Company Culture: How to Develop An Effective Approach

How Confident Are You About Your Company’s Culture?

Every company has its own culture and identity, whether it’s planned or not. However, most companies invest time and effort to create a culture that reflects the ideals and beliefs of the company. Without proper thought and attention, a true company culture cannot happen.

Imagine the working parts of a clock. When even one part is not working, it stops the whole mechanism from working properly. Yes, the clock will tell the right time twice in the day, however, you will be missing so much more of the overall result you’re looking for.

Therefore, it’s important for companies to design an effective plan to create, develop, communicate, and deliver their company culture to their customers.

Here, we will show you what that looks like. We will cover:

• The meaning of company culture
• Why it’s important
• Different culture types
• The 6 Cs of the culture stages
• 8 top tips to bring it all together

By the end of the article, you will have everything you need to move forward with planning, implementing and driving your organisational culture in the right way with great results.

Also, we will share information about a great resource that is available through MBM that addresses the need for company culture and consistency in transferring that through our organisational actions and communications. Watch this space!

What is Company Culture?

So, what do we mean by company culture? Forbes describes it in the following way:

“Company culture represents the living, breathing persona of your company, capturing the norms, values and behaviors that define the very character of your business.”

There are multiple elements that add to the overall culture in any workplace. They include:

• Vision
• Mission
• Core Values
• Policies
• Performance
• Standards
• Leadership
• Environment
• Reward and recognition
• Learning and development
• Overall workplace well-being

There are other factors that can contribute towards the company culture. However, we will be looking at some of the above in more detail when explaining why it’s important and how to make it happen.

Why is Culture Important for the Company?

Some may argue that “culture” in organisations is really just a sales pitch for potential partners, customers and employees. I would argue that company culture plays a vital role in creating an identity the company lives up to. No company is perfect, we all know that. But, those with a strong company culture stand out from the competition in many ways. Here are some reasons why culture in organisations is important.

#1: Increase Hiring and Retention Opportunities

We all want to work for the best. However, if you go online and see review after review talking about a company in a negative light, you will hesitate before applying there. To attract the top talent available, and retain your existing talent, you need a strong reputation in the market.

In 2022, HubSpot ranked No. 1 in Comparably’s list of the best company cultures among large firms. They pride themselves on developing and delivering on their promises in their HEART and SOUL traits and tenets. And, as per the survey results, it’s working. This is a very positive attribute for potential hires and retention of current talent.

#2: Improve Customer Experience

Embedded within the culture will be the best approach to the customers. Therefore, companies with strong company culture have a positive reputation in this area of solving problems and exceeding expectations. Because it’s second nature to them as part of their best practices. Through their outstanding company culture, employees do more, and go above and beyond.

#3: Continuous Development

A company’s culture doesn’t stay stagnant. In fact, it comes to life and grows with the company and shifts with the times. As a result, companies need to be ready to invest in the continuous development of their team and structure to keep up. It wouldn’t work for a company’s cultural practices from 50 years ago to be adopted in today’s workplace. It would be out of touch with the times.

#4: Living Up to the Image They Create

We want to create an image that will attract attention and create positive results. As such, we often tell of the amazing things we are doing as a company to promote our employees’ well-being, support local communities, be greener, etc. Having a strong company culture helps us put all that into place.

Surprising, in our report People Vs Profit People vs Profit: Where Do the Top Companies Put Their Focus? we found that, of the top 100 global companies we researched, many of the companies promote themselves as being people-focused. However, their annual reports say otherwise. In fact, have a look at the full report to see what we mean when the companies simply aren’t putting their money where their mouth is and draw your own conclusions.

Companies cannot survive in today’s fast-paced world by standing still. Instead, they need to be ready to grow and develop to stay ahead of the competition. However, this can only happen when team and cultural development happens on a regular basis.

4 Types of Organisational Culture

So, we have looked at the what and the why of company culture. Here, we will cover 4 common types of organisational culture structures that can occur.

