Corporate Culture & Employer Brands

For J&C

J&C: Could you start by explaining to us what corporate culture is?

DG: Corporate culture is primarily mission, values, corporate standards and practical leadership, which form a triangle with the last of these at the top.

J&C: Practical leadership - you mean that's what management orders staff to do?

DG: Not quite. Management does things which either confirm their values or don't confirm them. If management says one thing and at the same time does something different, then those values which it proclaims start to drift away. There is a discrepancy between actions and speech, between what has been said and what has been done by top managers. So corporate culture is not so much words, it's what's between the words, it's mission, values, corporate standards and it's how a company confirms these. Any company is a projection of its leader.

J&C: So corporate culture concerns both the inside and the outside of the company?

DG: Well let's put it this way. You can create the external 'wrapping' of a company with the help of good quality PR, but inside some things are good and some things are bad. When a potential candidate for a job sees the company from the outside it looks like everything is beautiful, everything works well, but when he gets inside he feels uncomfortable. It's like a drug addict going through cold turkey. It takes him a long time to adapt to the fact that things don't correspond to what he's seen and heard and very often people just leave.

J&C: So what should a company do so that there's no performance gap?

DG: That's a good question. For a good corporate culture it's very important to share powers, to evaluate people regularly and see how they're doing. Who formulates corporate culture? Naturally it's the human resources department, then the public relations department, but most of all corporate culture is formulated by the person at the top of it. Companies as a rule are created by one person. Then that person realizes that he can't manage everything himself, he chooses people to suit him so that they'll work well together. After a while the company grows and these people in turn take on their people so we get a kind of hierarchy, and thus the whole company is created on the basis of the manager's preferences. Why do I say that a company is always a projection of the leader? If the leader puts a totalitarian stamp on the company then it'll function like a totalitarian regime, while on the other hand, if the leader of the company is very tolerant, very academic - if he collects paintings, for example - then that will be reflected by the company.

J&C: But does that mean that the ethos of the company is a matter of chance, of who just happens to be at the top of it?

DG: Well you know, any company depends on the person at the top, but all the same there's a set of measures which can be made part of the PR program and there is a scenario whereby the CEO distances himself and gives the PR and HR specialists carte blanche and people work at all this.

J&C: What happens if someone is really keen to work for a company because of its reputation, manages to get a job there, then gets disappointed and leaves? How can a company find out that that is the reason why the employee left?

DG: In the majority of decent companies there's the so-called exit poll, if someone comes, doesn't like it and leaves, then he is obliged to explain why.

J&C: But in that case it's already a fait accompli. What can a company do to forestall this?

DG: Well, you have the information from the exit poll, then you have an indication of turnover and on average this should be no more than around 4 to 5 percent. In our holding company the average turnover is 1.26 percent, in the distribution company it's 1.32 percent, in the integration one it's about 8 percent. If you have a company where the turnover is 20 percent, then that's abnormal.

J&C: What happens if you have a company and no one has given any thought to whether it has a corporate culture or not and whether one is needed, such as former Soviet institutions?

DG: Well there is always a corporate culture, it may be very specific, but it's always there in any case. That's the first thing.

J&C: For better or worse?

DG: I wouldn't use terms like that, it's not something you can evaluate. Better or worse for whom? If someone's been used to working in the armed forces and he comes to a company where the corporate culture is the same, then he's going to feel comfortable in a culture where he gets orders and carries them out and then has to report, whereas if you've got someone who's used to being in a liberal environment and he comes to a very strict company then he's going to be uncomfortable there. When you say it's good or bad, you've got to ask - for whom?

J&C: You've talked about internal newsletters, websites and so on - where should a PR specialist start?

DG: The aim is to provide the staff with a positive psychological environment, that's the first thing, and secondly, to attract talented employees. If people are happy inside the company then they actively transmit their impressions to others outside, that's obvious. So these are the criteria that can be applied to judge whether a company is bad, which were defined by the HR Committee of the American Chamber of Commerce in October 2004 on the basis of research done in European, American and Russian companies: in first place is a good boss, in second and third place is having a good job with opportunity for development and in third place a healthy corporate culture (integrity, loyalty and collaboration), all of these are the basic paradigms. So you can work on the last two. Salary comes only fifth - interesting, isn't it!

