Whether you’re a start-up or an established incumbent, in today’s hyper-competitive business environment where the war for talent rages on, you need to be intentional about fostering a winning culture. So what is company culture and why should start-ups care about it?
C ompany culture isn’t a topic that’s relevant solely in the realm of start-ups. Most human capital experts agree that building a strong culture that fits your business strategy is the shortest route to success.
This is what Colin Angle, co-founder of iRobot, had to say:
Culture is the magic start-up ingredient.
Wise words indeed.
That’s because engaged employees are more productive and loyal. They create more satisfied customers, better financial results, and greater shareholder value. The disengaged do the opposite and are more likely to move jobs, even if you desperately want to hang onto their skills.
Of course, if you’re a start-up business, you may not have knowledge of people management best practices nor the budget to invest in the correct enabling tools.
And we understand that the lives of start-up leaders are typically defined by long hours and endless meetings and calls with potential customers and investors. But as your business and employee base grow, don’t neglect to set time and energy aside to foster your organizational culture.
You need to be prepared to put in the work.
The good news is that this isn’t a topic that’s too difficult to learn. There’s a wealth of online resources and excellent HR management platforms and tools at your disposal.
In this article, we will
1Define and explore the concept of company culture in 2021
2Explain how company culture affects employees, both positively and negatively
3Look at the 4 types of company culture
4Share 6 company culture examples to inspire you
5Uncover the steps you can take to make your company culture irresistible
The challenges of building a strong corporate culture: where are we now, and how did we get here?
The world outside work has changed with the mobile/social/cloud revolution. Today, employees across the full spectrum of generations expect to communicate, engage and connect with their colleagues in the same way they do with their friends and families outside of the workplace. They have short attention spans and a desire for immediacy in all they do.
Why traditional HR approaches are no longer working
Now, this isn’t a brand-new phenomenon, but too many companies still haven’t moved with the times both in terms of their mindsets and the tools and technologies they give employees to do their work. Many are still doing one-way executive comms, annual performance reviews, and endless meetings and emails. Some are still clinging to legacy employee systems that haven’t kept up with advances in consumer technology. All of the above don’t engage today’s talent.
We’ve reached a tipping point: hybrid workplaces are here to stay
The pandemic has permanently changed the way we live and work. Indeed, some argue that the future of work has been completely re-invented in the period of just 18 months. Today, many employees want to continue to work from home, at least some of the time. A recent Gartner report reveals that 75% of hybrid or remote knowledge workers say their expectations for working flexibly have increased, and four out of 10 employees are at risk of leaving if you insist they return to an in-person office environment.
Forward-looking organizations appreciate what’s at stake. They’re heeding this warning and rethinking their workplaces, work models, and workflows from the ground up.
Understanding company culture: definitions from startup leaders
For many, company culture is a concept that’s easier to experience than to describe. So, let’s hear from those who have already said it best:
Rauf Fadzillah, CEO at Palindrome Communications
Brian Chesky, Co-founder and CEO at Airbnb
David Cummings, Co-founder at Pardot
Brian Halligan, CEO at HubSpot
Viel Merck Carillo, former HR Manager at Laundrafe
Aayush Jain, CEO at cliff.ai
Bao Nguyen, GM at Grove HR
How does company culture affect employees?
For many, the term corporate culture sounds like a buzzword. Some might even dismiss it as HR “hocus-pocus.” But let’s heed the wise words of the abovementioned captains of industry. If they credit it as a powerful enabler of their success and place corporate culture high on their boardroom agendas, shouldn’t we be doing the same?
One way to better grasp the notion of corporate culture and embed it into the DNA of your organization is to consider how it affects your most important asset – your people.
The unseen costs of neglecting corporate culture
First, let’s consider how a poor corporate culture can negatively impact your people:
Burnout and absenteeism:
All too often, businesses are so laser-focused on their financial success that they expect their people to operate effectively in a fast-paced, high-stress environment. Often this comes with less-than fair wages and the requirement to work long hours and over weekends.
This is an ill-advised approach that often backfires. Indeed, according to recent research, a cut-throat environment actually damages productivity over time.
People who consistently push themselves too hard are subject to anxiety, stress, and ultimately burnout. “We’re only human,” as the saying goes.
Employers also need to understand that there are hidden costs associated with continuously expecting people to overperform.
Consider these statistics:
- 83% of US workers suffer from work-related stress.
- US businesses lose up to $300 billion yearly as a result of workplace stress.
