Five types of company culture you should definitely know aboutBlog / August 2, 2022 / with Christoph Drebes
A company’s success stands and falls with its company culture – at least in the long term. This is the view of many labor market and New Work experts. The pandemic has caused a rethink in the minds of employees and culture is more important than ever before. But what factors matter, and what are the different types of corporate culture? Can a “culture check” already be a deciding factor when hiring new employees?
WHY COMPANY CULTURE IS IMPORTANT
The attitudes and actions of a company and its employees are referred to as its “company culture” or “organizational culture.” It is shaped by the way employees interact with one another, from the values they uphold, and from the decisions they make individually and as a team.
Organizational culture is a trending topic because employees and employers alike are beginning to realize its significance. Interestingly, Culture was one of the main drivers for resignations even before the Great Resignation. This is because bad culture fits result in bringing employees back into the office when they’re hesitant to return, or management and employee expectations misaligning.
Consultant Peter Druker famously said, “Culture eats strategy for breakfast,” which still rings true. According to a study from Harvard Business Review, culture is more important than salary to employees. Additionally, 91% of U.S. managers say that a prospective employee’s culture fit is the same or more important than experience and skills. Without being on the same page mentally and emotionally, employees can feel left out and unwilling to learn and grow within their roles.
Excellent company culture is, therefore, essential for retaining and developing employees.
One of the main reasons for resignations is the company culture
CORPORATE CULTURE AND EMPLOYEE EXPERIENCE
Having a solid company culture isn’t just for employee retention – you want employees to thrive, not just survive. A study from the National Bureau of Economic Research notes that 92% of senior executives believe that improving their corporate culture will lead to a better employee experience and greater value for their organization.
In addition, a good employee experience also benefits employer branding. Employees who are satisfied with their employer will talk about it, not only in private but also on professional online networks like LinkedIn or even on employer rating platforms like Glassdoor.
Unfortunately, only 16% of those polled believe that their culture is where it should be, despite 52% of companies tracking their values using key performance indicators (KPIs). A bad culture, the study adds, can encourage employees to grow distant, check out of their work, act unethically, and even quit.
Consequently, culture doesn’t just mean that employees have access to a nice office, a fruit basket, or a statement on your website stating that you’re all “a family.” Culture is something vivid that shapes attitudes, behaviors, norms, and values. Because employees live in the culture daily, it should be visibly present at all levels of an organization.
EXAMPLES OF GOOD COMPANY CULTURES
Companies with great organizational cultures aren’t hard to come by.
One example is Paychex, which is so committed to having the best culture that they even have 1,200 of their own “culture champions.” These are individuals who propagate and reinforce their culture in every location around the world. Using Mystery Coffee, Paychex reports that they’ve fought the loneliness of remote work by connecting employees, and fostering a mutual urge to build a company with a strong culture.
Another company intent on building an inclusive culture is United States-based supermarket Publix. With “Idea Spots,” employees at any level are able to submit ideas that are then reviewed by subject matter experts and assessed for viability. This ensures that all employees feel they have a say in the company’s future, no matter how small their role is.
Lastly, Experian, which has a top-ranked company culture, is focused on company culture building despite pandemic isolation. In addition to their other employee resource groups, one Experian employee began a group called “Home Aloners” for remote workers who need connection. By meeting on Teams once a week to exchange pictures and stories, workers continue to feel connected despite their physical distance.
THE FOUR ATTRIBUTES OF COMPANY CULTURE
If you’re starting to rethink your approach to company culture, don’t worry – there are a few ways to learn about and develop this facet of your organization. Your first step is ensuring your culture is alive and well. Experts from the Harvard Business Review identified four key attributes of every strong company culture: the culture is shared, pervasive, enduring, and implicit.
Shared culture means that the values system isn’t just among one worker or one team. Culture is a group phenomenon spread across the entire company, no matter how big or small your firm is. The result is a positive kind of group behavior, one that everyone willingly and enthusiastically participates in.
Next, a pervasive culture is everywhere, on multiple levels. It’s utilized in every situation, even in the most casual of watercooler chats. This pervasive attitude impacts motivations and assumptions, creating a feedback loop. Eventually, one’s mindset aligns with the culture in an unconscious way, and it flows into every artery and vein of your organization’s body.
Company culture also needs to endure, no matter what roadblocks you might hit. Despite an employee’s many projects or potential turnover in their team or management, the culture holds steadfast. The Harvard Business Review recommends that to keep culture going, HR professionals need to lean into the “attraction-selection-attrition model.” This means that typically, individuals are attracted to organizations that align with their own personal values – and if you maintain those values, you’ll keep those employees.
Lastly, culture goes without saying. It acts as a sort of “silent language” that grows through evolution as the employee lifecycle progresses. While workshops and retreats on culture might feel productive, ultimately, they’re more about telling and not showing. Ideally, an implicit culture doesn’t need to be taught or explained. It’s just executed through continued collaboration and communication.
Four key attributes for a strong company culture
FIVE TYPES OF ORGANIZATIONAL CULTURE
While every company culture should maintain the four attributes that represent their company’s values, they play out in different ways. After you’ve identified the existence and strength of your culture, you’ll start to be able to see patterns and characteristics emerge. There are five main types of organizational cultures, and chances are, your company matches one of these archetypes.
