Why Culture is the Most Important Factor in Your Company's Success or Failure
When you walk into the lobby of any company, you immediately get a vibe. Maybe there's a lot of energy, but it feels frantic and panicked. Or maybe you feel a "rush" that's exciting and productive. Or it's just the opposite - things are quiet and moving slowly. This might be a sign of boredom and disengagement OR a sense of calm and purpose.
Either way, you've just experienced culture. And while most people focus on perks and policies - dress code, foosball tables, working from home - when they think about culture, these are simply cultural clues. Instead, culture is the collective values, norms and beliefs of the organization - also known as "how things are done around here." This is the basis for everything that happens at a company, such as:
- Do employees feel valued?
- Can they get their work done?
- Do people tell the truth to each other?
- Do they give honest feedback?
- Do they speak the truth to leaders?
- Do leaders always "win" the conversation?
- Is the organization luxurious and elaborate - or frugal and modest?
- Is it fast-paced and risk-taking or methodical and calculated?
In short: what's it like to work here? But while you notice culture almost instantly as a new employee (or even just in the lobby), the longer you work for a company, the more ingrained and less evident it becomes. But whether you're aware of it or not, a is IS being socialized at your company.
It's telling people how to behave, how to get their work done and what matters to the organization. And here's the clincher: culture is the single most important factor in organizational success or failure.
Because culture enables strategy. So if yours doesn't align with and support strategy, your strategy will fail. So what's the culture at your company? Is it helping you achieve your business objectives? And if not, how can you build one that enables your strategy?
What Culture Looks Like
To pinpoint your organization's culture, you have to take a step back and look at the day-to-day behaviors and expectations. One way to do this is by looking at how you onboard new employees. What's that experience like? What messages do they get about what's really important? Are they taken through a detailed orientation as to how things are done?
Or expected to navigate the new turf on their own? These early experiences say a lot about your company, and you want them to appropriately reflect your culture. It's also important to understand culture at the attribute level, not the overall level. For example, if making decisions in a top-down manner will allow you to achieve strategy, yours needs to be more rigid, hierarchical, micromanaged, reactive and secretive.
But if participative decision-making will get you where you want to go, you need to build one that's more relaxed, flat, autonomous, proactive and honest.Keep in mind there's no right or wrong here - just the extent to which specific cultural attributes allow you to achieve your strategy. Another way to look at it is that culture is to organizations as personalities are to individuals.
A culture's characteristics are not overt or concrete, but they're powerful because they shape employee behavior - telling people what to pay attention to, what things mean, how to react emotionally and how to behave. And it's ubiquitous throughout the organization, even though it may present itself differently from one department to the next. Finally, whether a culture is "good" or "bad" is relative, depending on the behavior and results it drives.
How to Get Culture and Strategy on the Same Page
So what does it mean to align culture with strategy? It means those collective values, norms and beliefs shape employee behavior and work with - not against - what you're trying to achieve. For example, at Limeade, we're all about improvement, particularly around health and well-being.
So our culture supports that by allowing people flexibility in how, when and where they work; taking walking meetings instead of hovering in conference rooms; and eating healthy throughout the workday. Aligning culture with strategy also means you thread the culture through everything you do -- every policy, procedure, system, benefit, perk, even your office set-up: all of it should be intentional and consistent with your culture.
The benefits also go beyond growth and profit. Understanding your culture and building it intentionally so that aligns with strategy allows you to accomplish a variety of key objectives:
- Socialize new employees
- Describe your company to potential partners, clients or employees
- Align employee and leadership behaviors - as well as internal work streams - with the culture
- Engage employees
- Improve satisfaction with customers
- Develop a leadership framework for strategy development and communication
- Differentiate the company for potential partnerships
- Ensure the company is well-positioned to meet its future business objectives
In the next column, we'll dive into specifics on how to build an intentional culture - everything from setting behavioral expectations to recognizing and rewarding people who "live the culture." I'll outline exactly what you need to do in nine steps you can implement now and then revisit as your strategy evolves. Watch for details in the next issue.
About the Author
Laura Hamill, Ph.D., has over 20 years of experience helping companies be more strategic with their most important asset--their people. She is the Chief People Officer at Limeade, a corporate wellness company where she leads the People Team and nurtures the Limeade culture of improvement while developing groundbreaking people practices and architecting employee engagement strategies for Limeade and its 100+ enterprise customers.
Prior to Limeade, Laura owned Paris Phoenix Group, an organizational research and assessment consulting firm, focused on improving employee engagement and culture alignment. She also worked at Microsoft for nearly a decade as the Director of People Research, leading a team of organizational researchers responsible for company-wide employee research. Prior to Microsoft, Laura conducted employee research at Allstate Research and Planning Center and Bell Atlantic (now Verizon).
She earned her Ph.D. in Industrial/Organizational Psychology from Old Dominion University and a B.S. in Psychology from the University of North Carolina, Chapel Hill. Laura lives in Woodinville, Washington, with her husband, two children, and a very large dog.