Defining Company Culture in a Changing World of Work

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Written by Kate Pritchard

Company culture is vital to the success of every organisation. Understanding your culture and ensuring it matches your objectives, values and the needs of your people and customers is therefore crucial.

Before the pandemic many companies were already focusing on changing their cultures. In an evolving world they wanted to ensure that they were more diverse, inclusive, and were able to operate more flexibly and effectively. The overnight switch to remote working caused by COVID has brought additional cultural challenges for businesses.

As we move to a new world of work, how can organisations ensure they have the right culture in place to thrive? To help we’re writing a series of blogs on the subject of company culture. This first article introduces the topic and explains the meaning of key terms, and will be followed by:

What is company culture?

A short definition of culture is “the ways things are done around here”. It is the shared values, attributes and characteristics of an organisation. Culture covers how people behave and the prevailing attitude to managers, colleagues and customers. Defining company culture is therefore vital to success.

Sometimes the reasons for particular behaviours and attitudes will be understood and explicit. However, equally they can be unconscious, reflecting existing biases and experiences. For example, take an organisation where the customer service team is judged solely on the throughput of calls they respond to and the sales team is incentivised on the short-term volume of sales they make. Both of these are likely to lead to a culture where customers are seen as commodities, where there’s no attempt to build long-term customer relationships.

Why is it important in a new working environment?

Company culture can be the difference between organisational success or failure. A poor/toxic culture has been blamed for many corporate scandals, from the VW Dieselgate emissions scandal to allegations of 105 hour working weeks at Goldman Sachs. Equally many highly successful organisations are built on a clear, differentiated and healthy culture…

No wonder that as management guru Peter Drucker famously said, “Culture eats strategy for breakfast.”

Essentially any strategy that fails to take culture into account is likely to fail. Being seen as having a toxic culture impacts reputation and causes talented staff to leave, while putting off new joiners, sp the company loses the skills it needs to succeed. Stagnant cultures mean that companies won’t evolve to meet changing customer needs, risking their survival.

A strong, positive culture helps staff – and businesses – thrive. Employee engagement is higher and people work more productively.

As culture consultant Andrew Cocks points out, “In hybrid working there is much more emphasis about being proactive about culture. You can’t let culture drift. You must use the right behavioural levers otherwise people will do their own thing.”

How is corporate culture created?

Company culture is unique to every organisation and it is shaped by people, processes, history and location. It is much more than the physical environment – you cannot fix a poor culture by offering free lunches and table football.

Management thinker Edgar Schein explained culture through his iceberg model. The tangible results of culture that are seen (artefacts) are much smaller and less important than the unconscious basic assumptions that are invisible when studying culture.

Organisational culture can be formed in two ways. It can be set clearly through the behaviour and strategy of senior leaders and management. They achieve this by explaining and model how they expect things to be done.

Alternatively, if culture is not created from the top it will develop organically in an unplanned way. This will be out of management control, with no link to company objectives.

Ensuring the same culture is enforced across a large, geographically diverse organisation can be hard.

Setting culture is a multi-stage, ongoing process:

Why do companies need to change their cultures post-lockdowns?

Prior to the pandemic three key trends were driving a need for businesses to better understand and change their cultures.

Essentially this all means that employees, consumers and the wider world want to work with businesses that are open, inclusive and customer-centric. Failing to adopt the right culture – and to align everyone with it – risks reputation, sales and the future of the organisation. You will not be able to attract talent to build a successful organisation.

The pandemic has added to the difficulties around cultural change – with staff working from home, cultural ties can be weakened. People’s interactions have moved from the physical to virtual worlds. Nearly half of UK companies believe the pandemic has adversely impacted organisational culture.

Positive employee behaviour is less visible to colleagues who don’t share the same office space. This means they can’t recognise and learn from it, meaning that culture fragments. This is particularly true when it comes to new joiners who may not even have visited the office or met their colleagues and managers face-to-face.

Culture is important. Creating the right culture in the new, hybrid workplace is therefore both a priority and a major challenge. Our next blog will outline the key factors to successfully building culture moving forward.