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Company Culture Explained

What Is Company Culture?

Company culture is defined as a “a pattern of shared basic assumptions learned by a group.” These learnings occur over time, and end up guiding behaviour in ways that go beyond the explicit norms dictated in an employee handbook.

Why Corporate Culture Matters

Culture has huge impacts on everything from employee retention to innovation. Each year, businesses spend billions globally on improving their corporate culture, in an attempt to attract the best talent, and keep them operating at peak performance.

Healthy cultures are ones where people feel valued, which in turn fosters engagement and productivity. Similarly, the best cultures foster innovation, through collaboration and non-judgement.

Some other benefits of a robust culture include:

Companionship

The best corporate cultures often enable meaningful relationships between employees. In turn, employees are better equipped to collaboratee and communicate across disciplines.

Conflict Resolution

Robust cultures have clear ways of resolving conflict in ways that leave all parties feeling heard. Often, companies who aren’t able to resolve conflict end up avoiding contentious issues, leading which can accumulate, forming “culture debt.”

Employee Advocacy

When employees enjoy working at your company, they are likely to invite their friends to join them. Regardless of industry, these referrals have the potential to be each company’s largest, most-consistent source of high-calibre talent.

What To Look For In A Business Culture

Extensive research on company culture has revealled that high performing teams come in many shapes and sizes. Some are incredibly direct, while others are rather gentle in their communication. Some incredibly collaborative, while others thrive on competition. Some are social outside of working hours, but just as many don’t spend time together outside of their routine 9 to 5.

However, there are a few factors that are ubiquitous across high performing teams:

Psychological Safety

That is, the feeling that when one shares an idea, it will be heard and valued, without judgement. Over and over again, research has found that when people, not ideas, are criticized, it chills innovation, and limits creative thought.

Problems with psychological safety often emerge from two environments. The first is those companies that have intense hierarchy. In these settings, it is often common to denigrate or dismiss the ideas of those whom are the least-credentialled at the table. Perversely, when these junior employees eventually move up the ladder, it is more common for them to uphold this cycle, limiting psychological safety, than it is for them to rebel against the norm that had previously limited their contributions.

The second setting is those teams that prioritize efficiency above all else. While well-meaning, if teams aren’t comfortable humoring ideas which don’t have immediate, obvious value, the end result is that contributions tend to chill across the team. One way to combat this, without indulging in regularly long meetings, is to build separate processes that make space for less well-developed or complete dialogue.

Everyone Participating In Meetings

It might sound simple, but research has consistently revealed that active participation from all members regularly results in higher performing teams. Beyond reflecting high psychological safety, the reality is that humans are prone to feel more invested in a project (or group of people) if they feel they have contributed to its vision and direction.

Strong Vs. Weak Company Cultures

People often confuse the notion of having a “strong” culture with having a good culture. In reality, strong cultures aren’t necessarily better or worse than weak cultures, just different.

Strong cultures are those where the collective has clearly defined ways of thinking / approaching situations. This leads to high consistency, and often high efficiency, when teams are solving problems. However, on the flip side, these cultures also run the risk of not adapting / changing as old behaviours become out of date.

Weak cultures, on the other hand, are those defined by placing an emphasis on individual decision making. This often can lead to less cohesion across organizations, but tends to improve the ability of an organization to quickly respond to changes in their environment, and to include diverse perspectives.

Looking back across history, one in both wonderful and tragic organizations. For example, Ray Dalio’s Bridgewater Associates represents and incredibly successful strong-cultured organization. There, colleagues are encouraged to leverage a list of explicit principles in their decision making. On the flip side, most cults have acted as strong cultured organizations, often demanding odd rituals from members as a way of subverting their autonomy.

How To Understand Company Culture

It can be incredibly difficult to get a sense of a company’s culture prior to spending time within it. Often, anonymous reviews are too polarized to provide a reliable picture of culture. Instead, our team here at peersight believes that job seekers are best off listening to the stories of current employees. Where have they been? What do the care about? What excites them?

