LONDON, United Kingdom — In Fortune’s 2016 list of the ‘100 Best Companies to Work For,’ there is only one fashion company — American department store, Nordstrom Inc., which ranks at number 92. Indeed, if fashion companies want to compete on the culture front with top-ten firms like Google or Boston Consulting Group, they have significant work to do, and emotional culture could be a good place to start.
According to a study released in January by Harvard Business Review, when companies think or talk about corporate culture, they tend to refer to “cognitive culture,” which sets the tone for how customer-focused, innovative, team-orientated or competitive employees should be. But “emotional culture,” which is often overlooked, arguably plays an equally important role.
Defining emotional culture
Sigal Barsade and Olivia O’Neill, authors of the Harvard Business Review study, describe the distinction between cognitive and emotional culture as “thinking versus feeling.” The two types of cultures are transmitted differently: while cognitive culture is usually conveyed verbally, emotional culture is often expressed through non-verbal cues such as body language and facial expression.
Barsade and O’Neill found that employees thrive in environments where joy, love and fun are the predominant cultures, as opposed to anger, fear and hostility. Moreover, the study found such emotions can influence employees’ creativity, decision-making, quality of work and commitment.
“If you walk down the street and ask the average person what they think ‘emotional culture’ means, they would probably jump to the conclusion that it’s an environment of temper, tantrums and tears,” says Helen Rosethorn, partner at Prophet, a brand and marketing consultancy. “What we need to do is to allow the word ‘emotion’ to be seen as a positive force and not as a disruptive one.”
Why emotional culture matters
“[Employees] look at where the cool jobs are, where the sexy jobs are, where the fun jobs are, and where the long term commitment and loyalty jobs come from,” says Marshal Cohen, chief industry analyst of the NPD Group. “The key is to create a culture that, in turn, creates longevity and loyalty.”
Indeed, emotional culture can have a “powerful impact” on the performance of a company, according to Paul Meehan, a director at Bain & Company and managing director of Europe, the Middle East and Africa.
At a time when it is commonplace for fashion businesses to have multiple outposts around the globe, emotional culture can provide the glue that binds an organisation together. And in fashion, an industry where many companies' output relies on creativity, “Leaders of successful companies should actively foster a climate where creative innovation is encouraged, which may include ‘failures’ or efforts that don’t work,” adds Douglas Labier, a business psychologist and the founder of the Center for Progressive Development, in Washington.
“When you make it easier for people to have a great personal life, it breeds creativity and happiness,” Tory Burch, founder and chief executive officer of her eponymous American lifestyle brand, which has 3,000 employees, previously told BoF. “As a working mother and an entrepreneur, I wanted to create an environment where people feel that they can have a family life and a fulfilling career. We want people to have the flexibility to take their children to the doctor or watch them in an after-school basketball game,” she said.
Implementing emotional culture
Every company has an emotional culture, whether it’s a culture of freedom of expression or suppression. An organisation’s emotional culture can be improved by something as simple as an occasional office gathering or relaxing the rules of office decor: “Photos of employees laughing at social events can signal a culture of joy. Signs with lists of rules and consequences for breaking them can reflect a culture of fear,” write Barsade and O’Neill.
Julietta Dexter, founder and partner at PR agency The Communications Store, which has 123 employees and represents clients such as Net-a-Porter, Acne Studios and Topshop, believes that understanding the most basic emotions — joy, love, anger, fear, sadness — is a good place to start for any leader trying to manage an emotional culture.
“Every employee of the company is a human, not a machine or number,” she says. “Humans have emotions, feelings and weaknesses. The concept that people should conceal their emotions or feelings in the workplace is out-dated and suppresses excellence in performance at work.”
Some elements of an organisation’s culture come straight from the top. At Aldo Group, the Montreal-based high street purveyor of shoes, which employs over 20,000 employees and operates in 93 countries, chief creative officer Douglas Bensadoun has previously told BoF the company’s emotional culture comes out of the founder’s values of “infusing a socialist ideology — a kinder, sharing, giving and communal ideology — into what can be a very ruthless capitalist system.” The result is a culture of kindness that emphasises “love, respect and integrity, and reaching your full potential,” he said.
“Cultural change starts at the top,” agrees Meehan. “The process begins with aligning the top team around a common vision of the future, and then rolling out the vision and values to the entire organisation.”
But Barsade and O’Neill emphasise that change must be supported at all levels: “Though top management sets the first example and establishes the formal rules, middle managers and frontline supervisors ensure that the emotional values are consistently practiced by others,” they said. “They should ensure that the emotions they express at work reflect the chosen culture, and they should speak explicitly about what is expected from employees.”
Barsade and O’Neill found that people in groups can “catch” feelings from others in the form of emotional contagion: “If you regularly walk into a room smiling with high energy, you’re much more likely to create a culture of joy than if you wear a neutral expression.” In the same way, negative feelings can spread like wildfire — so being able to measure, understand and respond to such emotions is vital.
Some companies have implemented team activities, or schemes to foster positive emotional culture. In Tory Burch’s, ‘Day It Forward’ programme, “Each team receives a paid day off to do something together in the spirit of giving back, whether it’s a coat drive or a fundraiser for global literacy campaigns,” Burch told BoF. Not only does the charitable organisation benefit, but “it’s great for the team,” she said.
At cosmetics retailer Lush, which has 928 shops in 49 countries and employs about 16,000 staff, directors ask staff members for three wishes each year. “Then we see how many we could make come true,” says Hilary Jones, ethics director of the company.
Meanwhile, TCS works with a partner company called ‘Courageous Success.’ “We work with coaches to focus on our own emotions, but also to understand the emotions, feelings and triggers of our closest colleagues. This can be hugely helpful in knowing what pushes an emotional button for someone,” says Dexter. “We are also piloting a meditation week to help team members work through their emotions at work, how to control stress, anxiety and difficult relationships with colleagues,” she adds.
Feedback on feelings
To monitor an ever-evolving emotional culture some companies have started using software like Niko Niko, which enables employees to log their daily emotions at work, helping the company to view correlations between their mood and productivity.
Jewellery brand Pandora encourages staff to give feedback to the organisation in an anonymous annual survey. “One of the topics that arose in the last survey was the need for stronger communication, so we have implemented an employee council where a representative from each department will meet and discuss issues, and come up with suggestions for improvements,” says Bethan Lewis, vice president of human resources at Pandora.
Tory Burch uses a ‘Buddy Values’ system, “named after my father Buddy Robinson, who treated everyone with kindness and respect,” Burch told BoF. Each year, the employees who best embody those values are awarded the Buddy Award and a prize trip — in 2014, the winners spent a week in LA.
However, not all leadership agrees on the role emotional culture plays in a business. “Too many companies think of culture as a way to make people feel good about where they work, and not as a way to help employees — hence the organisation — perform better,” says Meehan.
But while some leaders may view changing emotional culture as difficult because it entails influencing people’s beliefs and habits at work, “companies shouldn’t have to wait for a crisis to precipitate cultural change,” he adds.
“When people want to do things right, and want to do the right thing, companies have an invaluable asset,” he says. “It’s the one thing about a business that rivals can’t copy. As a result, it can be a lasting source of competitive advantage.”
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