
What is Corporate Culture?
Corporate culture is a topic that has gotten a lot of attention on HR blogs and websites and at national conferences like SHRM and HR Tech. The focus on identifying, communicating, and promoting your organization’s culture has spread from startups and small businesses to large enterprise corporations, nonprofits, and even governmental institutions.
But what exactly is corporate culture? Inc.’s online encyclopedia defines it as:
“The shared values, attitudes, standards, and beliefs that characterize members of an organization and define its nature.
Corporate culture is rooted in an organization’s goals, strategies, structure, and approaches to labor, customers, investors, and the greater community. As such, it is an essential component in any business’s ultimate success or failure. Closely related concepts are corporate ethics (which formally state the company’s values) and corporate image (which is the public perception of the corporate culture). Every company has a culture—but not all cultures (or aspects of them) help a company reach its goals.”
Why is Corporate Culture Important?
Healthy Culture Increases Employees’ Commitment & Productivity
Office Space Coworking observes that in a healthy culture, employees view themselves as part of a team and gain satisfaction from helping the overall company succeed. When employees sense that they are contributing to a successful group effort, their level of commitment and productivity, and thus the quality of the company’s products or services, are likely to improve. In contrast, employees in an unhealthy culture tend to view themselves as individuals, distinct from the company, and focus upon their own needs. They only perform the most basic requirements of their jobs, and their main—and perhaps only—motivation is their paycheck.
Culture Communicates the Company’s Vision to All Employees
In his article, How to Create a Winning Corporate Culture, John O’Malley argues that the CEO or President of the organization sets the culture with his or her personal actions and attitudes that communicate their vision for the company to all employees. His advice to leaders is to “define your vision and communicate the same to all employees, give them the opportunity to find ownership in your vision, let your vision for the company become their vision for the company. A company without a vision is reactive in nature, and its management is seldom confident addressing competitive threats and stepping into the future. Knowing one’s objective greatly improves the chances of achieving it.”
Culture is a Major Consideration for Candidates Deciding Where to Work
Still think that salary is the most important consideration for job seekers when considering their employment options? Not according to The Wall Street Journal, that recently reported 64% of Millennials would rather make $40,000 per year at a job they love than $100,000 a year at a job they think is boring.
Why is culture so important to these Millennials? Researcher Randall S. Hansen, Ph.D explains it’s because the organization’s culture will affect a worker in many, many ways, such as hours worked per day and per week, availability of options such as flextime and telecommuting, how people interact with each other in the workplace, how people dress for work, benefits offered to employees, office space, training and professional development opportunities, perks — just about everything related to a person’s time at work.
What Types of Corporate Culture Exist?
According to Robert E. Quinn and Kim S. Cameron at the University of Michigan at Ann Arbor, there are four types of organizational culture: Clan, Adhocracy, Market, and Hierarchy.
Hierarchy Culture
Hierarchy oriented cultures are structured and controlled, with a focus on efficiency, stability and “doing things right.” Procedures govern what people do. Effective leaders are good coordinators and organizers. Maintaining a smooth running organization is important. The long-term concerns of the organization are stability, predictability, and efficiency. Formal rules and policies hold the organization together.
Organizations ranging from a typical U.S. fast-food restaurant (such as McDonald’s) to major conglomerates (like Ford Motor Company) and government agencies (such as the Justice Department) provide prototypical examples of a hierarchy culture. Large organizations and government agencies are generally dominated by a hierarchy culture, as evidenced by large numbers of standardized procedures, multiple hierarchical levels (Ford has seventeen levels of management), and an emphasis on rule reinforcement.
Even in small organizations such as a McDonald’s restaurant, however, a hierarchy culture can dominate. For example, many of the employees in the typical McDonald’s restaurant are young people who have no previous training or work experience, and a hallmark of the business is the uniformity of products in all outlets. Key values center on maintaining efficient, reliable, fast, smooth-flowing production.
Market Culture
Market oriented cultures are results oriented, with a focus on competition, achievement, and “getting the job done.” Leaders are hard-driving producers and competitors. They are tough and demanding. The glue that holds the organization together is an emphasis on winning. The long-term concern is on competitive actions and achieving stretch goals and targets. Success is defined in terms of market share and penetration. Outpacing the competition and market leadership are important.
An example of a market culture is a Philips competitor, General Electric. General Electric’s former CEO, Jack Welch, made it clear in the late 1980s that if GE businesses were not number one or number two in their markets, they would be sold. Welch bought and sold over three hundred businesses during his twenty-one year tenure as CEO. The GE culture under Welch was known as a highly competitive, results-or-else, take-no-prisoners type of culture. It reflected a stereotypical market culture.
Clan Culture
Clan oriented cultures are family-like, with a focus on mentoring, nurturing, and “doing things together.” Instead of the rules and procedures of hierarchies or the competitive profit centers of markets, typical characteristics of clan-type firms were teamwork, employee involvement programs, and corporate commitment to employees. These characteristics were evidenced by semiautonomous work teams that received rewards on the basis of team (not individual) accomplishment and that hired and fired their own members, quality circles that encouraged workers to voice suggestions regarding how to improve their own work and the performance of the company, and an empowering environment for employees.