If you’re hoping to go even deeper, consider asking your interviewer (or current colleagues) questions about each of the six domains of company culture, listed below.

People

Hands down, people are the most crucial part of a culture, because people create the culture.

As a job seeker, you’ll want to get a sense of how employees talk about their colleagues. Do they speak positively? What do they celebrate? Almost without a doubt you will begin to see certain attributes pop up again and again. These are, mostly likely, the attributes which will most heavily influence the company’s perspective of you as a colleague. If each person you talk to is praising their team members for being “driven and assertive,” but you struggle to push for your perspectives in a heated exchange, seriously consider whether this is a setting that you’ll thrive in.

A second important factor with a company’s people are their interpersonal skills. Spending time observing individuals interact via culture videos can help greatly with this.

Questions you might ask here include:

Values

This is perhaps the second most important part of a culture, as values directly translate to the way decisions are made.

As a job seeker, take the time to meaningfully consider if you can get excited about a company’s values. Ask for clarification on those you don’t understand, and push your interviewer(s) to share examples of when these values have been used to make a decision - either in their own work or at the higher-level of the company's trajectory. The best values don’t just live on a poster, but have been proven in the context of the business.

Questions you might ask here include:

Vision

What is the end goal of the project, which everyone is working towards?

Ideally, you’ll have the chance to ask employees this question, and will hear the same answer each time. If not, it might hint that the company isn’t aligned across departments, or is generally unclear about where they’re heading.

Also pay attention to the specificity of the vision statement. Does it actually mean something? If not, the company may be exercising pragmatism by not committing themselves to a single trajectory. It’s up to you to decide if you’re comfortable with this.

Questions you might ask here include:

Narrative

Narrative is the historical counterpart to vision. Specifically, a companies narrative consists of the stories told about “how we got here” and “what we learned along the way.” Much of a company’s culture is formed in response to the adversity it has overcome, so understanding a company’s narrative can provide crucial context in understanding why people might value certain things, or accept certain norms.

Narrative is especially important for new recruits who are eager to change certain elements of a culture. While it certainly is true that the best cultures are dynamic, it’s important to spend time getting acquainted with a company’s narrative before looking to change the systems and beliefs that are in place. If one doesn’t take the appropriate time studying the corporate history books, one risks ignoring crucial perspectives or trade-offs that were considered when a decision was initially made.

Questions you might ask here include:

Place

The places people work in have a huge impact on how they work. 1970’s style cubicle mazes might have been a great way to minimize distractions, but they also left workers distinctly isolated. On the flip side, start-up style open concept offices stocked with snacks and activities are likely to foster socializing and community post-work hours.

Here again, there isn’t a “right place” so much as a “right place for you.” If an office looks to be stocked with everything one needs to survive, there’s a non-zero chance that employees are expected to spend hours beyond 9-5 at work. While some enjoy this work-life integration, you might instead prefer clear boundaries between work and life.

Questions you might ask here include:

How Culture Change Happens

Step 1: Spend time intentionally getting to know a culture.

Ask questions about vision, narrative, place, and values. It might be the case that much of the changes you would suggest have been considered before.

Step 2: Connect the change you’re proposing to higher-level values.

In order to develop buy-in, you’ll want to be able to frame your suggestion in terms of what each department, and the company as a whole, cares about.

Step 3: Build alignment with key decision makers.

You don’t need to get buy-in from every person in a room to eventually achieve consensus. Instead, you need to get buy-in from the key decision makers representing each of the major perspectives at the table. This might be those people representing different departments, products, or more broadly philosophies.

Step 4: Consider who should surface the idea.

In order to develop buy-in, you’ll want to be able to frame your suggestion in terms of what each department, and the company as a whole, cares about.

Step 5: Build process to reinforce the change.

Regardless of how much buy-in is initially present, changing behaviour is hard. As such, developing systems to immediately and regularly reward the change in behaviour is a crucial part of ensuring cultural shifts persist.

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