We all know the adage "culture eats strategy for breakfast". It is no secret that Company Culture is important. In my 10 years tenure at Google, I did experience how much impact a strong culture can have on people within but also outside. However, a lot of the companies I met since seem to struggle in defining what a Company Culture really is, and how to develop it effectively.
WHAT EXACTLY IS A COMPANY CULTURE and WHY IS IT IMPORTANT?
A Company Culture is not just a mission statement and a list of values. It encompasses values and behaviors that contribute to the unique social and psychological environment of an organization. A Company Culture is what will bring consistency throughout the whole development of your Company's People Strategy. It needs to be at the center of your company’s identity and defines its norms at all levels: the profiles of employees, the management style, the dress code, the expected behaviours, the clients, the workplace, the benefits, etc.
The objective of a Company Culture is NOT to look nice and please everyone. It is not just about a colorful workplace, a foosball table and free lunches. A good Company Culture states a DIFFERENCE and should in some ways discourage those not fitting in while attracting those in sync.
A Company Culture is something that is preexistent to any form of process or policy in the company. It is not something that employees bring with them, it is already there before they join. But developing it in a conscious, driven and explicit way will ensure it can be articulated and reinforced with efficiency, consistency and longevity.
WHY IS IT IMPORTANT?
Because it brings clarity and focus. It is the foundational work from which you will build or re-build your company, and align all future strategies, tactics and policies.
Because it can make or break your company. Companies with an adaptive culture aligned with their business goals routinely outperform their competitors. Wharton Professor Alex Edmans found that companies on Fortune magazine’s annual list of "100 Best Companies to Work for in America" returned 14% per year on their stock, compared to 6% of the overall market. .
Because having great company culture is no longer just an option. Today’s workers look for the workplace as much as salary and benefits. Actually, fantastic company culture is almost expected along with other traditional benefits. Based on The 2014 TINYpulse Employee Engagement and Organizational Culture Report, money – often simply assumed to be the major motivator – was seventh on the list, well back in the pack.
Because Employees want to be a part of something bigger and meaningful. When the employees of a business share a common goal strategically, operationally and financially, they tend to be more motivated and are more likely to be satisfied in their careers, and more likely to work to their full potential to achieve those goals. A Columbia University study shows that the likelihood of job turnover at an organization with rich company culture is a mere 13.9 percent, whereas the probability of job turnover in poor company cultures is 48.4 percent. Companies like Google or LinkedIn actually have a 1-digit turnover rate!
Because it leads to better hiring. Without a clear insight into what your culture and values are, you are increasing your chances to mis-hiring and endure high turnover costs.
DEFINING THE COMPANY CULTURE
Defining a Company Culture is a long process and requires the founders and the employees to sit together, discuss, argue and finally agree on what is IN and what is OUT. It requires a thorough thought process as all policies and processes will have to be aligned and consistent.
The suggested approach is to do a series to workshops between the core employees and leaders of the company until reaching consensus. The whole process can take months as it is critical to be thorough and meticulous. There is often a number of iterations before we land on the final Company Culture definition. Here are some suggestions:
Formulate the Company Purpose: The purpose is usually more personal to the founder(s) and can come up as the story of why the company was founded, which every employee will know about. For example, Google: To organize the world’s information and make it universally accessible and useful.
Formulate the Company Mission: The Mission is what draws people to a company and has as much meaning outside the company as inside the company.
Formulate the Company Vision: The vision is the “desired future state” describing the company as in 5, 10 or more years. For example, Nike:To be the number one athletic company in the world.
Identify the Company Values: These are the guiding principles or rules of conduct that the company will be known for and how it will behave. For example, Twitter: Feel Free.
These need to be in writing and shared broadly across the organisation and beyond. There is no specific format, it can be a doc or slides, succinct or very detailed (Google’s 10 lines vs. Netflix’s 124 slides!). But it needs to make people react and say “yes, I’m IN” or “no way, this is not for me”.
IMPLEMENTING A COMPANY CULTURE
The Company culture is everywhere and needs to be taken into consideration in every business decision. And of course, it should be reflected in the development of all policies, processes and programmes:
WORKPLACE: Leave policy, Compensation policies, Benefits, Office space, etc.
RECRUITMENT: Employer Branding, Interviewing process, Candidate experience, Onboarding process
EMPLOYEE DEVELOPMENT: Learning culture, Coaching and learning programmes
All these should be shaped by the Company Culture. In case of inconsistency between these policies/processes and the company culture, employees will start to see the disconnect, lose faith, grow frustration, and overall employee engagement and satisfaction will decrease.
In a company with powerful culture, everyone in the company should be able to relate the mission, vision and values to their role and their own selves.
How theirrole is contributing to the Company mission and vision, how it serves the company values.
How do they personally feel connected to the Company mission and vision, how do they serve the company values.
Company Culture evolves over time, and it is fine. The most important is to be conscious and driving the change instead of experiencing it passively. So be ready to repeat the experience each time you go through significant growth and restructuration. Assess and reassess the Company Culture over time. And above all, make your policies and strategies remain consistent with your culture and that everyone is onboard with it.