Culture is a term usually reserved for reasonably large groups. We’re talking countries, continents, and empires. Historically, this has always been the case. In modern times, culture has begun to occur in micro-scale environments, such as companies and organizations. Organizational culture is a big deal. It’s such a big deal that many potential employees and potential investors are looking at company culture to signal whether the organization is a good fit for them.
What Is Organizational Culture?
Organizational culture is the set of values, beliefs, and norms that employees in an organization share. It guides their behavior and shapes how they interact with one another.
An organization's culture can be a powerful motivator, or it can be a barrier to change. It can foster creativity and innovation, or it can stifle them. It can encourage collaboration and teamwork or lead to infighting and politicking.
Culture is something that's often taken for granted in the workplace, but it's essential for an organization’s success. It plays a significant role in shaping how an organization functions—for better or worse.
Organizational culture isn’t simply what happens in an office on a day-to-day basis. Instead, it’s a more holistic view of the attitudes and practices that define the organization.
Culture isn’t a fixed idea. It’s not something founders will jot on a whiteboard the day they decide to launch a business or even after hiring their first team members. Even when an organization has a predetermined ideology around what culture they’d like the company to exhibit, culture is fluid; it evolves.
Organizational culture should adapt to business needs and the people within it, and leadership should offer guidance first and foremost by setting a good example.
Why Is Organizational Culture Important?
Developing a positive, welcoming work culture for your employees leads to happier, more efficient employees and creates a company identity that looks inviting to those on the outside. When investigating a potential new employer, 77% of applicants would check to see if a company’s culture was a good match for them before considering applying. According to the same study by Glassdoor, a massive 56% value organizational culture above compensation. People are putting how they feel life would be within a company over cold hard cash—imagine that!
If you’re a business leader, reading this, evaluating your culture, and wondering if you’ve got it right, that’s great. Self-reflection is an excellent place to start. But try not to stress if you’re finding it challenging to build a sought-after company culture. It doesn’t happen overnight. The culture of Rome was not built in a day!
HR’s Role In Company Culture
Human resource departments aid the people within a business and play a pivotal role in company culture. The goal of HR is to nurture and develop a source of accountability for culture within an organization.
Relationships are the core of company culture, especially between coworkers, management, and employees.
If you look at the various significant events within an employee’s time at an organization, both organizational culture and HR are bound hand in hand:
- When employees are recruited.
- Onboarding.
- During employee performance management sessions.
- While professional development opportunities are being structured.
- Disciplinary proceedings.
HR is present throughout these events, and company culture makes itself known through how those interactions occur. HR is in the privileged position of being able to engage with employees and genuinely influence the organization's culture and how it is perceived.
Embracing D.E.I.
Organizations are becoming more aware that diversity, inclusion, and anti-oppression promote belonging for individuals and equality for everyone. Diversity, equality, and inclusion are significant HR directives in the hiring process. HR can directly influence and shape the company's culture by being thoughtful about the interview questions they ask and the language they use.
When it comes to inclusion in the workplace, HR must ensure that everyone feels like they belong. This can be done by ensuring that a diverse mix of employees creates an inclusive environment where everyone feels comfortable being themselves.
Giving Feedback
Understanding how employees feel in given situations, following certain events, or generally about the company as a whole is a major part of HR’s responsibility. Taking the opportunity to survey how employees feel is a positive organizational culture boost in itself, but using that data to adapt and evolve the business is a level above.
There are many opportunities for HR to be involved in the feedback process;
- Conducting employee surveys
- Organizing and taking part in 1-on-1 meetings
- Highlighting employee achievements and celebrating them
The key here is to react and implement effective tactics such as those above. HR must use employee feedback to predict organizational culture shifts and prepare for what that might bring.
The Company Culture Types of 2022
As diverse as cultures are worldwide, so too are company culture types. What follows is a list of the most regularly seen cultures in the business world, but this is by no means an exhaustive list.
Purpose Culture
Purpose culture manifests itself as the communal drive towards a common goal that benefits the greater good. These aren’t cultures focused on profits or even necessarily company growth. Instead, they are wholesome organizations that strive to better the world with initiatives focusing on human rights, sustainability, and the environment as an example.
This culture type is common within not-for-profit organizations. Those within the organization aren’t driven by individual needs. Instead, they prepare to put personal goals aside to achieve something greater than themselves.
There are, of course, some potential drawbacks to this type of culture. For example, if not everyone in the organization shares the same commitment to the cause, it can lead to conflict and tension. Additionally, this culture can be difficult to maintain over the long term, as employees may eventually become disillusioned or burnt out. Despite these potential challenges, a company with a cause-driven culture can be a very rewarding place to work.
Collaborative Culture
In collaborative or clan cultures, people place a high value on relationships and teamwork and are less likely to be competitive or individualistic. In this culture, employees are loyal to the organization and motivated by a sense of community and belonging felt at work.
Collaborative cultures often thrive in small businesses when everyone knows each other, and there is a sense of trust and mutual respect among employees. Clan cultures can also be found in large companies, but they are usually challenging to maintain.
Considered to be high-performing and productive, collaborative culture is a type of culture in which people feel a sense of allegiance or kinship and cooperate to achieve a common goal. There can be drawbacks such as lessening individual creativity and innovation. Also, clan culture can be very exclusive and difficult for outsiders to enter.
