Organisational culture has many facets: it is a reflection of company identity, values, and purpose. Culture is also a powerful guiding force, functioning like a code of conduct that enables desired behaviours and performance.
Culture works hand in hand with strategy: “Culture provides the greatest source of competitive advantage,” Bain and Company says. A strong, well-developed culture is unique to a company and cannot simply be duplicated by another.
So whose job is it to own and develop organisational culture?
The role of building culture is very much tied to what culture is meant to achieve.
“Culture is a means to an end, not an end in itself,” Bain and Company says in Building a Winning Culture. Culture plays a key role in an organisation fulfilling its purpose, achieving growth, and enabling high performance.
The indispensable role of culture
Culture drives innovation
A safe environment, created by a culture of trust, empowers teams to take risks, innovate, and try new approaches.
Culture enables performance
With the influence culture has on employee behaviours and attitudes, culture has direct impact on performance, engagement, innovation, agility, and the ability of an organisation to learn, grow, and adapt.
Culture attracts and retains talent
Today’s workforce values culture more than ever before. “A great culture can be really attractive for talent...A negative culture, however, will push away the great people in your organization,” SME Strategy says in How Strategy and Culture Affect Employee Retention.
LinkedIn Workplace Culture Trends: The Key to Top Talent in 2018 found that “70% of professionals in the U.S. today would not work at a leading company if it meant they had to tolerate a bad workplace culture. So much so, that people would rather put up with lower pay (65%) and forego a fancy title (26%) than deal with a bad workplace environment.”
Culture influences actions and decisions in a company. It is not a by-product but rather a deliberate and strategic undertaking.
As Lou Gerstner, the former chairman of IBM put it: “Culture isn’t just one aspect of the game—it is the game.”
Today, more so than ever before, culture is critical in facing business challenges and weathering change.
How culture is built
The role of leadership
The CEO and senior management are the main drivers of culture.
“The CEO is the most visible leader in a company. His or her direct engagement in all facets of the company’s culture can make an enormous difference, not just in how people feel about the company, but in how they perform,” Strategy-Business.com says in Culture and the Chief Executive.
In start-ups and new organisations, the CEO defines the culture and values. The values originate from who they are. “Often the values of the founder are instilled in the organization and shape its culture going forward,” Bain and Company says.
“Leadership has the responsibility, starting at the top, to determine what the company culture is, and should be, and then to shape it through their everyday actions,” BSCI21 says in Whose Responsibility is Culture Anyway?
Transformational leaders know the power of culture and see themselves as stewards of culture. “CEO Jack Ma believes that Alibaba’s culture is his job. And he is not alone. Great business leaders throughout history – such as Tom Watson, Sam Walton, and Herb Kelleher – have argued that the cultural buck stops with them,” says Forbes in, Corporate Culture—Whose Job Is It?
There are times when culture needs to shift. Culture change often starts with the CEO because it is in response to a high-level business issue, or in pursuit of a vision. Microsoft’s Satya Nadella and Uber’s Dara Khosrowshahi both embarked on culture change for their respective companies because it was badly needed for survival and ensuring a future of growth.
Satya Nadella, CEO of Microsoft, was described as “leading one of the largest and most public corporate culture change efforts we’ve seen in recent times,” says Chief Executive in It’s Time to Take Culture Seriously. Nadella transformed Microsoft “from what he calls 'a know-it-all culture' to a 'learn-it-all culture.'"
“Nadella’s relentless focus on rediscovering Microsoft’s soul and reshaping its culture is deeply personal, but it’s also a strategic bet on helping Microsoft regain its “market dominance. Since he took over, Microsoft’s stock has been on a steadily rising trajectory,” Chief Executive notes.
As for Uber, “Arguably the most pressing task Khosrowshahi faced was reshaping the company culture and abolishing Kalanick's anything-goes, growth-at-all-costs ethos. He said Uber has made ‘enormous strides’ when it comes to its attitude towards dealing with regulators, for example,” CNN says, in Uber’s CEO One Year In: The One Thing I Wish I had Fixed Sooner.
“Early on in his tenure, Khosrowshahi revamped the company's cultural norms, ditching attitudes like ‘Always Be Hustlin’ and ‘Superpumped’ in favor of things like ‘Customer Obsessed’ and ‘We Do The Right Thing.’”
The role of HR
“A strong HR team partners with leadership to develop a vision for culture that can grow and change over time, and a strategy that all leaders can act on to achieve the desired outcomes,” BSCI21 says.
HR plays a key role in the implementation of culture. “As the HR manager, you have two roles to play here. The first is as the advocate for the kind of company culture your employees seek,” HR Topics.com says in HR and Company Culture: The Role HR Management Plays. The second is as the supporter and implementer of your company’s goals.”
“Gallup has been studying organizational culture for decades. Our analytics show that in the world's highest performing organizations, HR leaders play a central role in creating and sustaining the culture their organization aspires to have,” Gallup says in Why HR Leaders are Vital for Culture Change.
“As the stewards and keepers of the culture, HR leaders are responsible for inspiring desired employee behaviors and beliefs—and in turn, realizing the performance gains of a thriving culture.”
The role of staff
It’s not just senior management and HR leadership that make culture building and culture change work. There needs to be a drive coming from the people as well. “Driving change too much from the top can actually be highly counterproductive,” Bain and Company says.
“Engaging workers on an individual basis is important because organizational culture is the sum of all employee behaviors,” Bain and Company says. “That is, organizational culture is not created in a leadership off-site on strategic planning. Instead, organizational culture is made up of the mindsets, beliefs, and behaviors of employees throughout the organization who have to implement that strategy on a daily basis.”
“Leadership is often tasked with modeling company culture. While it is important for executives and management to practice the company values, it’s imperative that all staff promote an organization’s culture,” is a sentiment we hear from Emergenetics in Company Culture Needs to be Part of Everyone’s Job.
Culture should not rest on one person alone. “One person can rarely create and sustain organizational change that is truly transformational,” Forbes says in Not-So-Simple Secrets of Successful Culture Change. It takes dialogue that creates a spark in people to step up and do something differently themselves. Engaging everyone in not only having a voice but having a responsibility to drive small change at their level helps build the momentum and sustainability of what could be.”
Culture should be owned by the entire organisation, with everyone participating as culture builders.
“There are 3 culture personas,” our CE Rachel Ong elaborates. “Culture observers, culture commentators, and culture builders. We believe every person in the organisation is empowered to actively build culture, to go beyond being mere observers who operate at a distance, and culture commentators who bring valuable perspectives but are not fully engaged in the action.”
At ROHEI, culture began with a value system. Through regular communication and mentoring of staff, the values became guiding principles for all of us in our day-to-day service of our clients and interaction with one another.
Values are the heart of our culture, guiding us in our decisions and actions. They shape the unique service we provide to our clients—authentic, relational, and with great attention to details and unspoken needs.
Leadership models the values and entrusts the staff with culture building—actively practising what we believe in.
Culture-building is an organisation-wide initiative
Leadership, HR, and staff all play the role of culture builders, proactive participants in championing company culture.
CEOs and senior management take the lead. HR supports leadership and helps implement culture through policies and practices. And staff champion culture by walking the talk.
Like many organisational efforts, culture can only be successfully built by the team going all-in and trusting each other to play their part.