#1- Clan

First, we have the “clan” culture type. Here, we see high levels of collaboration and people-focused efforts. Some people refer to their colleagues as family. So, you would have that mindset with this type of culture. This culture type sees a friendly work environment where the focus is on motivation, team unity, active group participation, and consensus. With this style, you readily work together rather than compete against each other. Team successes are very much celebrated, as well as individual contributions and efforts.

However, every cultural type comes with its own set of pros and cons. Let’s have a look.

Pros

• High level of teamwork and collaboration.
• A united team working towards common goals.
• Enhanced communication.
• Team morale is high.

Cons

• Too much collaboration and team unity can delay results.
• Tough decisions are made based on people’s feelings rather than the needs of the company.
• Some talent may get lost in the group effort, leaving them underappreciated.

Company Example

One company that comes to mind for this type of culture would be Hubspot. They pride themselves on being a company where people are their focus and they certainly walk the talk. One way that they have made their culture so successful is through their “no door” policy. Therefore, everyone has access to everyone else in the organisation. Also, anyone in the team can share an idea, opinion, suggestion, or initiative that will strengthen the company’s standing.

Despite the cons, this type of cultural style for an organisation can produce great results. I have personally worked for a company with this cultural style and loved being a part of such a supportive and well-functioning team where your ideas, opinions and suggestions are really listened to.

#2- Adhocracy

Next, we have the adhocracy. As the term “ad hoc” would suggest, this style is very much put together for a particular purpose. However, that doesn’t necessarily lead to longevity, especially when we’re talking about company culture. So, this type is very much used by start-ups where there is a lot of change happening in a short amount of time. The culture itself revolves around that fast-paced, innovative approach you expect from a fresh, new company with lots of energy and passion.

Pros:

• Fit for purpose until a more structured long-term culture can be developed.
• Great levels of innovation and creativity.
• The environment promotes testing ideas and theories, without the negative consequences associated with more established companies.

Cons:

• Can only be sustained for a short period of time.
• Lacks structure and stability.
• Some in the team will struggle to keep up with the fast pace and aggressive approach.

Company Example

So, this type has a few “big name” examples, such as Google and Facebook. For example, Facebook’s mantra over the years has been “move fast and break things”. For a time, it worked for them. However, in recent years there has been a shift in this philosophy due to increased customer input towards data sharing and security.

Yet, this approach isn’t for everyone.

So, be wary of using this style other than at the start of something new. People like the safety that structure and stability offer. Therefore, this can be overwhelming for some in the team.

#3- Market

Now, let’s look at the market type of culture. As you can imagine, this style is all about the results. So, there is less focus on people and innovation and more on how to achieve the company goals. Competition is high on their priority list. Meaning, second place is not an option and achieving first is their primary goal. Other cultural aspects, such as people, can get lost in the mix.

Pros

• The team is highly focused on achieving goals.
• Mutual team goals and objectives.
• Increased drive and passion to obtain success for the company.

Cons

• An unhealthy competitive focus can lead to an unhealthy work environment.
• Constant pressure for innovation can lead to stress and even burnout.

Company Example

So, for this style, we can look at Amazon. They are seen as relentless in terms of the end results. In fact, they have repeatedly come under the spotlight for having a company culture that focuses only on that and not other important factors. Sure, they have the annual reports to support their approach. However, do they have the reputation, longevity of talent, or loyalty from employees?

Results are great, every company needs to achieve them. However, that should not be at the cost of other focus areas.

#4- Hierarchy

Finally, we have the traditional hierarchy type of company culture. Here, we see a well-maintained structure through the levels and processes that are in place. Also, there are leaders in positions to ensure that their teams perform as highly functioning machines. They are all about the HOW, and the processes, in order to achieve the company goals.

Pros

• Solid structure in terms of responsibilities and duties. Everyone has their assigned tasks and areas.
• High level of stability through the company set up of rank and position.
• Rules and regulations create a sense of fairness in approach to everyone.

