Corporate commitment to culture – an integral part of their strategy?

A survey by the Swiss Institute for Art Research and Roland Berger Strategy Consultants

• Emphasis on "social responsibility"
• Competitive advantages little used
• Cultural commitment rarely embedded in formal structures, mostly the preserve of top management
• Three kinds of motivation
• Specific national and industry differences

What strategic aims do companies in Germany, Austria and Switzerland pursue through their cultural commitment? Does cultural commitment generate competitive advantage? What do companies commit themselves to, and who makes the decisions here? These are the questions that a survey by the Swiss Institute for Art Research (SIAR) and Roland Berger Strategy Consultants considers. It found that cultural commitment is motivated mostly by a sense of social responsibility. It is not normally part of a company's strategy, and is rarely used consciously to achieve competitive advantage. And cultural commitment is usually the preserve of top management too. The survey also found there are three kinds of culturally committed companies (commercial, paternalistic and "good citizens"), and that proportions vary from one country and industry to another.

"In the last twenty years, culture has become an issue for many companies, and the cultural scene and business have also come closer together. We wanted to find out whether and, if so, to what extent, companies can benefit from their involvement in culture. We also examined whether companies may have cultural strategies that might be of interest to cultural institutions." This is how Dr. Hans-Jörg Heusser, Director of SIAR, explains what the survey is about.

Between September and November 2003, SIAR and Roland Berger Strategy Consultants interviewed managers and directors of 193 companies in Germany (48%), Austria (23%) and Switzerland (29%) about their cultural commitment (24% SMEs, 76% large companies). Half the companies were in the manufacturing industries, with services and finance accounting for one quarter each. There were sixty-four replies, a response rate of 33%.

In parallel with the questionnaire survey, the quantitative results were verified in eight interviews with business managers by March 2004; this has been incorporated in the present survey brochure.

The emphasis is on "social responsibility"

When asked why they were committed to culture, 41% of those interviewed said they felt a sense of social responsibility, while 37% were pursuing commercial and communications goals. The desire to be socially responsible underlies the obligations companies feel to be "good corporate citizens". Motivating staff comes way down in third place (19%). What matters to companies is primarily to inspire staff (34%), make them loyal to the company (27%) and exchange ideas (25%). Only a few (14%) use their cultural activities to try to reach out to potential staff. Very few of those interviewed saw their commitment to culture simply as "art for art's sake" (3%).

Of the businesses interviewed, 86% said their cultural activities were directed towards a common internal goal. They also said their cultural activities were a medium- to long-term affair (78%), and coordinated them with their operations in geographical terms. So cultural commitment seems to be motivated by business, with clearly defined aims, at first sight anyway.

Few businesses use their cultural activities to achieve competitive advantage

Just 43% of the companies interviewed believed their cultural activities generated any meaningful competitive advantage, 6% thought they generated none at all, and 51% thought they could not generate much competitive advantage at all. They thought the main benefits were their company's image (22%) and social goodwill (19%). They did not think they could put them ahead of the competition in terms of more easily quantifiable factors, such as media presence (17%), being seen as an attractive employer (16%), product and market profile (15%) or investor attitudes (11%).

Way out in front: image and social goodwill

When asked to what extent individual competitive advantages actually applied, businesses were quite clear: 92% thought it improved their image, and 79% thought it improved social goodwill. 16% thought it made them more attractive as employers, 14% it helped recruit staff. Four out of ten businesses thought cultural activities had little or no effect on their product or market profile.

Having analyzed the correlations, however, we found that it could also generate competitive advantage in terms of product and market profile – and not only benefit a company's image.

Communications rarely targeted or focused

To use cultural commitment as competitive advantage, 18% of those interviewed thought the most important thing was it should reflect their company's values, and 15% thought their communications should be focused. In fact, very few companies are focused when it comes to communicating their cultural activities: motivating staff comes in only third, but when communicating their cultural commitment, companies focus mainly on staff (27%), less on the media (24%), via the Internet (23%) or in their annual and social reports (17% and 9% respectively).

