When we think about corporate culture, we think about a “cool” factor that sets a company apart as a unique and special workplace. Corporate culture is the values and beliefs on which the organization performs its activities.
A strong corporate culture is supported by intuitive and social science. According to James L. Heskett, culture “can account for 20-30% of the differential in corporate performance when compared with ‘culturally unremarkable’ competitors.”
But what makes a culture? Each culture is unique, and myriad factors go into creating one, but there are four common components of great cultures. Isolating those elements can be the first step to building a differentiated culture and a lasting organization.
- Vision: Vision or mission is simple statements that provide a purpose to the organization. That purpose, in turn, orients every decision employees make. When they are deeply authentic and prominently displayed, good vision statements can even help orient customers, suppliers, and other stakeholders. Nonprofits often excel at having compelling, simple vision statements. A vision statement is a simple but foundation element of culture.
- Value: A company’s values are the core of its culture. While a vision articulates a company’s purpose, values offer a set of guidelines on the behaviors and mindsets needed to achieve that vision. Many companies find their values revolve around a few simple topics (employees, clients, professionalism, etc.), the originality of those values is less important than their authenticity.
- Practice: Of course, values are of little importance unless they are enshrined in a company’s practices. If an organization professes, “people are our greatest asset,” it should also be ready to invest in people in visible ways.And it follows through in its company practices; it must encourage more junior team members to dissent in discussions without fear or negative repercussions. And whatever an organization’s values, they must be reinforced in review criteria and promotion policies, and baked into the operating principles of daily life in the firm.
- People: No company can build a coherent culture without people who either share its core values or possess the willingness and ability to embrace those values. That’s why the greatest firms in the world also have some of the most stringent recruiting policies. People stick with cultures they like, and bringing on the right “culture carriers” reinforces the culture an organization already has.
There are other factors that influence culture. But these components can provide a firm foundation for shaping a new organization’s culture. And identifying and understanding them more fully in an existing organization can be the first step to revitalizing or reshaping culture in a company looking for change.