What is Company Culture?
Company culture is a bit of an abstract concept; many think they understand it, but few can define it or explain how their culture was developed and maintained. What is company culture and how important is it to get right?
Let’s start with a definition of company culture. I’ve had a look at a few definitions online, and I think the one from Indeed is probably as good as any other I’ve seen:
‘Corporate Culture is an organisation’s values, ethics, vision, behaviours, and work environment. It’s what makes each company unique, and it impacts everything from public image to employee engagement……..Companies with good corporate culture often have a high workplace morale, and highly engaged, productive staff’
I like this definition of company culture: It seems logical, straightforward, and concise. The problem is, I’m not convinced that many companies define their culture this way. Moreover, don’t all companies (especially their leaders) purport to have a ‘good corporate culture’?
The problem with misunderstanding your culture
It seems logical that business founders will be responsible for establishing a company culture and defining what that culture should be. This culture is typically based on the company founders’ own personal values, vision, and their preferred working environment - and that culture will be imparted to the next member of staff, then the next, then the next … this seems like a logical strategy – but this is where many businesses start to struggle.
When a company culture is defined this way, the first few members of staff all end up being just like the company founder(s) – they may all share the same personal values, vision and work environment preferences. This all sounds great, and the recipe for a productive work environment – but when you start to dig a little deeper, is the best recruitment policy to employ people that the founders would enjoy having a beer with?
A fairly common example: ‘we have a great company culture…we all go out for a beer after work on a Friday!’ But does this really mean the company has a great culture? Who says? Does it also mean that those people who can’t/don’t want to join the Friday beer club, won’t be model employees, who fully buy in to the business’ values and goals?
Although the beer example might be quite extreme, the point is that the ‘pint after work’ definition of good company culture does, in my opinion, nothing for the long-term success of the business.
As a business increases its revenue, inevitably, more staff are required to meet demands; new staff with new skill sets to be brought in and new processes are to be implemented to streamline operations. This requires recruiting a very different set of individuals, with different personalities and unique personal aspirations.
A badly-defined company culture leaves the hiring manager asking all the wrong questions in interviews: is this person going to get on well with the rest of the team? Do I have anything in common with them? Are they like me? Will they be a good cultural fit (will they fancy a beer on Friday after work)? Now this is where mistakes are made by some:
It’s not so much unconscious bias on the part of the hiring manager, as it is them genuinely believing this person doesn’t represent a cultural fit with the company. The issue is, the very cultural fit against which the candidate is being measured, has been defined in the wrong way!
This means that the hiring manager, all through wanting to perpetuate a poorly- defined company culture, is potentially missing out on the best person/people for the vacancies.
The above ‘Friday beer’ example was only provided to illustrate a point; there are so many other examples of badly defined company culture that are far more common, and often detrimental. And it’s not always driven by the founders’ own personal values, vision and preferred work environment - it’s often erroneously defined by other ways. For example, wanting to present a culture that the company thinks that staff and prospective hires will want… but the reality is far different from the concept.
This ‘unlimited holidays’ policy, with staff expected to work until 10pm, and only when targets are hit. Having break-out areas, cool, edgy office furniture, and free snacks - the whole ‘work hard/play hard culture’, often translating to staff having to work 60 hours a week to be rewarded with a free Dominos at the end of the month, doesn’t feel like a great culture.
Of course, I’m not suggesting that every company that has these policies and perceived benefits in place are disingenuous - far from it! But it does happen far too often that staff are misinformed about the role, and that many hiring managers are assessing cultural fit by asking internal questions such as ‘if we mention all of these great things we do, will this candidate work 10-hour days and weekends when we need them to?’
Okay, so if many growing businesses are struggling to effectively define their culture, we need to know how best to do it before we can start to hire for cultural fit – how can this be done? That probably requires a full blog in itself, but I have listed below some examples before we get into some ways you can hire for cultural fit.
How to develop and define a company culture
Step 1 - Establish an organisational values framework
Nowadays, it’s becoming more and more important to develop an organisational values model. Company values are the core set of beliefs that a company has and gives all staff the opportunity to get behind the same goals. Some examples of company values include the following:
- Openness
- Transparency
- Accountability
- Creativity
When developing company values, take plenty of time to get it right; it’s pivotal and will underpin everything from hiring to strategy, process to profits. Brainstorm with your team, involve as many stakeholders as possible. Include staff, shareholder, customers, and suppliers – what are the traits we have as a business that we want to keep, what do we want to eliminate and what do we want to do that we don’t currently? Having a core set of company values sets in place will help to shape the company mission and vision.
Step 2 – implement a mission statement and document your vision
If you don’t have one already, implement a company mission statement, and a written vision that is communicated to all staff. It’s something that everybody can get behind if it’s done properly. Alongside values, it forms the foundation of company culture. Although it’s a decision for company owners and leaders, it’s hugely important that collaboration with staff occurs to build this mission statement so everybody is bought in from the outset. The mission statement should encapsulate the business vision and why the business exists; it’s crucial. Additionally, Mission-driven workers are 54 percent more likely to stay at the company for 5 years.
A crucial step in building your new culture is to assess against your newly developed values. Carry out anonymous staff surveys to see how your current staff feel you’re performing against values. If, for example, once of your values is “we are open”, anonymously survey your staff to see if they believe the business is as open as it can be; ask open-ended questions to find out where the company is performing well, and not so well, and look to provide interventions based on areas of perceived weakness.
