What Makes A Company Culture Great?

4 min read

The old quote, attributed to management guru Peter Drucker, is that company culture ‘eats strategy for breakfast.’

peter drucker

The idea is that the energy, enthusiasm, values and other intangibles that constitute a culture lead to the innovation and adjustment and execution that actually win in business over the long term.

Great culture breeds success.

In 2011, Harvard Business Review even published an article called ‘Culture Trumps Strategy, Every Time.’

culture trumps strategy harvard business review

 

In the article, Nilofer Merchant argues that culture allows people to act on assumption rather than negotiation.

How we get things done drives performance. These issues of trust, conflict resolution, and co-ownership are foundational for how a team gets work done. Culture is the set of habits that allows a group of people to cooperate by assumption rather than by negotiation. Based on that definition, culture is not what we say, but what we do without asking. A healthy culture allows us to produce something with each other, not in spite of each other. That is how a group of people generates something much bigger than the sum of the individuals involved. If we only get 2+5+10 = 17, we haven’t gotten any benefit of leverage. What we are looking for is 2*5*10 = 100, delivering an explosive return on effort.

Another Harvard Business Review article published in 2012 had the title ‘Culture Takes Over When the CEO Leaves The Room.’

harvard business review culture

The authors of this article talk about culture guiding decisions by employees without having specific instructions for a unique situation:

Culture guides discretionary behavior and it picks up where the employee handbook leaves off. Culture tells us how to respond to an unprecedented service request. It tells us whether to risk telling our bosses about our new ideas, and whether to surface or hide problems. Employees make hundreds of decisions on their own every day, and culture is our guide. Culture tells us what to do when the CEO isn’t in the room, which is of course most of the time.

In 1994, the business journalist Donald Katz wrote a business best-seller about Nike’s incredible success.

The question Katz was trying to answer was how could you explain Nike so clearly differentiating itself and pulling away from its competitors in an industry with fierce competition and a product that, despite all the hoopla and marketing, was technologically very similar to those of other companies?

The answer was Nike’s spirit.  Its culture.

just do it the nike spirit

A great culture at your business is a very valuable asset.

It allows for everything from better productivity to easier talent attraction to lower turnover to better ideas and innovation.

A lot of  business owners think of culture as a sort of fuzzy, soft idea that will take care of itself or can’t really be created intentionally.

But there are concrete things you can to define and improve your business’ culture.

Mission Statement

Not all mission statements are created equal.  But great ones are worth their weight in gold.

A great mission statement that briefly and clearly identifies your key goals and values is critical for defining your culture.

Is your business’s goal to provide the most attentive and trustworthy senior healthcare services in Seattle?  If that mission is written down, explicit and publicized it does a lot to define your culture right off the bat.

Lazy employees who aren’t really passionate are going to be dissuaded right off the bat because, well, delivering that level of service takes a lot of work and care.

the nordstrom way

The high-end retailer Nordstrom has made the Fortune list of 100 Best Places to Work for 20 straight years.

But the famous “Nordstrom Way,’ with its obsessive focus on customer satisfaction, also serves to quickly filter out employees who aren’t enthusiastic.  It’s a magnet for the motivated, a repellent for  the wrong type of people.

When your mission is clear, culture tends to follow.

If culture is partly defined as making the right decisions when the boss isn’t there, a mission statement gives the guidance.  Your employees know that they’re expected to go the extra mile to make sure their service to your senior healthcare patients is ‘the most attentive.’

Place

The physical layout of your office space can contribute to your business’ culture.

chiat day open office

When the ad agency Chiat Day adopted one of the first open office plans in New York City in the 1990s, they noticed that there were more ‘serendipitous’ conversations and ideas percolating up.  (They also faced challenges of workers not having enough privacy to concentrate fully.)

Does your business culture emphasize egalitarianism?  Or hierarchy?  Both can be appropriate, depending on the business.

If your leadership is set physically far away from direct subordinates, this is going to send a message and dictate some practices, regardless of your intention.

Hiring

The wrong employee is never going to adopt your culture.  It just ain’t going to happen.

And this doesn’t mean that that person is a bad person.  They just might not be the right fit for your business.

Having a hiring system that is focused on perpetuating your culture is a key piece of the culture puzzle.

Zappos, the online shoe retailer, is famously focused on hiring the right people for its culture.  The company’s hiring process starts with ‘cultural fit’ interview.  After hiring, things get a little more unique.

At the end of the first week, every employee is offered $2,000 to quit.

tony hsieh

Tony Hsieh, the founder of Zappos, says that “it allows them to retain people who are genuinely passionate about the job they will be doing.”

Engagement Software

Culture is important enough for business success that there is an emerging software sector of cultural engagement tools.

These software products can help you manage, track and guide employee engagement and culture.  If you have problems emerging in your culture, these tools can help you pinpoint them and address them.

Tools like TinyPulse and CultureIQ are good examples.

2018-05-05T15:20:47+00:00