Cons

• Lacks innovation and creativity throughout the company.
• More focus on processes rather than people, meaning a lack of growth and development may occur.

Company Example

Now, an obvious example here is most government organisations that require a high level of focus on policies and procedures to function. Think of the red tape required to get most things done through government offices, such as IDs, licensing, registrations, etc. Those procedures are in place for a reason, however, they often overlook the people behind the process.

Processes and procedures are important. In saying that, they should not overshadow other important company culture elements such as customer or employee satisfaction, innovation and creativity, etc. So, for a company culture to thrive, there needs to be a balance.

6 Cs of Company Culture Stages

In addition to the types of company culture we might see, we also need to be aware of the different stages a company’s culture passes through. Let’s have a look.

#1: The Creating Stage

First, we need to have a starting point. This stage doesn’t only happen for brands, new companies or start-ups. It can be when existing companies have a change of leadership or direction. (We will see the link at stage #6 in the cycle).

Here, we usually see the executive team coming together to set out the key elements that will make up the pillars of the company culture. This will include the vision, mission, core values, brand identity, etc. All of these different elements need to start from somewhere. You might see people sharing ideas from previous companies they have worked in, or from famous brands they associate with.

However, regardless of where the ideas come from, they must reflect the identity of the company. These elements will show how they want to practice their business both internally and externally.

#2: The Communicating Stage

Now, we need to start sharing the company culture with those who need the information. First, start with internal communication and cascade the elements throughout the organisation. This takes time, so don’t rush it. Instead, invest the necessary resources and effort to communicate it effectively. Then, check for understanding. Be sure that the message has been received in the way it was intended. So, ask questions. Get people to explain the cultural element as they have understood it. That way, you can be sure that your message hasn’t been misinterpreted.

#3: The Commitment Stage

Here, we need to see the culture come to life through actions and words. This is when the team are showing their commitment to the cultural elements in their everyday behaviours and routines. This can be anything from how they answer the phone to the standards they follow when completing tasks. So, we need to see consistency across the board. A company culture can only be established when the whole company is involved. Part-time effort just won’t cut it.

Here, we may face resistance to the company’s approach to its cultural elements. That’s fine, as long as you have effective ways of managing these queries and bringing everyone on board. Only then will you see the culture emerge successfully throughout every level of the team.

So, encourage everyone to practice the different elements. Recognise those who display these qualities consistently. Also, include a rewards system, if your budget allows and it fits with your culture.

#4: The Calming Stage

Next, everyone is settling into the different elements of the company culture and putting them into practice. We have passed the stages where questions or resistance are front and centre. Instead, we see the calm after the storm. As time passes, more and more people are coming on board in terms of bringing the elements of the company culture to life. This can be anything from applying company policies to “walking the walk” of embodying the values that have been set out for the company.

#5: The Champion Stage

Now, we are in the stage where the culture is practised by everyone without effort. It becomes the norm for the values and policies to be second nature across the board, at all levels of the company. Everyone is on the same page and working towards common goals, using the core values as their guide. Therefore, we are all champions of the company culture in everything we do.

#6: The Challenging Stage

So, here we see changes needing to be made. This can be from evaluating the company culture through surveys, etc. or as a result of changes in the company dynamic. Either way, we challenge the existing culture elements to check their relevance. Therefore, in the cycle, this leads us back to the 1st stage where “creating” occurs. And the cycle continues and grows and develops, along with the company itself.

Best Practices for Creating an Effective Company Culture

So, now we know the following points. We know:

• What company culture is
• Why it’s important
• The different types of company culture
• The 6 stages that make up the culture cycle

Now, we need to know how we can make all of that happen. Here, we will look at 8 top tips that will help you achieve that amazing company culture you’re looking for.

