4 Considerations For Creating An Effective Company Culture

Kelly Schulz | April 20 | Success, Growth, Culture
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As a focus on the role of culture in business performance has increased over the past few decades, companies are becoming more and more aware of the importance of culture. But knowing culture is important and knowing how to create an effective culture are two very different things.

A company’s culture can be found it its values, behaviors, and visible artifacts like employee dress, interior design, and signage. So, culture can be designed and established through attention to and coordination amongst these elements. Typically, culture is established through decisions and actions made by leadership, but overtime, it is the company as a whole that propagates the culture.


Culture Through Established Behaviors

The established ways that members of a company approach common problems are a part of the overall company culture. These behaviors are deemed by leadership and/or the collective team to be the most effective in regards to achieving desired goals and are thus taught to all new employees. Knowing these behaviors becomes one of the defining qualities of people who have been fully integrated into the company culture.

With this in mind, you can see how the establishing, documenting, and consistent training of these behaviors is a part of how a company can create a strong and effective culture. If accepted behaviors are not established and taught to employees, then employees will be forced to determine their own approach – and often reactively without the ability to evaluate its effectiveness.

That being said, relying too heavily on prescribed behaviors can be just as damaging. Too many set ways of doing things can be restrictive. Under these circumstances, employees may be stymied by the fear of breaking rules or protocol and they miss the overall objectives. It is largely thanks to this fact that adhocracy has been found to be the most successful form of company culture. An adhocracy is a form of organization that is flexible and adaptable without restrictive policies or procedures. This form of culture is successful because it frees employees up to respond quickly and effectively to changing situations.

 

Culture Through Established Values And Norms

Finding a balance in the number of established behaviors is crucial for ensuring that employees are provided with enough guidance and yet enough freedom to achieve objectives.  One of the most powerful tools for creating this balance is the transmission of values and norms. According to an article published by Haas School of Business at the University of California Berkeley, norms are “legitimate, socially shared standards against which the appropriateness of behavior can be evaluable” and “are the psychological bases of culture.” Essentially, norms, and the values that underlie those norms, can guide behavior without defining and thus potentially restricting it.

When establishing values and norms, it is vital that they go deeper than just being stated or advertised. These types are values are often considered “cheap talk” with minimal effect on performance. Instead, it’s important that the professed values be reflected in the actions of the company, especially by its leadership.

Here are just some of the choices and actions that can be made to reflect particular values:

  •        How are employees rewarded?
  •        What kind of titles do employees have?
  •        What is the dress code?
  •        Who is welcome to approach leadership directly?
  •        What is the organizational structure?
  •        How are new employees recruited and onboarded?
  •        What traditions are maintained?

It is important that the values underlying these types of choices be compatible if not the same. This will help ensure that the core values are cohesive and readily apparent to all employees.

 

Culture Through Interior Design

Environment sets a powerful tone. Features like color palettes and furniture choices can subtly affect our emotions or convey a desired level of professionalism. This means that one can immediately get a sense about a company by simply stepping into their offices. This effect is so powerful that researchers from different fields, including architecture, environmental psychology, and management have found that environment can affect one’s perceptions, attitudes, and behaviors. Since all of these are core elements of culture, it is clear why designing your physical spaces to reflect your desired cultural values is an important step towards the building of a strong culture.

If your company professes to value open communication, for example, then having glass doors or common areas where employees are welcome to work can help reaffirm that value. Likewise, if your company centers around a clear hierarchical system that encourages employees to work towards upward movement in the company, physical features that differentiate levels like varying office sizes can be valuable. The key is that whether you plan it or not, your company’s physical spaces will instill an impression for your employees and clients. So regardless of the values you wish to embody, your interior design choices are a compelling tool for the creation of a cohesive and effective company culture.


Avoiding The Potential Pitfalls

Just as there are innumerable benefits to a strong and cohesive culture, there are just as many potential problems with a weak, ill-suited, or disjointed culture. A bad culture can lead to low levels of employee commitment and productivity and makes achieving success in general difficult -  if not impossible.

One of the defining qualities of an effective culture is adaptability. Not only has adaptability been shown to predict employee commitment more than any other quality, adaptability has been linked to a company’s ability to survive over time.  Company leadership must constantly be evaluating the effectiveness of company culture as the company and the market changes. Behaviors and values that are maintained after they have become obsolete can drastically affect productivity and even subvert the company’s ability to achieve its goals.  They simply may not be fully addressing the needs of the employees and/or the clients anymore.  

Beyond being adaptable, culture must be cohesive and accepted by the company’s employees. Countercultures can easily arise in the face of a weak, inconsistent, or disliked culture. Subcultures are common, especially within the various separate departments of a company, and can have their own distinct benefits, but the differing values and norms of a counterculture can hinder a company’s ability to achieve their ultimate goals. The values and actions of the counterculture could in fact be in direct opposition to the values of the primary culture – especially if there is significant resentment towards the primary culture. If this happens, things like good customer service and overall quality can quickly deteriorate.

Another important consideration when establishing culture is proper fit. The elements of a company’s culture must not only be complementary and cohesive, but they must also be well-suited to the company’s industry and the type of work being performed. A good example of this is what happened to Atari when they brought in a new CEO. When the new CEO started, he implemented a system of rewards that helped highlight individual achievement in response to what seemed to be a disorganized organizational structure. This cultural shift led to the demoralization of the employees and some of their best engineers left. The reason this approach failed in this case was because the nature of their business lent itself to unstructured collaboration that encouraged the free flow of creativity. What would have been a perfectly valid and effective cultural choice for another company was in this case ill-suited and therefore ineffective.

Ultimately, culture is not something you can design in a vacuum. The industry, the market, and the people who make up the company must all be considered when designing and implementing culture. Ensuring the proper balance of cultural elements can be challenging, but the potential rewards can mean the difference between success and failure.

 

 

 

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