Culture

“Culture eats strategy for breakfast” - Peter Drucker.?

Instinctively, we know that companies with good culture make for better places to work; attract good talent and apply that talent to produce and distribute useful products/services for their customers that customers love and pay for. Culture more than strategy impacts a company’s place in the world.?

Culture is hard to replicate. It is a key source of a sustainable competitive advantage - which is the heart of strategy.?

Culture (integrated set of beliefs, values, behaviours, rituals) is a precondition to civilization (control over technology & hence advancement). In the past decade, many companies in the high-tech industry have embraced Culture as a management tool & developed/documented their culture code.

For instance, here's HubSpot’s culture code & here’s another good resource on culture codes of other successful companies of our time.

Most of these culture codes have a remarkable overlap. You guessed it; nearly all of them have some form of:

(1). Love your customers; act in their long term interest

(2). Trust your colleagues; be collaborative; conduct yourself with transparency and fairness

(3). Think big, be bold. Don’t be afraid to fail; learn from your failures

(4). Act with intent and urgency?

(5). Be a force of good in the world

But many of these companies are remarkably different from each other. If you were to start a company; you might find it hard to write a culture code that’s meaningfully different and doesn’t include some form of these tenets.?

An experiment might be in order: Pick 3 companies where you have friends into your network - call them and ask them about their experience of company culture. Force them to pick one or two things and not read you the corporate shpeel.?

How is it that they all have similar sounding culture codes and such different cultures? The thing is; that culture is the ‘lived reality’ of culture code. The code is what these companies aspire to; but culture is what’s actually happening day-to-day.?

So what matters most to the lived reality? In my experience - there are a handful of key factors that determine the real culture of a company:

(1). Founder or CEO values

You can’t document a culture code and expect it to become real. Founders or CEOs ultimately demonstrate by their actions & every day conduct the reality of who they are; what they value. They show, by examples, what behaviours are considered positives vs negatives. Executive staff observes and carries that forward and while you can’t have a company where everyone has the same values - you do get a common ground (that is if leadership is consistent, coherent and expressive).

Net net ‘Culture starts at the top’.?

To all my friends who understand cricket - they noticed this in action - when Dhoni took over as the captain of the Indian team.?

Another example of this is Uber vs Lyft. Uber had a ‘let a thousand flowers bloom’ approach - characterised by aggressive investments in growth and portfolio diversification (which they now seem to be pulling back). Lyft stayed super focused and quite conservative. Again, without getting into ‘right vs wrong’ labelling - the difference between the two companies on risk-taking is noticeably vast. I bet it came from Founders personalities and percolated down.

(2). Power Dynamics

Many companies have a functional power center (e.g. Product Management or Sales or Marketing) and that’s determined by the company’s business (and/or history). Facebook and Google have engineering-driven cultures. Cisco has a sales driven culture. You wouldn’t find that in their culture codes. There’s nothing wrong per se in a functional centralization of power - there could be some very good reasons for it. But it might be worthwhile for CEOs to rethink and affect the distribution of power at their companies.?

Power distance is even more complicated. In some companies the worker bees feel empowered to speak truth to power and engage with executives in an intellectually honest way (without worrying about people’s titles). In others, they don’t even have a chance to get in front of executives because they are systematically excluded from those opportunities by middle management and discouraged from being too direct or too transparent or too honest :-). Again, this is a key area of cultural difference among companies. And every CEO needs to think about managing power distances.

(3). Fact-orientation?

You might hear that a certain company is very ‘numbers’ driven. In companies with facts-driven culture; workers ground their stories and work in facts and reality of their business. They focus on measurable impact. They value data and insights from the data. And, leadership values insights and direct dispassionate truth and details vs hyperbolic platitudes full of adjectives.?

(4). Toolset

You might quibble and say that tools make up ‘civilization’ and not ‘culture’. And going by strict definitions of the two words; I’d have to agree. But in this context - it’s harmless to conflate the two.?Tools determine how easy it is for workers to find facts, be transparent, collaborate & align. Your collaboration suite has more impact on your company culture than the culture code document. Pay attention to tools, who has access and how they are used.

There’s probably more to the lived culture of any company. But if you want to really understand any company’s culture, start by asking about their founder/ceo; power dynamics, facts-orientation and toolset. Everything else - you will find in their, quite likely already published, culture code :-).