You’re probably used to seeing headlines featured in Forbes, Entrepreneur, Business Insider, and others, declaring the “25 companies with the best culture” or “15 places with the best work/life balance.” The topic of company culture -- i.e., the vision, values, norms, systems, symbols, language, assumptions, beliefs, and habits at your workplace -- has gained a great deal of traction in recent years.
It’s not only a favorite area of coverage for business reporters but also a trendy discussion item at major conferences and seminars, and it’s not hard to see why. Studies show that a great company culture not only engages employees but bolsters productivity and raises profits. But what are we actually talking about here when we deem a company culture “great?”
I’d like to suggest that we venture beyond the hype around this buzz-generating term for a moment, and explore first what company culture is NOT. Below are some of the fundamental misconceptions that my colleagues and I hear a lot. It’s time to put these myths to rest.
Myth 1: Company culture should develop “organically.”
Organizational culture takes root through the values, associated behaviors, and interactions between individuals within an organization. If the core values and principles by which an organization’s team members should operate are not predefined (and “managed”), leaders and subordinates will behave in a manner that they (subjectively) believe to be right.
These personal beliefs are usually the product of learned behaviors and experiences that may be misaligned or (more often) inconsistent with driving a sustainable and results-oriented culture that is right for the business.
At POWERS, we like to frame this as the difference between “managed culture” versus “organic culture.” A managed culture ensures that the right values and associated behaviors manifest throughout an organization, and that the right leadership practices are in place to reinforce these values through practical actions and decision-making tactics.
Don’t confuse a “managed culture” with a “mechanistic culture,” in which hierarchy and bureaucracy become the pillars to communication and practice. Instead, a “managed culture” means that senior leaders of an organization make a deliberate and purposeful effort to define the values that drive the organization’s mission and vision of how it serves its internal and external stakeholders to achieve defined business outcomes.
Myth 2: Employee feedback is the best measure of company culture
This one may surprise you, but while employee feedback does provide some insight into employee experience, it’s not the ultimate measure of company culture.
Here’s the problem with gathering feedback: The data you get from a survey is often circumstantial, one-directional, and predicated on an individual’s personal perceptions, feelings, or emotions. Feedback collection cuts out the full scope of interactions, the crucial back-and-forth that exists at all levels of an organization.
Employee feedback captures a narrow vantage point and perspective. It fails to explore the true implications of positive or negative personal interactions that convey the full impact of an organization’s culture on a business.
A healthy workplace culture will be sculpted by the values, behaviors, and interactions between stakeholders, from senior leaders to the front-line and back again. Fix the culture, and the employee experience will fix itself.
>>Take a look at how we help companies go beyond the questionnaire.<<
Myth 3: The higher the pay, the better the culture
Four years ago, Robert Half published findings from an extensive survey of 12,000 workers that found that “culture, respect, and pride” were three of the most significant factors in job satisfaction.
The whole notion that pay equals better culture is antiquated and misaligned with today’s workforce. As confirmed through numerous studies, employees (especially Millennials) desire engagement, positive personal experiences, interactions, a feeling of connection, belonging, etc. These factors, not compensation, correlate most directly to company culture.
Culture should be defined first. Pay is simply a nuance that will influence an employee’s experience but does not directly impact company culture without other factors involved, such as equity, fairness, integrity, inclusivity, etc.
The actual rate of pay should not be the indicator of an organization’s cultural performance. An employee may be happy with their pay and stick around, but the company culture contributes to a negative work or life experience.
The only reason why companies use compensation as an indicator is that they use “employee satisfaction” as their measure of cultural performance, which I said earlier is not a best-practice.
Myth 4: Company culture does not equal company performance
I could probably cite four novellas’ worth of statistics to directly contradict the above falsehood. Study after study has shown that company culture correlates directly to performance outcomes. That’s why it’s crucial to invest in a true management strategy, because of the connection to your return on investment in your team.
According to Callan, companies ranked highly on company culture report a four times higher success rate, 21% greater profitability, 24% less turnover, and 14% greater productivity than those ranked lower on the culture scale.
Soak that in for a minute.
Not only that, but 90% of employees at companies with great culture express confidence in their leadership, meaning it’s a win for executives to figure this out.
The values, behaviors, and interactions between individuals within an organization sets the tone for how everyone approaches their day -- the decisions they make, the efforts they apply to their work, how they strive to overcome performance barriers... the list goes on and on.
These factors influence how quickly, efficiently, and effectively an organization can maintain optimal performance and fulfill its mission. Less efficiency, reduced optimization, and limited capacity all diminish a company’s bottom line.
So, culture is not the “soft side” of an organization. Rather, it is the concrete foundation by which holds an organization up. It dictates the foundation, the framework, the windows, and the up-keep of the whole house!
Myth 5: There is a “right” or a “wrong” company culture
Here at POWERS, we work with a wide variety of companies in a wide range of industries -- from food and beverage manufacturing to pharmaceutical to automotive. As a result, we know for a fact that it’s not one-size-fits-all. Every business is different, and so every business’s approach to their own culture should be a bit different.
For example, some companies have a very team-oriented culture with participation from workers at all levels, whereas others have a more formal and traditional work culture. Other companies, like Google (a small startup you may have heard of), have an informal and comfortable culture.
Whatever your company culture, it matters to the overall performance of the company. But you don’t have to force yourself to be the next Google or Amazon to land on what works for you.
The beauty of managing your own culture is that you can choose what works best for your particular, unique business. So, leaders, take heed: You don’t have to replicate cultural performance practices that don’t fit the organizational vision and goals. Define the vision, values, and associated behaviors that fit the culture you and your team desire.
Ready to go deeper?
A robust and consistent workplace culture that drives ideal outcomes takes hard, deliberate work and a strong understanding of values and how those play out at every level, from the shop floor to the C-suite.
At POWERS, we specialize in helping companies identify these critical factors, and pinpoint the source(s) of disconnect between stated values at a company/organization and what people experience on the ground.
For more on this important topic, what it means, and how it can work for you, be sure to check out our focused video series, “Power Your Culture.”
We also welcome your thoughts, feedback, questions, and suggestions -- let the debate commence!