#1: Be Clear and Concise

I previously worked for a company that was developing their company culture. As the Learning and Development Manager, I had a large role to play in how it was rolled out. However, even I struggled to communicate an unnecessarily “high-brow” mission and vision, along with 10 core values, that were lost on a lot of the audience.

From experience, I advise that you keep the pillars of your company culture clear and concise. When there are too many elements or the explanation is too long, the message simply gets lost. I find that keywords that can stand alone without detailed definitions work best and have a more lasting impression on those who are there to bring the culture to life.

#2: Keep the Language Simple

I have seen first-hand the uphill struggle companies can have in creating their culture with overly complicated language in their vision, mission and values. It’s unnecessary to make these elements sound fancy or high-brow. Instead, you need words and phrases that people understand and connect to. Know your audience and design the writing of these elements accordingly.

#3: Communicate The Elements

Communication is key when it comes to having a successful culture in place. I have seen first-hand the lack of cultural awareness in companies that simply stick up a few posters with their mission and values and expect results. It just doesn’t work.

Instead, use meetings and events to promote these elements as often as possible. Repetition creates habits. However, so does understanding. First, start with the leadership team. They need to be the driving force in their areas for this to blossom. Next, have awareness sessions so questions or queries can be addressed. Then, create opportunities to continue the communication on multiple levels, using different resources and approaches. Finally, remember to share the elements with the public. Have the details available on your website and reference different aspects through social media posts and promotions.

#4: Practice What You Preach

We mentioned our People Vs Profit report earlier in the article. Let’s reference it again here because it’s essential that companies live up to their promises. Our research for the report showed that many of the top 100 global companies don’t, in fact, practice what they preach.

Take cultural focuses such as well-being, wellness and mental health. When we reviewed the 2021 annual reports for all 100 of these companies, 21 companies didn’t mention these “caring” words even once. That’s shocking when you consider that these are world leaders in their industries and household names around the globe.

On the opposite side of the scale, Facebook showed a marked improvement in their “employee” mentions in their annual reports from 2020 to 2022. Their figures went like this:

Employee’ mentions go from 52 in 2020 to 56 in 2021 to 234 in 2022 –
a five-fold increase.’

That’s a significant difference and shows the point we’re making about the importance of practising what you preach in order to stay ahead of the competition and keep public promises. So, consider what you communicate and how you can live up to these promises, for employees or in the public eye.

#5: Make It a Habit

Remember, company culture isn’t a one-off event. It needs to be a part of every aspect of the organisation. Therefore, you need to turn the different elements into habits. This can be done in a number of ways.

• Have regular training on processes and procedures so they become second nature.
• Communicate the elements on a continuous basis so everyone is familiar with them.
• Use the pillars of your cultural elements as themes for different company events and activities.
• Include keywords on branded material.

Remember, your company culture needs life breathing through it to thrive and grow.

#6: Have SMART Company Goals

Now, we need to ensure that our cultural path is aligned with company goals and targets. Therefore, ensure that you use similar wording when setting these goals. If your goals and culture are not aligned, the team and other stakeholders will simply become confused about the company’s direction and identity.

#7: Get Input From Others

Sure, the leadership team has great ideas about the direction the company is going. However, they’re not the only stakeholders with suggestions and know-how. Take the time to talk to your team about how they feel regarding the company culture elements. This can be through surveys, performance reviews, town hall meetings or other events that suit the needs of your company size and structure. Also, hear from your customers and have them share their points of view.

#8: Be Ready For Change

Remember, stage #6 of the culture cycle is “Challenging”. We have to be ready to move with the times. Perhaps our product or service has changed over the years and our culture elements need a revamp to match those changes. Be prepared to start the cycle again to achieve consistency between the company culture and where you are today.

To Wrap up

Now, culture doesn’t happen overnight. However, we have given you some great information and resources throughout the article to help get you there. Whether you’re a new start-up beginning from scratch, or an old hand looking for a different approach, you have what you need here to make it happen.