Understanding and building Company Culture
Culture is the way things are done at your organisation. It represents the values, beliefs and related behaviours of the people in it. They are different across companies, industries and countries.
What is company culture?
Culture is the way things are done at your organisation. It is a shared set of beliefs and values which shape employee perceptions, behaviour and understanding. This impacts the way staff interact with each other, customers and suppliers.
Examples of such beliefs could be what emotions are appropriate to show at the office. How the organisation interacts with its environment (customers and other stakeholders) and how the organisation measures effectiveness or success. I.e. Is it measured per team? Individually? By division?
The sheer variety of possible beliefs is what makes each organisation’s culture unique. This will also be driven by the local cultures and the industry. Consider the culture of a bank versus a web startup. The reality is that there is no one-size-fits-all culture, it is meant to differ. Some cultures are just better at taking on certain missions than others.
Benefits of defining and growing culture
You already have a culture. That’s a fact. You may even have several cultures in different pockets of your organisation. Your London office may feel very different from your Cape Town office, especially if the alignment is low.
You only stand to benefit from taking charge of your culture’s direction. The earlier you do, the easier it will be.
The benefits are pretty clear:
- Better cultural alignment leads to a greater sense of belonging amongst staff which lifts their engagement.
- A culture that is well-aligned with your strategy will lead to a better and more predictable execution of that strategy.
- A defined culture provides clear guidelines for hiring which further helps the growth of your culture.
- Higher Engagement, Strategic execution and Cultural Alignment all lead to better business results like customer satisfaction and profitability.
What if I’m not the CEO?
Every leader has a duty to drive strategy and culture. Often, it’s already been defined and you have to play your part. If not, take initiative and define it for your team or division. Why? For the same reasons above! It will drive better results and increase engagement on your team. These are also highly transferable skills that you will use in all future leadership positions.
A quick overview
While cultures are different, the process of defining and building them has become quite well understood and follows the following steps. We’ll go over this briefly because it takes a whole book to go through the detail (see Further Reading below).
It all starts with why your organisation exists in the first place. If it’s a for-profit organisation then yes, you need to make a profit. How though? Who are you serving and what are you pursuing? You need to establish your vision, purpose and mission.
With your purpose clarified, it becomes much easier to understand what sort of culture is needed to support it. A bank trying to build trust with customers will require a different approach to a web startup that needs high creativity to try radical new ideas often. Cultures are driven by values so this means defining your values and their related behaviours.
Once you have your purpose, your organisation needs a strategy. At a high level, how is it going to fulfil its purpose?
Now that your strategy and culture are defined, you need to align everyone in the organisation to them. This is the bulk of the work and requires buy-in from your whole leadership team.
Define your Purpose, Vision and Mission
The leadership needs to clarify an organisation’s reason for existence. This is foundational to strategy and culture. It’s not complicated, you can’t define a strategy or culture if you don’t know where they need to lead to. To start, define your purpose, mission and vision:
- Purpose guides you. Your purpose statement articulates why you do what you do, why your organization exists, and why you serve a higher purpose (your cause).
- Mission drives you. If the purpose is your why, the mission is your how. It describes how you’re going to achieve your purpose.
- Vision is where you aspire to be. It describes what you will achieve in the future and what the world looks like if you fulfil your mission and purpose.
Both mission and vision statements are often combined into one comprehensive "mission statement". This makes it easier to communicate it to all stakeholders like employees, partners, board members, consumers, and shareholders.
As time passes and organisations make progress to their goals, the mission and vision need to be revised to reflect the new culture and goals. This is often done as part of the annual strategy cycle.
Vision Statement Examples
- Microsoft (at its founding): A computer on every desk and in every home.
- LinkedIn: Create economic opportunity for every member of the global workforce.
- Facebook: Connect with friends and the world around you on Facebook.
Mission Statement Examples
- Tesla: To accelerate the world's transition to sustainable energy.
- Workday: To put people at the centre of enterprise software.
- Prezi: To reinvent how people share knowledge, tell stories, and inspire their audiences to act.
The reason so many mission statements are ignored is that, without values defined as behaviours, these mission statements seem too abstract. Defined behaviours make culture understandable to all stakeholders but especially employees.
Let’s look at an example of something common like Excellence. It is often defined as something like this: “I go beyond what is expected of me by customers and colleagues”. What does that entail though? It’s still too vague. In The Culture Engine, Chris Edmonds notes that you need to have valued behaviours which are essentially just behaviours that promote your values.
Here are his examples for Excellence:
- I embrace constructive feedback by taking personal ownership and changing my behaviour to improve my contributions.
- I teach, train and support the development of others by sharing my knowledge.
- I adapt to changing priorities by keeping myself informed about the business.
- I present my company with pride by always following the dress code.
Can you see how incredibly clear this makes it? Imagine what your organisation would look like if everyone acted in this way. Now define these valued behaviours for each of your values.
Strategy is where your organisation’s vision of the future meets reality. It sets the foundation for your goals which outline your specific performance expectations. It can simply be described as long-term business planning. Typically a business strategy will cover a period of about 3-5 years (sometimes even longer) There are loads of Strategy Frameworks out there which are beyond the scope of this article.
This sort of strategic planning is usually done once per year with the seniors in the organisation using inputs from all across the organisation. It is often done in the form of a strategic retreat where the vision, mission, purpose, strategy and values are all revisited.
Once you have a strategy, it is simply a matter of assigning the responsibility of who does what throughout the organisation. We love Objectives and Key Results (OKR) as a framework for doing this.
“Culture eats Strategy for breakfast” - Peter Drucker
This is an oft used phrase and means that a strategy that is at odds with a company culture will not be executed well or at all because of human behaviour embedded in your culture. Strategy and culture are tightly coupled because the way people behave in an organisation heavily impacts how it pursues its mission.
Engage your Leaders
Employees will model their behaviour on that of their leaders and thus, leadership buy-in to the culture is essential. It is the responsibility of all leaders to be role models for the new culture and to be proponents of the valued behaviours mentioned above. They also have the important role of aligning employee behaviour with the organisation’s culture through constant feedback.
Jack Welch of General Electric is famous for being the first business leader to demand both performance AND values from everyone at General Electric. In other words, it impacted remuneration and was part of performance conversations.
All leaders are change agents and have to be trained in both culture and strategy.
This is not a once-off process but rather a cycle that typically runs yearly for organisations. If you take the time to define your culture and strategy and engage your leaders as change agents, you’ll be lining your organisation, team or department up for excellent business results.