The Leader’s Guide to Corporate Culture

by Boris Groysberg, Jeremiah Lee, Jesse Price, and J. Yo-Jud Cheng

STRATEGY AND CULTURE ARE AMONG the primary levers at top leaders’ clearance in their never-
ending quest to maintain organizational possibility and Effectiveness . And those two levers are Strategy
and Culture . For better and worse, culture and leadership are totally linked.

 Strategy ::

Strategy offers a formal logic for the company’s goals and orients people around them. Strategy
provides clarity and focus for collective action and management. It relies on plans and sets of
choices to mobilize people and can often be enforced by both concrete rewards for achieving
goals and consequences for failing to do so. Leadership goes hand-in-hand with strategy
formation, and most leaders understand the fundamentals.

 Culture ::

Culture expresses goals through values and beliefs and guides activity through shared
assumptions and group norms. in culture includes unspoken behaviors, mindsets, and social
patterns however its so worm lever than strategy . Founders and influential leaders often set
new cultures in motion and imprint values and assumptions that persist for decades. leaders
who have observed are fully aware of the multiple cultures within which they are embedded,
can sense when change is required, and can deftly influence the process. As someone once
said, culture eats strategy for breakfast. It doesn’t have to be that way. Our work suggests that
culture can, in fact, be managed. The first and most important step leaders can take to
maximize its value and minimize its risks is to become fully aware of how it works. We also
suggest how culture can help them achieve change and build organizations that thrive in even
the most trying times.
 The academic literature on the subject is vast. many formal definitions of organizational culture
and a variety of models and methods for assessing it . Numerous processes exist for creating
and changing it. Agreement on specifics is sparse across these definitions, models, and
methods, but through a synthesis of seminal work by Edgar Schein, Shalom Schwartz, Geert
Hofstede , and other leading scholars, we have identified four generally accepted attributes:

1) Shared culture ::

Shared culture is culture that emerges with the shared experience of durable groups. Culture
never occurs in isolation and is a product of social interaction. As such, all culture is shared. It is
common for individuals to belong to multiple cultures such that they may share culture with a
large number of people

Examples:

food, shelter, work, caregiving, knowledge, well-being, resources, mobility, leisure, and services

2) Pervasive Culture ::

 Pervasive refers to the corporate culture that becomes the second nature of the workforce,
leading employees to maintain a positive or a negative attitude with an impact on their
performance.

Examples:

The medication had a pervasive effect on the patient's health.

3) Enduring Culture ::
Culture can direct the thoughts and actions of group members over the long term. It develops
through critical events in the collective life and learning of a group. organizations are more
likely to select individuals who seem to “fit in”; and over time those who don’t fit in tend to
leave. Thus culture becomes a self-reinforcing social pattern that grows increasingly resistant to
change and outside influences

Example:

 Religion. Beliefs of a society, some traditions.

 Art. Architecture, style.
 Politics. Government and laws of a culture (rules and leadership)
 Language. Communication system of a culture (speech, writing, symbols)
 Economy. …
 Customs. …
 Society. …
 Geography.

4) Implicit Culture

The concept of implicit culture refers to the psychological dispositions, perceptions, and motivations
which are shared by people with similar backgrounds and experi- ences and which lend organization and
direc- tion to overt behavior.

Example:
deals with attitudes and beliefs, not tangible things like language, dress, and food. The view
toward power is an example of implicit culture.

An Exploration of the 8 Types of Company Culture in Today's Workplace

Have you ever wondered why everyone shows up 5 minutes late to meetings in your office,
while your friend insists meetings start right on the dot at her company? Or perhaps why some
people seem to get all their friends from work, while others never see their coworkers outside
the office? It could be the type of company culture.

Company culture holds many of the answers to these and countless other differences between
organizations. In order to better understand the types of culture and the optimal approach to
dealing with each, four organizational development experts conducted a literature review to
create eight distinct culture buckets To save you the reading, we’ll discuss the two dimensions
that led to classification of the eight types of culture, as well as elaborate on each bucket.

The 8 Types of Organizational Cultures

1. Purpose
2. Caring
3. Order
4. Safety
5. Authority
6. Results
 7. Enjoyment
8. Learning

In their literature review, the authors of this research found two concepts that underlie a
company’s culture, allowing them to plot the different cultural types on a two-dimensional axis.

First Dimension: The Way People Interact

The first dimension is “people interactions”, which can range from highly independent to highly
interdependent—so as you might imagine, independent cultures foster competition and value
individuals who can thrive on their own, whereas interdependent cultures judge success
through group effectiveness.

