What is Company Culture?
Company culture is a bit of an abstract concept; many think they understand it, but few can define it or explain how their culture was developed and maintained.
What is company culture and how important is it to get right?
Let’s start with a definition of company culture. The Cambridge Dictionary defines corporate culture as:
‘The beliefs and ideas that a company has and the way in which they affect how it does business and how its employees behave.’
It’s a good definition; it seems logical, straightforward, and concise. The problem is, it all too often seems that not many companies define their culture this way. Moreover, don’t all companies (especially when you ask their leaders) purport to have a ‘good corporate culture’?
The problem with misunderstanding your culture
It seems logical that business founders will be responsible for establishing a company culture and defining what that culture should be.
This culture is typically based on the company founders’ own personal values, vision, and their preferred working environment – and that culture will be imparted to the next member of staff, then the next, then the next… this seems like a logical strategy – but this is where many businesses start to struggle.
When a company culture is defined this way, the first few members of staff all end up being just like the company founder(s), meaning they may all share the same personal values, vision and work environment preferences. This all sounds great, and the recipe for a productive work environment, but when you start to dig a little deeper, is the best recruitment policy to employ ‘people that the founders would enjoy having a beer with’?
It’s a fairly common example: ‘we have a great company culture… we all go out for a beer after work on a Friday!’
But does this really mean the company has a great culture? Who says? Does it also mean that those people who can’t/don’t want to join the Friday beer club, won’t be model employees, who fully buy in to the business’ values and goals?
Although the beer example might be quite extreme, the point is that the ‘pint after work’ definition of good company culture does nothing for the long-term success of the business.
As a business increases its revenue, inevitably, more staff are required to meet demands; new staff with new skill sets to be brought in and new processes are to be implemented to streamline operations. This requires recruiting a very different set of individuals, with different personalities and unique personal aspirations.
The effect of a badly-defined company culture
A badly-defined company culture leaves the hiring manager asking all the wrong questions in interviews: is this person going to get on well with the rest of the team? Do I have anything in common with them? Are they like me? Will they be a good cultural fit (will they fancy a beer on Friday after work)?
Now this is where mistakes are made by some:
It’s not so much unconscious bias on the part of the hiring manager, as it is them genuinely believing this person doesn’t represent a cultural fit with the company. The issue is, the very cultural fit against which the candidate is being measured, has been defined in the wrong way!
This means that the hiring manager, all through wanting to perpetuate a poorly- defined company culture, is potentially missing out on the best person/people for the vacancies.
‘If we mention all of these great things we do, will this candidate work 10-hour days and weekends when we need them to?’
The ‘Friday beer’ example was only provided to illustrate a point; there are so many other examples of badly defined company culture that are far more common, and often detrimental. And it’s not always driven by the founders’ own personal values, vision and preferred work environment – it’s often erroneously defined by other ways.
For example, wanting to present a culture that the company thinks that staff and prospective hires will want… but the reality is far different from the concept.
Having break-out areas, cool, edgy office furniture, and free snacks – the whole ‘work hard/play hard culture’, often translating to staff having to work 60 hours a week to be rewarded with a free Dominos at the end of the month, doesn’t feel like a great culture.
Of course, we’re not suggesting that every company that has these policies and perceived benefits in place are disingenuous – far from it! But it does happen far too often that staff are misinformed about the role, and that many hiring managers are assessing cultural fit by asking internal questions such as ‘if we mention all of these great things we do, will this candidate work 10-hour days and weekends when we need them to?’
Many growing businesses are struggling to effectively define their culture, but this is a key step that needs to be completed before you can start to hire for cultural fit – so, how can this be done?
Establish an organisational values framework
Nowadays, it’s becoming more and more important to develop an organisational values model. Company values are the core set of beliefs that a company has and gives all staff the opportunity to get behind the same goals.
Some examples of company values could include:
- Openness, transparency, accountability and creativity
When developing company values, take plenty of time to get it right; it’s pivotal and will underpin everything from hiring to strategy, process to profits. Brainstorm with your team, involve as many stakeholders as possible. Include staff, shareholder, customers, and suppliers – what are the traits we have as a business that we want to keep, what do we want to eliminate and what do we want to do that we don’t currently? Having a core set of company values sets in place will help to shape the company mission and vision.
Implement a mission statement and document your vision
If you don’t have one already, implement a company mission statement, and a written vision that is communicated to all staff. It’s something that everybody can get behind if it’s done properly. Alongside values, it forms the foundation of company culture.
Although it’s a decision for company owners and leaders, it’s hugely important that collaboration with staff occurs to build this mission statement so everybody is bought in from the outset. The mission statement should encapsulate the business vision and why the business exists; it’s crucial. Additionally, Mission-driven workers are 54 percent more likely to stay at the company for 5 years.
A crucial step in building your new culture is to assess against your newly developed values. Carry out anonymous staff surveys to see how your current staff feel you’re performing against values. If, for example, once of your values is “we are open”, anonymously survey your staff to see if they believe the business is as open as it can be; ask open-ended questions to find out where the company is performing well, and not so well, and look to provide interventions based on areas of perceived weakness.
Assess against your new values and mission
360 feedback assessments are also a crucial way of seeing how aligned an individual (particularly a manager – as they’re often responsible for employee dissatisfaction) is aligned to the organisational values, and its culture.
Structure a 360 assessment around organisational key values and competencies and have their managers, direct reports, peers, other colleagues and even customers rate the individual against these competencies and values. This is a fantastic way of being able to highlight how aligned, or misaligned an individual is to the values and culture of a company, and gives an individual the opportunity to receive constructive and honest feedback from people they work with.
By incorporating these tools into your internal processes, it gives each member of staff the opportunity to feed back and contribute to the cultural shape of the business, whilst at the same time giving ownership of individuals’ personal and professional journey. For the business, it hugely helps to shape the internal culture, ensuring that all members of staff know exactly what the culture is, how it’s been developed and how it should be upheld.
Foster the culture
Once the above steps have been carried out, the management can start to foster the organisational culture. This will not happen overnight but done properly it can work wonders for businesses. It is the responsibility of, initially, the leadership team and subsequently the entire staff base to maintain a positive company culture, based on the values and mission. And it’s incredibly important for the culture to be inclusive for all.
If one of the values that is developed is ‘team spirit’ – don’t just put a pool table in the office: look to reward the entire team when things go well – organise team days that are inclusive to all. In addition to the pub Fridays, offer a suitable alternative to those staff that are unable to join – use some imagination and creativity!
For businesses that have ‘integrity’ as a core value, make sure you’re as ethical, fair, and honest with your staff as you are with your customers: update them on company financials, future plans and your expectations of them.
The list is endless, but you can probably see how having a robust core set of values in place, should impact all your stakeholders in the same way – it builds consistency and supports in building an incredible organisational culture.
Conclusion
Company culture is absolutely paramount and is pivotal to the success of a company. Making sure that your business has a culture to be proud of will help you get the most from your current staff base and ensure that you recruit those that align with your organisation – and who feel your organisation aligns with them!
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