Step 3 - assess against your new values and mission
360 feedback assessments are also a crucial way of seeing how aligned an individual (particularly a manager – as they’re often responsible for employee dissatisfaction) is aligned to the organisational values, and its culture. Structure a 360 assessment around organisational key values and competencies and have their managers, direct reports, peers, other colleagues and even customers rate the individual against these competencies and values. This is a fantastic way of being able to highlight how aligned, or misaligned an individual is to the values and culture of a company, and gives an individual the opportunity to receive constructive and honest feedback from people they work with.
By incorporating these tools into your internal processes, it gives each member of staff the opportunity to feed back and contribute to the cultural shape of the business, whilst at the same time giving ownership of individuals’ personal and professional journey. For the business, it hugely helps to shape the internal culture, ensuring that all members of staff know exactly what the culture is, how it’s been developed and how it should be upheld.
Step 4 - foster the culture
Once the above steps have been carried out, the management can start to foster the organisational culture. This will not happen overnight but done properly it can work wonders for businesses. It is the responsibility of, initially, the leadership team and subsequently the entire staff base to maintain a positive company culture, based on the values and mission. And it’s incredibly important for the culture to be inclusive for all.
If one of the values that is developed is 'team spirit' - don’t just put a pool table in the office: look to reward the entire team when things go well – organise team days that are inclusive to all. In addition to the pub Fridays, offer a suitable alternative to those staff that are unable to join – use some imagination and creativity!
For businesses that have ‘integrity’ as a core value, make sure you’re as ethical, fair, and honest with your staff as you are with your customers: update them on company financials, future plans and your expectations of them.
If a core value is ‘quality’, ensure that staff receive the same quality from the company that they’re expected to deliver to the clients – quality equipment, work environment, training programmes and personal feedback.
The list is endless, but you can probably see how having a robust core set of values in place, should impact all your stakeholders in the same way – it builds consistency and supports in building an incredible organisational culture.
The last thing to consider is how to hire for cultural fit.
Step 5 (final step) – hiring for cultural fit
This question, of course, is a full topic in itself. We know the importance of hiring for cultural fit, and it’s as important for the candidate as it is for the hiring company. There are several ways that cultural fit can be hired for, but it’s truly best to do this once you’re highly confident that you have gone through a thorough and robust process to develop and define your company culture.
The majority of what needs to be done in hiring for cultural fit is to ascertain whether the individual’s values align to those of the company – and remember, that’s their beliefs, vision, and preferred working environment.
It’s generally considered good practice, once a company has established a values model, to then create a core set of competencies (competency framework) and associated behavioural indicators (actions or behaviours that exemplify the competency in practice). This will provide a framework in how to assess somebody’s cultural fit during the application process. Additionally, a series of Realistic Job Previews (also in the list below) will help candidate’s gain a realistic gauge of life within the organisation – transparency is always key!
Cultural fit interview questions
In interviews, start with describing the role and the company environment generally. Ask candidates examples of times in the past that they performed tasks or behaved in ways that are aligned to your values, core competencies and behavioural indicators.
For example, let’s say you’re interviewing a candidate against the core competency of ‘communication’ – the behavioural indicator for ‘communication’ may be ‘have the ability to receive feedback from others and learn from this feedback’. Ask candidates for examples when they have received feedback in the past and what was done from this feedback.
As you can probably see, these types of questions start to profile how the candidate has behaved in the past, and how they are likely to behave in the future. This question may ultimately step from the core organisational value of ‘transparency’ or ‘integrity’. By asking these types of questions, you can start to ascertain how aligned to your culture the prospective employee is.
Accurate job descriptions
Unfortunately, many job descriptions are a little ‘best-case scenario’ and often fairly unrealistic. This certainly does not provide a RJP to job applicants and does little to demonstrate the culture of the company. Make sure that, when creating job descriptions, it is done so by ensuring that the day-to-day responsibilities are an accurate reflection of the reality of the role. Furthermore, the ‘About us’ part of any job description should be information not just about what the company does, but how it does it and why it does it; steeped in organisational values – it’s a great opportunity to be demonstrating your company culture. If you’re a creative bunch, get creative with your job adverts/descriptions, if you’re fun, be fun! It’s hugely important and a very easy way of communicating the company values and culture.
Employee testimonials/day-in-the-life videos
Who better to get a flavour of an organisation and its culture than an existing staff member? By getting existing employees to create testimonials and day-in-the life videos, they will be able to document what it’s like working for your organisation on a day-to-day basis. This includes the good, the bad and the ugly. Show these videos and testimonials to prospective applicants alongside job descriptions and before they apply, which will help to provide that final rubber stamp of approval that they are certain this is the role for them!
Situational Judgment Tests
Situational Judgement Tests (SJTs) are a type of psychometric assessment that look to gauge a candidate’s behavioural fit to a particular role. They do this by presenting the candidate with a series of role-specific scenarios and ask them to choose their most and least likely courses of action from three/four options. It’s a great way to let the recruitment team know if a candidate is likely to fit in with the organisation on a behavioural level.
However, that’s not all they do: SJTs are designed to be bespoke and specific for each role/organisation, meaning that you can provide, within the scenarios, a Realistic Job Preview to candidates. This means that the company culture can be communicated to candidates through the scenarios within the assessment – it’s a beautiful two-pronged approach to ascertaining cultural fit: for both the hiring manager and the candidate and should certainly be considered as a RJP tool to gauge cultural fit.
In summary
Company culture is absolutely paramount and is pivotal to the success of a company. Making sure that your business has a culture to be proud of will not help you get the most from your current staff base and ensure that you recruit those that align with your organisation – and who feel your organisation aligns with them!