Second Dimension: How a Company Responds to Change

The second dimension deals with response to change, ranging from stability to flexibility—the
former favoring rules and hierarchy, and the latter innovation and diversity.

Using these two dimensions, the authors created the below two-dimensional axis and resulting
eight cultural types which drive what unites employees, the type of person that typically does
well in that type of organization, and what company leaders tend to focus on.

Interestingly, the cultural type a company falls into often reflects the industry and geographic
location; For example, the authors categorize China-based Huawei as having a culture of
“authority”, which could perhaps be reflective of the broader culture in China.

To be certain, companies don’t necessarily have to fit in just one type of culture, but
categorizing them as such can help company leaders and employees alike to be more effective
in their work.

1. Purpose Organizational or Company Culture

Employees united by: Driving sustainability and global communities

Employees are generally: Compassionate and open-minded

Leaders emphasize: Shared ideals, greater cause

Good for: People looking for an organization that values making a impact on the world over
individual achievement

Example: Whole Foods

2. Caring Organizational Culture

Employees united by: Loyalty

Employees are generally: Collaborative, welcoming

Leaders emphasize: Sincerity, teamwork, good relationships

Good for: Those motivated to perform well as a result of positive working relationships

Example: Disney

3. Order Organizational or Corporate Culture

Employees united by: Cooperation

Employees are generally: Methodical, rule-following

Leaders emphasize: Shared procedures, customs

Good for: People who are most comfortable in unambiguous, structured environments

Example: SEC

4. Safety Organizational Culture
Employees united by: The need to feel protected and the ability to anticipate organizational
changes

Employees are generally: Risk-conscious, conscientious

Leaders emphasize: Advance planning, pragmatic

Good for: Employees who like to feel included in organizational changes and who prefer careful
planning

Example: Lloyd’s of London

5. Authority Company or Organizational Culture

Employees united by: Strong control

Employees are generally: Competitive, looking to get ahead

Leaders emphasize: Confidence, dominance

Good for: People who are motivated by gaining personal advantage more than organizational
success

Example: Huawei

6. Results Organizational Culture

Employees united by: Success

Employees are generally: Outcome-oriented, merit-based

Leaders emphasize: Goal accomplishment

Good for: Employees who perform their best when executing against set goals and driving
towards a winning result

Example: GSK

7. Enjoyment Organizational or Company Culture

Employees united by: Playfulness and stimulation

Employees are generally: Lighthearted, in search of work that makes them happy

Leaders emphasize: Spontaneity, a sense of humor

Good for: Fun-loving people who look for a sense of excitement in their day-to-day

Example: Zappos

8. Learning Organizational Culture

Employees united by: Curiosity

Employees are generally: Inventive, creative, always looking to explore alternatives

Leaders emphasize: Innovation, knowledge, adventure

Good for: Those who value learning over other things that might be attained through work, such
as stability or personal achievement

Example: Tesla

Conclusion:
Which Company Culture Aligns with Your Values the Best?
At the end of the day, no one type of company culture is right or wrong--nor do most
companies fall perfectly into a single culture. Rather than trying to box a company into a single
cultural type, use these eight classifications as tools to better understand how different
companies function--and, perhaps more importantly, where you’ll be the happiest and most
productive.
The Link Between Culture and Outcomes
Our research and practical experience have shown that when you are evaluating how culture
affects outcomes, the context in which the organization operates—geographic region, industry,
strategy, leadership, and company structure—matters, as does the strength of the culture. (See
“Context, Conditions, and Culture,” the sidebar at the end of this article.) What worked in the
past may no longer work
in the future, and what worked for one company may not work for another.
We have arrived at the following insights:

1) When aligned with strategy and leadership, a strong culture

drives positive organizational outcomes
2) Selecting or developing leaders for the future requires
a forward-looking strategy and culture
3) In a merger, designing a new culture on the basis
of complementary strengths can speed up integration and
create more value over time
4) In a dynamic, uncertain environment, in which organizations
must be more agile, learning gains importance
5) A strong culture can be a significant liability when it is
misaligned with strategy
6)

Four Steps To A New (And Better) Company

Culture
Changing company culture seems to remain a Gordian knot that most organizations fail to
solve. To some, organizational culture is an abstract concept that eludes governance; to others,
a concrete resource that serves as a competitive advantage. Despite which side of the fence
your company may fall, most everyone seems to be able to not only sense their company’s
culture, but also identify specifically what’s good or bad about it.

