There are companies that have been successfully asserting themselves on the market for decades, consistently delivering quality and advancing innovations. According to Michael Hilti, Chairman of the Board of Directors of Hilti, it is not the products that make a company so successful in the long term, but the people.
If you ask the employees of the drilling machine company why they work so effectively and motivated, the corporate culture comes into play. An important element of a healthy organization is a common culture (see figure).
Figure 1: Honeycomb model of the Healthy Organization (Kallenbach 2016)
The Liechtenstein company Hilti has proclaimed the corporate culture as the most significant driver of its business success and has been a model company in terms of corporate culture for decades.
We have taken a look at what makes this company so special and how it has managed to make corporate culture an integral part of the company and thus a clear competitive advantage in the VUCA world.
Definition of corporate culture
The corporate culture is defined as the set of shared values, norms and attitudes that shape the decisions, actions and behaviour of the members of the organisation.
Shared values and balanced leadership style
Hilti's values were shaped by company founder Martin Hilti. With the values
giving space,
transfer of responsibility,
integrity,
commitment,
courage to move out of the comfort zone,
and teamwork, he laid the foundation for a collaborative culture.
The values that shape Hilti lead to flat hierarchies, more humanity and more esteem in the company. All these values are still reflected in the management style today and are codified as "Guiding Principles" in the company.
Performance, namely in a team, is a clear component of the salary model as a variable component in the salary of 10-15%. Half of the company's success depends on this and the other half on team performance. Once a year, the team jointly determines the performance targets, i.e. is directly involved.
In addition to the collective, the individual is also supported: In the individual appraisal interview, managers must demonstrate how they can further develop the potential of their employees. The training of managers on the basis of a guide for employee appraisals is another important point in strategic personnel development under balanced leadership.
Cultural training anchors community culture
The central values are systematically passed on and anchored to employees at all levels in regular cultural training sessions lasting several days. The special: All management levels, including the Board of Directors and the Executive Committee, undergo this cultural training. All Hilti managing directors are involved either as participants or moderators - the "taking time" factor becomes very clear here.
As part of the induction training, new employees receive the most important information about the Group and its corporate culture in a seminar lasting several days.
Measurability of corporate culture - only what gets measured, gets done!
Value-compliant management behaviour has proven to have a positive influence on employee satisfaction and morale and promotes loyalty. There is also a correlation between employee satisfaction and customer satisfaction.
The codified values form the construct of the corporate culture, the dialogue-oriented, balanced leadership and the cultural training in all areas and management levels ensure a holistic penetration in the company. But how can one determine whether all mechanisms are working and whether the corporate culture is really being lived?
Hilti has implemented an employee survey as an important instrument for measuring corporate culture. This survey is regularly carried out anonymously and is made available and evaluated to around 14,000 employees in 26 languages.
Conclusion:
Hilti has identified employees and corporate culture as key drivers of corporate success. Modern personnel policy today includes employee appraisals, group work and performance bonuses as standard. But why do so many companies fail?
Hilti shows that in addition to formal processes, these must also be taken seriously, controlled and measured in order to be lived. Another important approach is not to see the corporate culture as a temporary project, but to implement it as an integral part of everyday business life.
Dealing with one's own values and expressing them requires a lot of time and resources. The example of Hilti shows, however, how important this focus is, since the corporate culture is an important driver of business success, making the company more agile and healthier and thus successfully asserting itself in the "permanent beta" of the VUCA world.
Literature:
Förster, Jan-Hendrik: Culture is the foundation of success, In Wirtschaftswoche, under: https://www.wiwo.de/erfolg/management/management-kultur-ist-fundament-des-erfolges/8584896.html (published on 13 August 2013)
Hilti, Michael (2004) Annual Accounts Discussion - Information for the Media, Hilti Aktiengesellschaft. Schaan/Zurich
Rudzio, Kolja: Corporate Culture: Magic, Profit and Gipfeli, In: Zeitonline, under: https://www.zeit.de/2003/39/Unternehmenskultur_Kopie/seite-4 (published on 18.09.2003)
Wallener, Claudia: Hilti Germany wins third place in "Germany's best employer" award, Hilti website, https://www.hilti.de/content/hilti/E3/DE/de/company/media-relations/media-releases/greatplacetowork.html (published on 19 March 2018)