- Stress causes around one million workers to miss work every day.
- Depression leads to $51 billion in costs due to absenteeism and $26 billion in treatment costs.
- Work-related stress causes 120,000 deaths and results in $190 billion in healthcare costs yearly.
Low morale and disengagement
Employee disengagement is another price of operating a cut-throat environment and cultivating a culture of fear. Organizations with low employee engagement scores experience lower productivity, profitability, and lower share prices over time.
Lack of loyalty which leads to high employee turnover rates, is a third cost. People go out job-hunting or even turn down promotions or resign. The cost of high employee turnover will also be experienced in higher recruiting and training expenses.
The rewards of getting it right
In the unlikely event that you’re still skeptical about investing time and energy into building a positive culture, read on.
Here are 6 benefits of a healthy company culture you can look forward to if you make it a strategic priority:
- Happier, healthier, and more motivated people
- Growth and revenue gains
- Streamlined internal decision making
- Satisfied customers
- Better employee retention
What are the 4 types of culture?
So, we’ve established that applying a sharp focus to people and culture is a necessary first step to start-up success. But how do you go about defining and building your company culture if it’s something still new to you? The first step is to determine what culture type you have now – and establish if that’s the one you want to foster and grow.
To operationalize the process of culture development, it’s useful to consider the Competing Values Framework, a cultural assessment tool developed in the 1980s and is still being used today. It identifies four discrete types of company culture.
Which one sounds most like your business today – and the business you want to create?
Often described as a "family culture," a clan culture is a relaxed, friendly, and positive workplace. People typically share many common values and interests. Senior leaders of clan cultures are well-respected by their employees and often looked up to as mentors.
A clan culture is often found in start-ups as it helps to establish a collaborative mindset where people feel encouraged to share their ideas. On the downside, encouraging people to have fun and feel empowered in the workplace can introduce the risk of the office lacking discipline and authority.
Adhocracy cultures revolve around innovation and winning. The office environment is typically vibrant and fast-paced. Organizations with adhocracy culture are always focused on creating “the next big thing.” They encourage risk-taking and experimentation.
Facebook’s Mark Zuckerberg embodies this type of culture’s ethos in his words: “Move fast and break things. Unless you are breaking stuff, you are not moving fast enough.” Dangers of this culture include burnout from the constant pace and pressure and financial precariousness, should new ventures consistently fail.
Market cultures have an unwavering and oftentimes ruthless focus on results, revenue, performance, and market share. Employees are expected to meet near-impossible targets and overperform. Leaders are tough and demanding. The potential drawback of such a culture is that an obsession with the business’s success can come at the cost of teamwork and community.
Organizations with hierarchy cultures place a strong emphasis on structure, rules, and maintaining control. Authority and boundaries are made clear. The office environment is highly organized, and everyone is expected to abide by established procedures and “do things right.” The risk of operating a hierarchy culture is that people may feel as if they’re being constantly watched and micromanaged, which can lead to resentment and disengagement.
6 company culture examples that will inspire you
We often hear about companies being rated as “employers of choice” or “the best places to work.” These findings are typically the result of anonymous surveys from employees who rate their companies according to several core culture metrics, including pay, benefits and perks, work-life balance, learning and development opportunities, colleagues, leadership, and overall satisfaction, loyalty, pride, and company outlook.
Meet some of the companies who regularly top these lists:
- Google: Employees at Google have the zeal to work there because of the impeccable work culture they get to enjoy all year round. Google achieves this by encouraging creativity, ensuring employee transparency, setting core values, providing financial support, and enabling company mobility.
- Apple: As a leading company in the technology industry, Apple's work culture is driven by a passion for new products with no end to challenges and opportunities. It does this by focusing on creativity and innovation, moderate competition, excellence, teamwork, and integrity.
- Netflix: On Netflix’s quest to provide unlimited entertainment to the world, they found out that a positive work environment is a key to achieving their dreams. So, they have chosen to give their employees the best possible conditions to work in by placing emphasis on freedom and responsibility, valuing their values, encouraging open disagreement, and hiring the best.
- Amazon: Amazon's distinctive organizational culture fosters a performance-driven environment that encourages people to innovate to deliver an outstanding continuously improving customer experience. Its brand identity is grounded in delivering a disruptive and innovative customer experience.
- Tesla: Ambitious innovation is deeply ingrained in Tesla’s organizational culture. It encourages employees at all levels to experiment with different ways of doing business. Elon Musk insists that employees use the First Principles method, also known as reasoning from first principles, in dealing with problems. Day-to-day operations and communications in the company are not bound by strict levels of management and bureaucracy.
