Company culture is an often-discussed — and often misunderstood — topic within the workplace: 82% of employees believe that “culture is a potential competitive advantage,” whereas only 28% believe they understand their culture well. What is company culture, exactly? For a topic deemed so important, there is still a lot of confusion about what culture is.
Before you dive into any planning efforts to strengthen your culture, take a step back and ask yourself: What is company culture? It’s essential that you and any stakeholders are working with the same definition. After all, you can’t truly influence your company’s culture in any way if you can’t define it.
Read on for Lesson 1 in our Culture Crash Course, to learn what exactly culture means. For a broader understanding of culture, check out the rest of our Crash Courses:
- Lesson 2: The Importance of Culture
- Lesson 3: Measuring Culture
- Lesson 4: Best Practices for Employee Surveys
- Lesson 5: Building Your Culture Survey
- Lesson 6: Building Your Culture and Engagement Dashboard
What is Company Culture?
Company culture determines how and why things get done within your organization. At its heart, company culture is a reflection of the behaviors, beliefs, interactions and attitudes shared across your organization.
In many organizations, company culture is confused with employee engagement, but there’s an important distinction between the two. Employee engagement refers to how people feel about their jobs. Culture is what causes that feeling. Employee engagement can predict an individual’s performance. Company culture predicts your organization’s performance as a whole.
Here at CultureIQ, we define culture as having two components: Operational culture and strategic culture. Both are important to understand when managing culture, and both can have a powerful effect on how a company performs over time.
Operational Culture: Objective and Benchmarked
A company’s operational culture refers to the objectively good qualities to possess. These are the qualities that are common to top performing cultures.
CultureIQ defines those 10 qualities common to high-performance cultures as:
- Work environment
- Performance focus
- Mission and value alignment
These operational culture benchmarks enable you to measure and interpret your culture over time, and see how you stack up when compared to similar organizations.
Strategic Culture: Subjective and Unique to You
A company’s strategic culture refers to the specific set of behaviors that are unique to your organization. Uncovering these qualities helps identify what sets you apart in the marketplace.
They key to strategic culture is is that there are no universal right or wrong answers. When alignment is present, it should encompass your leaders’ values, employees’ values, and customers’ values. It’s why competitors in the same industry can both be successful, while still having very different cultures.
A strategic culture assessment can help you determine where your culture currently falls along the following spectrums:
- Structured vs. Flexible
- Hierarchical vs. Delegating
- Cautious vs. Risk Permitting
- Thinking vs. Doing
- Direct vs. Diplomatic
- Professional vs. Social
- Individual vs. Team-Focused
- Internal vs. External
Once you’ve established where you are, you can compare that with where you want to be. Do you want to be more team-focused than you currently are? Less risk permitting? Use this comparison to identify the biggest gaps between your current culture and your target culture — or in other words, your key opportunities for alignment.
Defining and tweaking strategic culture allows an organization to customize its culture to its organizational priorities and values. The following examples demonstrate two distinct strategic cultures for different business strategies.
Company culture can drive your company’s competitive advantage. A strong, clearly defined, and well-communicated culture impacts all corners of your organization. It drives faster decision making. Alignment on business goals. Higher employee engagement, productivity.
We dive into all these reasons culture is important in Culture Crash Course, Lesson 2. Check it out here.