Chapter 1

Understanding Company Culture

IN THIS CHAPTER

Determining exactly what company culture is

Creating the conditions for a culture

Clarifying what great cultures have in common

Understanding what company culture is not

Knowing when your culture might be at risk

Can you really change culture? Does it start from the top? Does it bubble up from the bottom? And, why does it even matter, anyway?

Company culture is one of the hottest topics in the business world today. Leaders, managers, journalists, and employees alike are all talking about it. And here’s why: Good company culture sets apart organizations, and places them miles ahead in the fight for talent, the shaping of the external brand, and the bottom line results.

So, how do you get started in turning your company culture into one that is best in class? It all starts here. In this chapter, I give you the basics: defining culture and how it can affect your staff, your customers, and your profit margin. Then, I explore the different levers that contribute to culture and show how it can be used to impact your brand. Throughout the book, culture is discussed in extreme depth, but it all has to start with a basic understanding. Time to begin!

Defining Company Culture

Company culture can be defined as the repeated pattern of behavior of your team based on assumptions learned through experiences and passed down to other people. It’s about so much more than perks, benefits, and the feeling around the office. Sure, those things can shape culture. They send signals to people about the relationships of the people in the organization and the tone of the working environment. But there’s so much more that culture encompasses.

At the core, company culture is the way an organization expresses itself through values, behaviors, actions, and group norms. The culture of the organization is always evolving and constantly being tested to show what it’s really all about. The cultural norms of the organization are the ones that determine what’s encouraged, what’s rejected, what’s in, what’s out, and set the environment in which work will be created. When aligned properly, the culture of the organization can create engagement, drive results, define expectations, and help to unleash discretionary effort and energy.

Company culture can be understood by looking at:

• Values and beliefs: Looking beyond the fancy values statement in the employee handbook to see what’s really valued in an organization speaks volumes about the culture. The real values of the organization are the ones that are adhered to whether spoken or unspoken. They show signs about what matters most, what’s celebrated, and what winning looks like to the organization. All of this is built upon the beliefs of the leaders and the people in the organization. The underlying beliefs about work, each other, customers, and the company drive the values that shape the culture. Check out Chapters 4 and 7 for more on beliefs and values.
• Behaviors and communication: These are the real-world manifestation of the values and beliefs of the organization. The way in which the team behaves, acts, and communicates creates the conditions in which the company operates. Companies can be fun and jovial, or conservative and measured in their actions and communication. Both work depending on the culture you are trying to create — and both create very different cultures. Regardless of what’s documented and shared, the reality of the culture shines through in the way people perform and communicate. Head to Chapters 7 and 12 for more on these ideas.
• Systems and structures: The way the organization is — well, organized — speaks volumes about the culture as well. The systems for getting things done, communicating, sharing, and collaborating speak to what matters within the company. The hiring process, the onboarding process, the training programs, and the way that goals are set all shape culture. Even the way meetings are run, communication occurs, and decisions are made start to reveal the true nature of the organization. Check out Chapters 10, 11, 15, and 16 to gain more insight on establishing systems and structures in a variety of ways.

Approaching Culture as Your Organization’s Operating System

In a computer system (or cellphone), the operating system is the layer that lives between the hardware and the software. It’s the tissue between the apps on your cellphone and the actual physical cellphone itself. Without the operating system, the apps can’t run. If the operating system is ineffective, out-of-date, or otherwise impaired, then the hardware and the apps get buggy and don’t function properly.

The same thing is true of your culture. It’s the operating system that runs your business — or rather, it’s the operating system that mostly significantly impacts how the parts of your business run.

Realizing that culture isn’t part of the game — it is the game

I have consulted on organizational culture with clients around the world, and the most common misconception at the outset of our engagement is that culture is a linear thing. My clients believe that culture started one day, and that we can together pick it up and make changes. It seems like culture is a component in the game of business right alongside operations, legal, product, marketing, and real estate. It’s often relegated to being the job of the human resources department and measured with an annual survey (see Chapter 3 to learn more about how to better measure culture). But culture isn’t just a piece of the puzzle to be picked up and added to the overall picture; culture is the puzzle. Your product, your communication, your leadership, your market share, and your brand are all outcomes of the culture you create. When you think about some of the most-loved brands in the world with products and experiences that people rave about, you can start to see that the culture within the organization is what helped produce those customer-pleasing results. These are the kinds of cultures that create conditions where employees play to each other’s strengths to create even better offerings, the kinds of cultures that rally teams behind being first to market with a new technology, and the kinds of cultures known for positively approaching conflict and crisis to safely navigate change.

Culture is the game you are playing. The things you choose to put into the culture from mission to values, from the way you hire to the way you communicate, and from the way you set goals to the way you review performance are all the tools that help to define culture and create the game your employees play each and every day.

Molding, not creating, company culture

Organizational leaders often say that they’re “ready to start creating culture.” Wrong again. Culture is created as soon as two people start interacting. As soon as the social contracts are formed around how we treat each other, the messages being sent and received start shaping the culture. The great news is you don’t have to worry about creating culture. It already exists.

Getting intentional about the type of culture you’d like involves a lot more than just writing down your mission and values. In fact, you can look across industries and find examples of companies that have expertly crafted mission and values statements but still suffer from a toxic, sluggish culture. The goal is not to start creating culture but to mold it. Culture is a string of relationships all striving to get to a shared goal. You can foster, mold, nudge, and cultivate culture by focusing on those relationships. The bad news is that you can’t just go away for a weekend and create a new culture overnight, and your team may have some bad habits that have developed over time which are creating less-than-desirable conditions in your organization. The good news is that you can start exactly where you are today to improve your company culture. You can get clear about what’s working and do more of that while also sorting out what’s not working and begin to develop new habits and systems around those areas.

The sooner you begin to acknowledge your current state, clarifying your desired state, and map out a path to take you from here to there — the sooner you can start celebrating the culture wins on your team.

Controlling the conditions

You know how certain places make you feel a certain way? Maybe it’s a fancy dinner party with new friends, or perhaps a backyard barbecue with family. Or maybe it’s a visit to a new city or a return to a favorite one. Each of those experiences is full of messages and communication. You have a relationship with the whole experience — the people in it, the way you feel about the physical space, the energy around you. All of that creates culture.

Culture is the conditions created in your business. The most you can do is control certain inputs for your team — you can choose tools and office perks, hire certain people, celebrate certain values, and codify desired behaviors. All of this ultimately creates the conditions that foster a specific type of culture.

If you think about one of these examples, it becomes clearer. The dinner party with new friends includes...