A culture defines the normal way people behave in a particular group. It provides the cues, boundaries, guidelines and encouragement that help individual members of a group know what is right and what is wrong. Culture guides decisions that result in actions. The best way to understand a culture is to pay attention to actual behavior and study evidence created by the people of a particular group. It’s also great to compare groups in order to discover similarities and differences in their cultures, which is what the field of Anthropology is all about.
In the context of a company, I often hear people say things like, “We have a winning culture here,” or “We’re building a culture of innovation,” or “Our culture is defined by our values,” etc. These could all be true statements, but they are not very useful as descriptions of their particular cultures.
To describe a culture you need to identify specific, notable ways that people interact and find evidence that these ways are useful by the members of that particular group. If a company has a culture of innovation, we should be able to observe characteristics and behaviors by the people there that result in innovative outcomes. We should find artifacts of that behavior that are cherished and celebrated as the great examples of what the call innovation.
If the culture is strong there should be stories about how a certain leader did something unusual or even strange to other companies that resulted in a great outcome. This is why “founder stories” are so important to young companies. They describe the key insight or heroic behavior of the people who start a company and allow others to act in similar ways to get similar outcomes… resulting in a consistent pattern of behavior (culture!).
There is no “best” culture
I’ve had the great privilege of working in some of the world’s most innovative companies (as defined by Fast Company magazine) including IDEO, Charles Schwab, Levi Strauss, and Hulu. One thing I can say about all of them is that leaders there believe their cultures are a significant reason for their success. Another thing I can say, having been up close and personal in all of them, is that they are each distinctly different from the others. So while they may all have “winning” or “innovative” cultures, there is not a common culture across them. Behaving one way at Levi Strauss could actually get you fired at Hulu and vice-versa.
To understand what is innovative at IDEO, you just have to listen to the stories they tell each other about great moments in the company’s history. In fact, so many people ask IDEO about their culture, nearly any person who works there can point to examples of their innovative behavior that resulted in breakthrough product designs like the first Apple mouse or the Crest Neat Squeeze toothpaste tube.
What every leader should know about culture is that it has to be defined, built and actively managed if you want it to help your business succeed. In most cases, culture should be defined in response to a business problem, not in advance of one. I don’t believe there’s such a thing as “the best” culture that could be built first and then applied to any business problem. So just like a supply chain for making shoes would be different than a supply chain for making cars, each culture should be constructed to address the unique challenges of the business at hand.
Culture is not a statement of ideals
Culture should not necessarily be a reflection of the founder, CEO or executive team—although leaders must behave in accordance with the culture or it is unlikely that others will follow. Lip service to a value like customer service, followed by actions that don’t treat customers well will not build a customer-centered culture. All of the advertising dollars in the world will not make airline customers feel treated with respect if they are dumped from flights for unexplained reasons even if there’s a video of the CEO pronouncing that he personally cares for every customer who flies with them. A founder is often an architect of the cultural blueprint, but cultures are dynamic and change over time. What worked for the original 20 team members may not scale and should be adjusted to the demands of the business over time. Retain the essence but refine the whole.
Culture is not simply a values statement or a manifesto. Culture is a capability that provides direction and support to every member of an organization in order to achieve a strategic objective. Great leaders understand that culture should be carefully managed to achieve their organization’s full potential.