What is a company culture?

Culture is as a social control system that operates in organizations through the norms (or social expectations) that are shared. From this perspective, culture can be seen as the pattern of behavior that is reinforced by people and systems over time. This view conceives of culture not as a lofty set of abstract values or something vague like “the glue that holds the organization together” but, rather, as something manageable. It is simply those behaviors that are rewarded formally by systems like money and promotions or informally by the approval of our colleagues. Thinking about culture in this way allows us to diagnose it (understand the existing patterns of behavior), manage it (align it with strategy) and, when needed, change it.

Why is a strong business culture important?

Culture is important because it plays a crucial role in shaping the behavior and performance of individuals and groups within organizations. A strong culture impacts customer relationships and contributes to the overall health and sustainability of an organization. A well-honed and nurtured culture can lead to a competitive advantage and improved business performance. A positive and strong organizational culture can lead to increased employee satisfaction, higher productivity, and better overall performance.

5 Ways to Change Company Culture

There are five common ways that leaders can change culture. These levers are based on the underlying psychology that occurs in settings where there are very clear expectations for the “right” way to behave, making it difficult not to comply. These five key levers (the LEASH model by Professor Charles O’Reilly at Stanford) include:

  1. Leader actions
  2. Employee involvement
  3. Aligned rewards
  4. Stories, signals, and vivid illustrations
  5. HR system alignment.

7 Good Company Cultures Examples:

  • Microsoft Culture: Under the leadership of Satya Nadella, Microsoft has emphasized the “One Microsoft” concept, which aims to break down silos and promote collaboration across different teams and divisions within the company. They embrace a growth mindset, where employees are encouraged to take risks, learn from failures, and continuously improve.
  • Google Company Culture: Google is known for its culture of innovation, where employees are encouraged to explore creative ideas, take risks, and pursue projects they are passionate about. They also value transparency and open communication.
  • Zappos Business Culture: Zappos is famous for its customer-centric culture. The company places a strong emphasis on delivering exceptional customer service and creating a fun and supportive work environment. Their core values are prominently displayed, and they even offer new employees money to quit if they don’t feel they fit in with the company culture.
  • IBM Culture: IBM has a long-standing culture of innovation and research. They have a strong commitment to technical excellence and have historically encouraged employees to engage in research and development.
  • Southwest Airlines Company Culture: Southwest is renowned for its unique corporate culture centered around employee empowerment and a fun, friendly atmosphere. They prioritize hiring for attitude and have a strong focus on teamwork.
  • Netflix Business Culture: Netflix has a culture that promotes freedom and responsibility. They give employees a great deal of autonomy and trust them to make decisions in the best interest of the company. They are also known for their “Culture Deck,” a document that outlines their values and expectations.

What are the culture differences between a mature business and an exploratory business?

The culture needed for success in a mature business typically emphasizes predictability, efficiency, incremental improvement, and compliance with procedures and processes. Being successful in an explore business requires almost the opposite – with an emphasis on autonomy, speed, experimentation, taking risks, and rapid adjustments to changes. The cultures required are completely different. Trying to manage an exploration venture with the culture of a core business is a recipe for failure.