Market Culture
Otherwise known as competition culture, market culture is hyper-competitive. The aim is to be the best and seize the biggest market share. Individual triumphs are deemed almost irrelevant to the company's successes as a whole. The same goes for company decisions; company achievement is put above individuals.
Market culture organizations will often incentivize their employees with impressive commissions or bonuses to bring in new business or donations. This attracts a particular type of person (one willing to focus on driving growth in exchange for financial compensation). As commission-based businesses are competitive, market-type culture can potentially generate a hostile work environment if not properly managed.
Leadership Culture
Leadership culture focuses on creating a set of shared values and beliefs guided by the actions of an organization's leaders. It's about establishing a common understanding of policy and what's essential to the organization. Good leadership cultures are based on trust, respect, and communication. They encourage people to take risks and be innovative while also emphasizing teamwork and collaboration.
A strong leadership culture can be a significant competitive advantage for organizations, no matter their field. This culture type helps attract and retain top talent, motivates employees to do their best work, and creates a sense of unity and purpose. Directors who develop a strong leadership culture can inspire their employees to achieve extraordinary things.
However, if the leadership culture is not aligned with the company's values or does not resonate with employees, it can lead to dysfunction and conflict.
Hierarchy Culture
There are many different interpretations of what a "hierarchy culture" might be. Still, at its core, it refers to an organization with a clear chain of command or a level of stratification. In other words, people in positions of power tend to have more influence and control than those lower down in the pyramid.
There are both positive and negative aspects to hierarchy cultures. On the one hand, they can provide a sense of order and stability by giving people clear roles and responsibilities. This can be especially helpful in large organizations where it can be challenging to keep track of everyone and everything without rigid organizational structure. On the other hand, hierarchical cultures can be inflexible and resistant to change because there is often resistance to new ideas or approaches from those in positions of power. They can also be quite exclusive, and without the right resources, it can be difficult for people to advance, creating an unhealthy sense of competition.
Task-Oriented Culture
Task-oriented company culture is a type of corporate culture where the focus is on getting work done efficiently and meeting deadlines. Within a task-oriented culture, meetings are held, tasks are discussed and then assigned to the best-suited person. This culture type manifests as a culture within a culture, namely within a clan-based culture, regularly visible among new and small startups.
Within a task-oriented culture, there is often pressure to meet goals and produce results, and employees, typically, are rewarded individually. Task-oriented cultures can be very effective in terms of productivity. However, they can also be very stressful for employees who require a lot of structure and direction to be productive. It can also be problematic for team members who prefer collaboration. If not appropriately managed, a task-oriented culture can lead to high levels of employee turnover.
Adhocracy or Creative Culture
Creative culture is based on the belief that people solve problems and come up with new ideas best when given the freedom to do so. Though there is often a baseline of autonomy in this culture type, creative cultures often form a cooperative and open environment where people are free to share their ideas with others.
Adhocracy cultures typically encourage risk-taking and aim to be pioneers of progress. Failure is seen as part of the learning process and often celebrated, as it means that employees are pushing themselves to try new things. Adhocracy or creative culture works best by coloring outside of the lines with constant innovation. Innovation is not just accepted within an adhocracy culture—it’s the rule.
Creative cultures can face challenges trying to maintain a cohesive team when everyone is working independently. Communication and collaboration are essential in an adhocracy to ensure that everyone is on the same page and working towards the same goals.
Consumer-First Culture
A consumer-first company culture means that the company's priorities center around the customer experience. Everything from the company structure and how it makes decisions are decided by what will best serve the consumer.
Consumer-first company cultures have several tangible benefits. It can lead to higher customer satisfaction, brand loyalty as well as increased sales or profits. In addition, it can help to attract and retain top talent. Employees are more likely to be satisfied in an environment where they feel their work is meaningful and valued.
This might seem like a culture reserved exclusively for front-line employees. However, it also includes employees working on customer experience behind the scenes even if they aren't regularly interacting with consumers face-to-face.
Empathetic and adaptive people thrive in consumer-first environments. A customer-centric environment requires everyone in the company to be focused on the customer's needs at all times. This can be a challenge. Without proper management, employees in consumer-first cultures are more predisposed to burnout.
Company Subcultures
- Enjoyment Culture - where fun and humor are the priority.
- Results Culture - meeting goals and achieving targets with performance metrics.
- Safety Culture - focusing on job security for employees and risk-averse strategies.
- Caring Culture - with a focus on employee wellbeing and loyalty.
Choosing The Right Organizational Culture
It’s important to note that it’s unlikely you will be able to select a culture, and your organization will intrinsically adopt it. Yes, founders can try and emulate one of the company culture types but directing cultural evolution or transformation is an enormous task.
If you’re feeling overwhelmed trying to wrap your head around company culture and would like a helping hand in forming or reshaping your company’s culture, get in touch with us at Culture Booster. We will work to assess where your culture currently is and guide you on your journey to developing a culture that best suits your organization.
Key Takeaways
Organizational culture is an inherent part of any business and one which grows organically with the company as it evolves. Employees now express that culture is more important to them than ever. Now is the time to make healthy organizational cultures the standard.
- There are cultures within every business, identify which is within yours and work to better it for the sake of the company and its employees.
- Don’t underestimate the importance employees place on culture.
- Look to internal departments such as HR to help nurture and grow the culture in your organization.
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