Customer-first culture is common in customer-facing businesses, for example, retail, food and beverage, and customer service. It emphasizes customer experience (CX), meaning that employees are usually friendly, flexible, personable, and responsive. Additionally, these cultures are feedback-heavy, as both customers and employees are constantly looking to improve the company’s functions. Data and analytics are constantly tracked and analyzed in these cultures, creating constant forward motion.
A hierarchy culture is one that’s common in large companies or older companies, as it corresponds to a very traditional corporate model. Here, there’s a formal structure with a strict chain of command. In a strongly hierarchical culture, there is limited contact between the upper and lower levels, sometimes creating information siloes. There are clear rules and policies, and “rocking the boat” isn’t encouraged. While these cultures take fewer risks, their growth is slow and methodical. That means that coordination, organization, and clarity are all characteristics of the ideal hierarchy culture employee.
Commonly found in finance or public relations, market culture is the most aggressive of all corporate cultures. These companies are driven by targets, deadlines, results, and output. While employees will find these cultures to be stable, they can border on rigid. However, market culture functions as a well-oiled machine, and staff performance is closely monitored to make sure everyone is keeping up.
Adhocracy culture, a sort of “hustle culture” popular with startups and tech companies, integrates the speed of market culture and the friendliness of customer-first culture. They’re flexible, entrepreneurial, and initiative-driven and typically function with loose structures (meaning the chains of command are more fluid). Whether they’re changing the world or pivoting on a project, innovation is a priority in adhocracy, and employees are expected to learn from changes quickly.
Lastly, clan or collaborative cultures are all about the family, as they’re most often found in family-run businesses or companies with less than 50 people. Unlike market culture, which can typically be outward-facing (consistently competing with industry standards), clam cultures are inward-focused. They’re less about competition or markets and more about employees’ interpersonal relationships. Communication and collaboration are the more important parts of these cultures, and while success is welcomed, they’re not constantly fighting to get to the top.
The different types of organizational culture
KEY TAKEAWAYS FOR HR PROFESSIONALS
It’s important to know the main facets of any good company culture and the types of cultures there are. But the most important thing to know about culture is that it starts with hiring. Choosing those whose mindsets and values fit into your company will turn any organization into an organically functioning whole. This is called hiring for a “culture fit,” meaning that someone will feel comfortable in your office environment.
Not everyone fits into every company culture. Some people prefer hierarchies, others prefer less structure. Some are more comfortable in a competitive environment, others prefer a more relaxed atmosphere. Hiring for culture fit requires putting the right puzzle piece, the employee, in with the right puzzle, the company. And in order to ensure the best outcome possible, there are a few things to keep in mind.
HIRE FOR CULTURE FIT
If you’re hiring for culture fit, hire actively and choose carefully. Don’t just choose a passive candidate with the most agreeable interview, even if their resume has all the right keywords. Include questions in the interview process that test for culture fit. If you can, find someone special to fill the role, as the perfect fit is out there somewhere (even if it takes a little more energy to look for them).
KEEP SOFT SKILLS IN MIND
Soft skills are of the utmost importance when you’re hiring for culture fit. Unfortunately, only 40% of employers do any skills test regarding soft skills, even if it’s just an exercise with their prospective teammates. Invest in creating a screening method for soft skills that fit well with your culture and the team the new person will be part of.
LOOK INTERNALLY FIRST
Finally, don’t look outside your organization for new talent before you look to other resources. When employees see that internal development is possible, they’ll stay longer and promote culture up the ladder. Networking tools like Mystery Coffee can help your HR team to connect with various internal talents from different departments. In this way, they will get a better overview of potential talents.
During the application process, Mystery Minds is always checking the company fit.
That’s the reason the culture today is very strong and positive
WHEN WAS THE LAST TIME YOU CHECKED ON YOUR CULTURE?
Culture is the lifeblood of your organization. Studies show that it influences productivity, profitability, creativity, and growth rates. Without a thriving culture, employee retention will be low and new talent won’t want to sign on. And to properly assess that your culture is exactly in line with the values system of your company, utilize the above tools and tips.
- Make sure that your culture is solid by ensuring that the four elements of culture are present: it should be shared, pervasive, enduring, and implicit.
- After you’re sure that your culture is steadfast and strong, you also need to identify what type of culture you have: customer-first, hierarchical, market, adhocracy, or clan.
- To perpetuate the culture you have or pivot to create a healthier more employee-friendly culture, do the following: hire for culture fit, screen for soft skills, and look internally for talent.
It’s not hard to use these tips to evaluate and tweak your hiring practices to address and refine collaboration and connection. With just a little time and energy towards bettering your organizational culture, you’ll be one step closer to creating a workplace that employees will want to stay in for years to come.
About the author:
Christoph is an entrepreneur from Munich and co-founded Mystery Minds in 2016. Mystery Minds' mission is to make the world of work more human by creating meaningful, personal connections between colleagues. The remote-only team already works with over 250 international companies, helping them to strengthen internal networks and overcome silo mentalities.
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