Nor did most respondents (55%) believe their cultural commitment affected what investors thought, although 17% and 9% of them still communicated them in their annual and social reports. 56% said their cultural commitment helped them create a media presence, although only 16% made any attempt to quantify it. 59% of the businesses surveyed used more than four communications channels simultaneously.

Most companies supported the fine arts (39%) and music (24%). Very rarely did their cultural activities seem to be tailored to the companies themselves. "To the cultural consumer, it is very difficult to make out who the corporate sponsors are behind any given cultural event," says Dr. Martin Wittig, member of the Executive Committee of Roland Berger Strategy Consultants. "But, used correctly, it can help companies set themselves apart from their competitors and achieve a competitive advantage. This also helps their product or market profile and investor attitudes."

Cultural commitment is rarely embedded in formal structures, and is usually the preserve of top management

Communications and PR departments play a major role in coordinating cultural involvement; 37% of the companies surveyed gave them responsibility for the budget. Only 5% of those surveyed thought optimum structures and processes were essential if cultural commitment was to be successful. The survey results also showed a certain deficit within the organizations themselves: there was a lack of clear structures and responsibilities, for example. In many cases, more than one department was involved in implementing cultural commitment (in 70% of cases, more than two departments). "Structure follows strategy – once a cultural strategy has been established, clear responsibilities, structures and processes must follow, " Wittig says.

Usually left to top management

56% of those interviewed said that, ultimately, it was the management that laid down the guidelines for cultural activities. In many cases management was also responsible for the budget (34%). Management itself thought it was important to use its commitment to strengthen networks (24%) and be socially responsible (25%). Personal motives, such as bringing their own cultural skills to bear (18%) or giving themselves room to maneuver (14%) seemed less important.

On further analysis, we found that corporate leaders who brought their own cultural skills to bear also felt that it gave them room to maneuver, that is was in keeping with their companies' traditions and that it was socially responsible. Of course, business leaders mostly supported cultural commitment if they thought there was some point to it, and felt they had some affinity with it, or could at least understand it. But the survey does not show definitely to what extent strong personal motives play a part.

Three kinds of motivation National and industry differences

As well as national and industry differences, the survey results show there are three kinds of motivation:

The prevailing kind is the good citizen. These companies aim to use their cultural commitment as a way of being socially responsible. What is important to them is positive image transfer and improved attractiveness as an employer. They also believe it improves investor attitudes.

Paternalists feel obliged to be involved in culture as part of their company's tradition; corporate leaders here have a high level of cultural skills. Motivating their own staff is paramount; commercial aims and communications are less important.

To the commercial kind (rare), cultural commitment is financially motivated. Targeted communication, media profile and reinforcing networks play a decisive part. Their aim is to set themselves apart from the competition, including in the eyes of potential staff.

Specific national differences

The survey shows Switzerland is dominated by the paternalist and good citizen types. Germans are mainly good citizens, with the commercial type coming next. Austrian businesses are mainly paternalist or hybrid forms.

Swiss companies are involved significantly as collectors, while Germans see a common goal and commercial orientation as important. They often use media reports to announce their commitment, which those interviewed say is rather uncommon in Switzerland. Austrian companies focus their cultural commitment mostly on their staff.

Specific industry differences

Banks and insurance companies see their product and market profiles as their main competitive advantage. They attach less importance to social goodwill and being attractive as employers than manufacturing industry. Financial institutions pay great attention to their corporate traditions, and stand out as art collectors (67% compared with 50% among service providers and 44% in manufacturing industry).

The Swiss Institute for Art Research (SIAR), founded 1951, conducts research into the history and technology of art, focusing primarily on art in Switzerland. Its headquarters are in Zurich, with a branch at Lausanne University. (www.unil.ch/isea)