J&C: So what do you need to do to make a company more dynamic?

DG: Well firstly you've got to analyze your aims and secondly, you've got to create channels of communication. If there's no company newsletter, then you need to start one, if the company doesn't hold staff events, then that's also something you need to work on. We have an annual event for staff in the country on the bank of the Moscow River. Next, once the channels have been created, you've got to work out what you're going to transmit through them and the content is all the good things that are happening in that company.

J&C: So people don't feel like they're working in some sort of faceless organization?

DG: Yes, so it's all the good things that you can find, plus maybe even a few bad things so it doesn't look like propaganda and brainwashing.

J&C: Otherwise people are going to feel it's too upbeat and doesn't deal with any issues that they may have at work.

DG: Yes, the basic thesis of academic propaganda is that you should never give exclusively positive information. There always should be a piece of negative information, it works like vaccination.

J&C: Do Western models of corporate culture actually work in Russia?

Verysell Group

Company events are an integral part of building a strong team and fostering a healthy corporate culture.

DG: Well models that have been developed in the West don't take into account the sharp stratification of Russian society. In the West you have an extensive and developed middle class and very few people who are very rich or very poor. But in Russia you have very rich people at the top and there are more of them, a thin layer of middle class, and all the rest - the basic mass - are poor. The poor are not going to share the values which people try to instill in them from above. The middle class is more receptive to them. Society has got to change for these interests to coincide. A middle class has got to appear.

J&C: But we're talking about very large-scale changes here.

DG: Yes, but all the same, things are changing for the better, average salaries in the regions are now closer to $300 and we hope that in 5 years' time that they'll reach $500. In the IT sector things are better and you've got quite a lot of people with a high level of education.

J&C: What was the corporate culture like in Verysell when you arrived and how have you changed it since you've been here?

DG: When I came it was a mono-business, there weren't many employees and I knew most of them by name and surname. That was four years ago. Since then the company has grown fivefold times and it's a big problem making sure that people feel comfortable here. We have our methods - our internal website, our newspaper with birthday interviews.

J&C: And do you feel you've manage to create a good corporate culture?

DG: There are more than 70 people who have worked for more than five years and more than 70 who have worked for more than 10 and we have a very low turnover.

J&C: How do you recruit people for your company?

DG: We have an HR department which selects on the basis of their professional record and also intuition.

J&C: And do you find out why people wanted to come and work for you and how they're fitting in?

DG: People from the HR department go and talk to new employees and ask them how they are and how they're getting on, that's entirely normal. And then from what a person does, how he behaves, his colleagues can see whether he's fitting in or not.

J&C: Why do think there's sometimes such a gap between what PR people say and what companies do?

DG: It's difficult to say. There's a very fine line between PR and propaganda. The PR industry in Europe was created after WWII by British Intelligence Service agents who couldn't find work in advertising because of a lack of goods so there was nothing to advertise at that time. You mustn't overstep the mark, you must talk all the time to staff and to top management. Let's sort out the definition - public relations is maintaining and sustaining a good relationship between the company and its public, in this particular case between the company and its employees. And this should be in the form of two-way communication. An open society presupposes two way communication and that any problem is carried upwards. I'll give you an example - in one of our other offices we set up a postbox and any employee could put a note in there and they were collected by the HR department, so each employee can bring information to the attention of the top echelons. It's very typical of Russia for there to be a gulf between staff and the owner of a company. If there's no exchange of information then after a while the top gets a very weak and distorted picture of what's happening and after a time any company like that is going to fall apart. So middle management should spread information both upwards and downwards and it shouldn't be afraid to discuss problems with top management.

J&C: So there aren't any Potemkin villages?

DG: Yes, top management has to listen.