- Microsoft: Microsoft’s organizational culture focuses on ensuring workforce resilience and capability to address business needs in a dynamic market. However, qualities such as compassion and giving are ingrained in its culture. Other key tenets of its corporate culture include accountability, quality and innovation, responsiveness to customers, a growth mindset, and diversity and inclusion.
How to make your company culture a competitive differentiator
Your culture can either be your greatest strength and competitive differentiator… or your most crippling weakness. In this section, we’ll explore the key steps you can take to start building a culture that puts you on prospective employees’ most-wanted lists and ensures you are able to grow and retain your top talent.
Let’s start by establishing how well you’re currently doing. Here is a list of simple signs to look out for when it comes to poor company culture.
10 signs of a toxic office culture
Be vigilant and take action if you notice any of these signs which could indicate that your organization is harboring a toxic company culture:
- Lack of team bonding & communication
- Competition over collaboration
- Lack of accountability
- Exceeding high turnover rate
- Absence of work-life balance
- Uncontrolled and vicious politics
- Extreme criticism
- Negative reputation and reviews
- Frequent lateness or absence from work
If any of these sound familiar, don’t despair. Re-inventing yourself and bolstering your culture is within your reach.
6 characteristics of a great company culture
Creating a healthy culture for your people rests on a few major principles. The best workplaces typically demonstrate these 6 essential characteristics:
- People genuinely care about and are interested in their co-workers as friends.
- They support one another and are kind and compassionate if their colleagues are struggling.
- Everyone avoids finger-pointing and forgives mistakes.
- People inspire one another.
- Leaders lead by example, show humanity, and emphasize the meaningfulness of people’s work.
- No matter what their level of seniority, everyone treats their co-workers with respect and gratitude and displays trust and integrity.
Steps to building a strong company culture
As a leader, how can you foster these principles? Here are 6 steps to try:
- Show empathy: If you see that people or teams are struggling, step in before things go completely off-course. Empathy allows you to create bonds with your people and ensures they feel less vulnerable.
- Listen: Take the time to listen to your people and understand their views. This is especially important when you’re faced with difficult decisions.
Go out of your way to help: Spend time engaging with your teams to find out what it is they need to excel and how you can clear the path to success for them. And then praise them for a job well done.
- Be approachable and encourage people to talk to you: To gain the respect of their people, leaders need to be seen to be personally involved and participating. Beware of appearing intimidating. Encourage people to speak up and share their ideas.
- Lead by example and authentically: Don’t try to be someone you’re not. Acknowledge your areas of strength as well as your weaknesses. Don’t be too proud to turn to others for help when you need it.
- Don’t cultivate a culture of fear: At some point, people will inevitably make mistakes. But don’t overreact. Encourage people to acknowledge what went wrong and move quickly to fix it.
- Give your people “wings” – let them explore the art of the possible: Delegate authority. Give your people the freedom to show you what they can do and to think differently.
Tools of the trade
Building and sustaining a winning company culture is both an art and a science.
As the saying goes, you can’t improve what you can’t measure. So, in this final section, we’ll share insights about how to go about gauging the effectiveness of your company culture initiatives.
- Metrics: The most common metrics that high-performing businesses focus on analyzing include leadership style and perception, effective company-wide communication, employee wellness, working environment, innovation, and social responsibility.
- Surveys: Use our Company Culture Survey to gain a comprehensive view of the strength of your current company culture and identify areas for immediate and longer-term improvement.
- Tools: There is no such tool to help you build a company culture from scratch. But there are tools that can help you elevate the dream culture you want to build. By enabling continuous feedback, employee recognition and instant communication, Sprynkl - Grove HR's engagement and performance review platform, aims to help you build the culture your teams love.
Get your culture right, and the rest will follow
Tony Hsieh, Founder of Zappos.com, once famously said:
“If you get the culture right, most of the other stuff will just take care of itself.”
Company culture isn’t just some fluffy, feel-good idea invented by HR people.
If you’re a start-up, you need to understand that company culture is something to be nurtured and protected. And as you’re beginning with a relatively clean slate, you have a golden opportunity to start as you mean to go on.
Make no mistake, a great culture won’t happen by accident. But, if you’re intentional about fostering a strong company culture from the outset and place it at the heart of your strategy, you’ll lay a solid foundation on which to build your business’s success.