what culture is and how to build it right
I can’t help but feel that there is a lot of confusion around the concept of company culture.
Don’t get me wrong—I’m glad that so many leaders and HR articles focus on the importance of culture. There’s no question that having an authentic company culture aligned to driving business outcomes makes a real difference in an organization’s performance. And a quick glance at the headlines over the last year only emphasizes the point that weak company cultures (Wells Fargo, United) can have serious consequences and can impact performance.
Still, too often when I ask companies to describe their cultures, they tell me all about their office perks.
Culture is not the free lunches, snacks, office happy hours, or ping pong tables in the breakroom. It’s much deeper than that.
Culture is the soul of an organization.
It’s the aggregate of every decision that is made at an organization.
Culture is how employees work, interact, and treat each other every day. It’s what every employee values and prioritizes at work. Every action the leaders and employees take in an organization defines and shapes its culture.
Culture happens, whether an organization cultivates it or not. And if an organization is not focused on creating the right culture to drive strategic goals and attract and retain high-quality talent, it will be a barrier to an organization’s growth. So, how does an organization create an effective culture?
be intentional
An organization must first have a clear understanding of the definition of culture and a relentless focus on intentionally shaping it. If an organization is just starting, the leaders have the opportunity to craft the culture from the start. For a fully formed organization, it’s never too late to start being intentional about culture. But regardless of the starting point, culture definition and refinement require a lot of thought and concerted effort to get right.
Organizations need to think through how they want people to make decisions, work, act, and behave. While a culture needs to inspire employees to do their best work, it can’t be so aspirational that it’s unattainable. I see too many organizations define a lofty culture of transparency but then have a leadership team that is not comfortable being transparent. The culture should be something that the organization authentically values and can realistically achieve. For example, if an organization defines its culture as “employees are our #1 priority,” then it needs to be prepared to prioritize people even at the risk of other goals, otherwise that’s not a true articulation of its culture.
To get started, an organization should ask some basic questions to think through what it would like its culture to be: What do we want to achieve? How do leaders make decisions? What are the top priorities? What are the things that are non-negotiable when making decisions? Are there things we should change about how we do things today? How will we measure our performance? How will we reward our employees? Can we really change the way we make decisions or will we fall back into our old ways when the going gets tough?
Yes, this is a lot of hard work, and it requires a ton of soul-searching and truth-seeking. But it’s absolutely critical that an organization be clear as to what’s really important so that it can define an authentic culture that it actually has the ability to embrace.
But it doesn’t end there; an organization needs to constantly evaluate and refine its culture to make sure it’s aligned to organizational goals. A company’s culture will shift during its growth trajectory and will be shaped by new leadership, employees, and trends in the business environment and workplace. The organization must stay focused on its culture to ensure it continues to inspire employees to do their best work and drive the right business outcomes.
perception is reality
But defining a culture is only the first step. The biggest challenge with creating an effective culture is driving behavioral consistency across all employees and leaders. The organization’s culture must feel real to the employees and stakeholders, because at the end of the day, what the external stakeholders and internal employees perceive and how they describe the culture is the reality of what it is, no matter what the leadership says.
That’s why it’s critical for leadership and HR to form a strong partnership around defining and implementing the culture. The leadership team should own the culture definition, while HR should drive the culture process and implementation.
For a company culture to be effective, to be “real,” the leadership team has to be totally bought in and committed to living the culture every minute of every day. Leaders will need to make sure that every decision made is grounded in their defined culture and hold their teams accountable to the same behavior. If leaders stray from the described culture, people won’t feel the culture that has been laid out. The behavioral consistency starts with leadership actions and extends to the rest of the employees.
HR must guide the leadership team to define a realistic and simple-to-understand culture that the organization can actually embrace. The HR team has to roll out changes to the culture and hold leadership and employees accountable to living it every day. All employee services and processes designed by HR should be grounded in the company’s culture.
And as business and workplace trends shift, HR must anticipate how this will impact the culture, building business cases to influence leadership to make the right changes. The goal is to always keep the culture relevant and fresh to ensure it drives business outcomes and attracts and retains high-quality talent.
stay aligned
While a strong partnership between HR and leadership is a key ingredient to driving alignment between the desired and perceived culture in an organization, it doesn’t solve everything. Even in high-performing organizations, there are stubborn spots of people who aren’t living or feeling the culture.
This is why it’s so critical to figure out how to measure the effectiveness of culture. Many organizations rely on annual engagement surveys to measure this. While there’s nothing wrong with this method, it’s too infrequent to be the sole measurement of an organization’s culture.
Another approach is to use analytics to look for patterns between culture alignment and business performance. For example, an organization can identify underperforming segments by reviewing business results. From there, an organization can connect to a variety of sources to look for patterns in order to identify behaviors that don’t align to the culture in these business units. These could include employee performance, engagement, customer satisfaction, turnover, open roles, and leadership satisfaction, to name a few.
For example, we once put together an analysis that found a correlation between low customer satisfaction levels and employee engagement levels in an underperforming business unit. As we dug into this, we found that there was high turnover that was related to a few managers who required additional training on how to consistently embrace and live the company culture. Over a period of time, the turnover reduced and performance started to tick up.
There are a number of ways to attack this, but constant measurement of culture is key to making sure that the organization’s desired culture and perceived culture are aligned.
don’t lose focus
It’s so critical to have the right culture to achieve business goals. Organizations have to be proactive in defining culture, assessing feedback, and measuring the effectiveness and alignment of their desired and perceived culture. Remember, company culture happens whether an organization is intentional about it or not. Those organizations that create authentic cultures that are aligned to driving business outcomes also attract the best talent and delight their customers.
Do you want to create a place where people love to work and are also striving towards business goals?
We created a step-by-step culture guide that gives you a proven plan to develop the culture that you want at your company.