Leaders are thought of as mentors and perhaps even as parent figures. The organization is held together by loyalty and tradition. Commitment is high. The organization emphasizes the long-term benefit of individual development, with high cohesion and morale being important. Success is defined in terms of internal climate and concern for people. The organization places a premium on teamwork, participation, and consensus.
Adhocracy Culture
Adhocracy oriented cultures are dynamic and entrepreneurial, with a focus on risk-taking, innovation, and “doing things first.” The adhocracy organization may frequently be found in industries such as aerospace, software development, think-tank consulting, and filmmaking. An important challenge for these organizations is to produce innovative products and services and to adapt quickly to new opportunities.
Unlike markets or hierarchies, adhocracies do not have centralized power or authority relationships. Instead, power flows from individual to individual or from task team to task team, depending on what problem is being addressed at the time. Emphasis on individuality, risk taking, and anticipating the future is high as almost everyone in an adhocracy becomes involved with production, clients, research and development, and other matters. For example, each different client demand in a consulting firm is treated as an independent project, and a temporary organizational design is set up to accomplish the task. When the project ends, the structure disintegrates.
How Do I Identify MY Corporate Culture?
Take an OCAI Assessment
The researchers mentioned above, Robert E. Quinn and Kim S. Cameron, have made a free assessment called the OCAI (Organizational Culture Assessment Instrument) that you can take online in about 15 minutes. The results will identify your current company culture as one of the four types above, as well as measure your desire for a different company culture from what you have currently.
Ask Your Employees
A good way to define culture is by asking your employees to weigh in on the following questions by the Hagberg Consulting Group. These get at the essence of what your corporate culture is today, according to the people who are really experiencing and living out the culture daily:
- What 10 words would you use to describe your company?
- Around here what’s really important?
- Around here who gets promoted?
- Around here what behaviors get rewarded?
- Around here who fits in and who doesn’t?
The questions suggest that that companies may have a “real culture,” discernible by answering these questions, and another one which may sound better but may not be the true one. For a true measure of corporate culture, look past the c-suite and the board room, filled with people who might define culture the way they’d like it to be, and ask your ground-floor employees what they see–they’ll give you the real picture.
Bring in an Expert
Sometimes assessing something as personal and prevalent as corporate culture is difficult to do from the inside, particularly if you have members of your leadership team who would rather paint culture with a pretty brush rather than see, and deal with, what it is. In these cases, it might be worth bringing in a culture consultant. These work environment experts can run 360 degree culture evaluations within a matter of hours and personalize a plan to enhance, promote, or adjust your company culture to reflect your organizational goals.
Hint: LocalWork.com offers culture consulting for our clients. If this is a direction you’re considering, let us know if we can help!
How Can I Improve My Corporate Culture?
Support Your Employees’ Career Development
Supporting your employees’ career development will revitalize their commitment to the role. Ask your employees where they see themselves in five years, or what they want to gain from their time in this role, and help them achieve those goals. Understand that this position is one stop along your employee’s career path, and they likely have objectives they’d like to accomplish in their time here. If they feel you’ve invested in them, they are more likely to want to move up within your company, rather than leave for a position elsewhere.
Offer job shadowing, career coaching, mentoring, professional networking, international opportunities, virtual learning sessions, and formal classroom instruction. Be generous and don’t require employees to prove a direct tie between a networking event and your current project or department. Look at the individual as a whole and help them mature into a better professional, not just a better account manager for your particular brand.
Promote Teamwork and Camaraderie
Encouraging good team building skills improves morale and productivity. Without team cohesion you limit your team to the effort each individual can make alone. Sponsor annual events that celebrate employees, such as parties, picnics, and formal dinners. Organize social events like baseball, bowling, contests, and classes during work hours.
Encourage a Healthy Work-Life Balance
Sufficient vacation allowance is a great way to improve motivation and morale among your employees. Consider flextime, generous vacation policies, and spontaneous afternoon office closures throughout the year.
One of our clients, ethology, sets aside one day per quarter for their employees to “Relax and Renew” doing something they personally find restful and rejuvenating, such as going on a hike, taking a spa day, or attending a painting class. These quarterly “pauses” are intended to give time and space for employees to reflect on personal and business goals and how they might rebalance their work and home lives for the upcoming quarter.
How Can I Attract Great Talent with My Corporate Culture?
Show Off Your Culture On Social Media
Snap photos at corporate events, during happy hours, team potlucks, or even internal brainstorming sessions, and post them on Instagram, Facebook, and Twitter. Profile a different employee each week so a job seeker can get a sense for the type of people that work at your organization. Create Pinterest boards that reflect your values and style. Even consider incorporating Snapchat stories to give followers a fun, inside look into your company “behind the scenes.”
Get Out In the Community
Relationships are a powerful way to communicate your culture to your industry’s local community. Get your best company representatives (not necessarily your highest paid, but those who embody your culture best) out and about, networking and getting together with connectors in your area. These relationships will give your team the opportunity to share your culture first hand with others and establish a good reputation with an influential network of people who can recommend your company to job seekers and other contacts.
Create a Culture Profile on LocalWork.com
Access thousands of job seekers searching for companies by corporate culture by creating a free profile on LocalWork.com. Add photos, video, and information about your unique work environment, perks, and team dynamics that give active job seekers the ability to find you by your culture, not just your company name or open job titles.
Get started with your free profile now!