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Cases | 28 April, 2020

How to Build and Manage Your Company Culture

Most companies are run by professionals whose expertise are weighted to the rational, financial, and legal side of the equation; therefore, culture is often misunderstood, subordinated, or unappropriated.

Today more than ever, companies are beginning to recognize the intrinsic value of company culture.

Company culture is the tacit social order of an enterprise. It defines what is encouraged, discouraged, accepted or rejected. When aligned with the personal values within a group, culture can energize your team to work toward a shared purpose.

In this article I’ll help you answer the following questions:

  • How to align company culture with business strategy?
  • Which of the 8 types of company culture is best suited for your company?
  • Should you invest into managing company culture like an asset?
  • How to Align Company Culture with Business Strategy?

Amongst business consultants there’s an active debate about culture and strategy.

Management consultant and writer, Peter Drucker once said, “Culture eats strategy for breakfast”.

To be clear he didn’t mean that strategy was inferior to culture, but rather that a powerful and empowering culture was a smoother path to organizational success.

When your business strategy is clear, your culture should arise to fill in the gaps and push your initiatives toward breakthrough success.

Business Strategy and company culture go hand in hand. Strategy is decided based on market opportunities, and culture is designed to leverage behaviors that contribute to the unique social environment of a business.

The popular notion amongst business consultants that culture should be in place first, and then strategy can be introduced is one that I respectfully disagree with.

The argument for this belief is that company culture is the psyche of the organization, so in announcing a change in both strategy and company culture a business would be left with a tsunami of a transition.

I can understand and respect this thought process, although I tend to lean towards a more transparent approach. Just be honest with your organization when your strategy needs to be adjusted, and educate them on how your culture will be affected.

Regardless, changing strategy and culture is always a process that requires massaging and patience.

It’s always best to get your business strategy right from the beginning, then fortify it with a strong organizational culture.

Which of the 8 Types of Company Culture is Best Suited for Your Company?

Considering we’ve helped you in building a unique and innovative business strategy, it’s now time to decide on the appropriate company culture.

Carefully read into each of the following organizational cultures, and consider which of them will best compliment your strategy.

Caring Culture – Warm, collaborative, and welcoming. The caring culture is the second most popular amongst employers, because it values teamwork and good working relationships.

Purpose Culture – Tolerant, compassionate, uniting focus on contributing to the greater good. This culture is excellent for people looking for an organization that values making an impact in the world over individual achievement.

Learning Culture – Exploration and creativity, inventive and open minded. The learning culture is common for technology companies that emphasize innovation and curiosity.

Enjoyment Culture – Light hearted, playful, and creative. Hands down the most modern culture. The enjoyment culture emphasizes spontaneity and a sense of humour. Employees are typically lighthearted, playful, and in search of work that makes them happy.

Results Culture – Goals, achievement, and winning. There’s no question why a results culture is the most popular choice by employers. It’s merits based system runs fluently with our capitalistic society. It welcomes employees who perform their best when executing against set goals and driving towards a winning result.

Authority Culture – Bold, competitive, decisive, strong and confident leaders. An excellent example is Chinese technology giant, Huawei. Authority cultures welcome people who are motivated by gaining personal advantage more than organizational success.

Safety Culture – Predictable, realistic, risk conscious, planning and caution. The safety culture is common, but not exclusive to construction, mining, and industrial companies. In these industries company’s vy for the title as the safest company in order to win contracts.

Order Culture – Structured and methodical, cooperation, customs. Often appropriate for government agencies and some financial institutions the order culture is suitable for employees most comfortable in unambiguous, structured environments.

Now that you’ve read up on the different types of company cultures, ask yourself the following questions:

  • If you had to choose two of the above cultures for your company which would they be?
  • How do your choices support your business strategy?

Utilize these two company cultures as a foundation for your own. Remember, no business strategy should be the same as any other, and since culture is a reflection of strategy, your culture should be your own unique social environment.

Should you Invest into Managing Company Culture Like an Asset?

What is the impact of organizational culture on customer choices, and in turn, on the success of business?

Much like how a canyon has layers of sediments, our behaviours are shaped by our experiences throughout our life. During our childhood we learn behaviour from our parents, and as we mature we learn from our colleagues and managers at work.

Our behaviours are a function of what we’re experiencing from others behaving; therefore, there’s a connection between company culture, the choices of customers, and business success.

What impact has company culture had on the market capitalization of public companies?

HBS Professor, James Heskett, completed an extensive research project detailing the organizational cultures of 200 companies and how each company’s culture affected its long-term economic performance.

His book, Corporate Culture and Performance, argues that strong company culture facilitates adaptation to a changing world and is associated with strong financial results.

The novel highlights the difference in results over an eleven year period between twelve companies that did have a focus on company culture and twenty companies that did not. The results are staggering: Over an eleven year period companies that had performance-enhancing cultures saw a whopping 901% average stock price growth, whereas companies without performance-enhancing cultures saw a stock price growth of 74%.

Companies have a variety of assets, and someone to manage each of them. It’s time company’s began to look at company culture as an important asset and assigned a manager to oversee it.

Let’s call them your Culture Asset Manager.

They will first have to assess the business strategy and work closely with management to understand what type of behavior will best represent the strategy.

Now, where a niche or luxury service provider may have a more empathetic front end culture, a low cost provider may be more focused on a lesser service that keeps costs at bay for their customers.

Next, the Culture Asset Manager will need to translate what their culture means to employees in each arm of the business. Evidently someone on the front end will have different roles and responsibilities in purveying culture than someone in a more internal position.

Lastly, it’s integral that your Culture Asset Manager works closely with Human Resources to ensure that anyone being promoted or hired displays the appropriate behaviours for their respective positions.

It only takes one bad apple to ruin a bushel.

Remember, our behaviours are a function of what we’re experiencing from other people behaving. If you’re going to focus on company culture you need to ensure you have the appropriate people within your organization to convey your strategy.

I’ll now leave you with a final question:

Are you ready to manage culture like an asset?

Kevin Foreman
President, Black Sheep Business Consulting