing the whole of their corporate culture.  

    Committing to the style of culture that best suits your ideology and business acumen is one of the most important decisions any business leader can make in the course of their company...implementation and perseverance in protecting that valuable culture will serve your company's success for years to come.

    The Coaching EffectFor more leadership resources like this, subscribe to The Coaching Effect (monthly) Newsletter: 

    Get the Effect

    Tags: Coaching Sales People

    previous post Coaching Conversations: Creating Trust Relationships
    Next Post Four Critical Sales Coaching Metrics Nobody Measures
    Kathy Collins

    Kathy Collins

    Kathy Collins is the VP of Client Success at Ecsell Institute. She currently handles software maintenance, client needs and support and all company operations. As an empowered facilitator, she dedicates her work to efficiently improving upon strong organizational process and the corresponding measurement and tracking that coincides.