Notwithstanding the complexity that surrounds the topic, I’ve found success over the years by
boiling organizational culture down to one word to help drive focus: behavior. Some may use
core values, principles or even competencies to describe the same thing. However, I strongly
believe that when people think of culture as a set of behaviors, they can begin to understand
why changing it can be so difficult and why attempts to do so often end in failure.

If the concept of New Year’s resolutions has taught us anything, it is how difficult it is for
anyone to change behaviors. Reports of the exact time requirement vary, though one small
2009 study asserts that it may take an average of 60-plus days for an individual to change a
habit or behavior. Now, imagine extrapolating that change process out across organizations
with dozens, if not hundreds or even thousands, of employees. The good news here is that
behavior can be changed, given the right focus, process and discipline.

Benjamin Franklin is credited with saying, “Well done is better than well said,” which highlights
the value of actions over words. When attempting to shape your company’s culture, behaviors
are everything. Additionally, focusing on behaviors allows organizations to measure their
culture in both quantifiable and meaningful ways. So, in the spirit of change, consider the
following four steps when changing your company’s culture:

1. Understand what problem or opportunity you’re trying to address by changing culture.

As with any initiative, leaders should begin with the end in mind. There’s no shortage of reasons
why companies decide to change their culture, but some common ones include poor financial
or organizational performance, changes in company strategy or executive leadership (e.g., a
new CEO), toxic work environments or lack of accountability. Whatever the reason, make sure
that all cultural change efforts align with either solving or achieving the business goal. Painting a
clear picture of the outcome the organization is trying to accomplish is crucial to successfully
communicating and executing change.

2. Pick your company behaviors, and clearly define them.

This is probably the most difficult step for most organizations since the right behavior set for
the business problem or opportunity they’re trying to address will be unique to each company’s
situation and strategy. Moreover, getting executives to agree on four or five behaviors that will
embody the company’s culture can sometimes be difficult. The company’s behavior set must
align with what the organization is trying to achieve.

3. Embed your company behaviors in everything the organization does.

To successfully change culture, the organization must select cultural anchors that embed the
desired behaviors across the company. These can be broken out into three main areas:

• Talent management: This includes recruiting, selection, retention, succession planning, health
and wellness, and performance management activities.

• Incentives: These include financial and nonfinancial rewards. For example, financial rewards
could be performance or spot bonuses, merits, profit sharing and paid time off. Nonfinancial
might include recognition, opportunity, promotions and policy flexibility.

• Professional development: This includes job design, career pathing, training, certification,
coaching and mentoring programs.

The tactic here is to use as many process and leadership levers as possible to ingrain the new
behaviors in all aspects of the company, so only those employees who embody the new
behaviors will be recruited, hired, retained, rewarded, promoted, celebrated, etc. Change takes
time, but those who are not willing to get on board with the changes in the long term will be
screened out quickly due to the lack of behavioral fit and the consequences that follow.

4. Roll out a change management model, and stick to it.

Most change agents have their favorite model for leading change, but there are many ways  to
design a company culture that thrives. Regardless of the process that is used, as with all things,
consistency is the key. Obviously, mission and vision statements must be (re)aligned with the
desired outcome and culture the organization is trying to build. These two statements should
be embedded in everything from meeting agendas to project plans. When it comes to leading
change, executive leadership must set the initial conditions and tone for the change, but at the
end of the day, culture must be owned and managed by all employees — not just leaders.

In summary, culture change is hard, but not impossible. If organizations can identify the
problem or opportunity they want to address, have clearly defined behaviors that are
entrenched in everything they do and have the discipline and consistency to follow through,
then it is possible to (re)define their culture. Otherwise, as many realize much to their chagrin,
the company’s culture will define itself — for better or worse

What’s Your Organization’s Cultural Profile?

An initiative to shape your organization’s culture, it’s important to explore where it is today.
currently operates, what is valued, how people behave, and what unifies them.

Add the two ratings in each row and then rank the eight styles. The higher the total, the
stronger the match. Compare your rankings with your colleague’s and discuss the following
questions:
• What do you like most about the current culture?
• What behaviors and mindsets might you evolve?
• How effective are your organization’s leaders at role modeling the
culture?
• What are the characteristics of people who are most successful in your
culture?
• When new people don’t succeed in your culture, what is the most
common reason?

On a scale of 1-5, rate how well each of these statements describes your
organization
1 = Not at all well 2 = Not very well 3 = Somewhat well 4 = Very well
5 = Extremely well
How to Shape Your Culture
While leaders can’t fully control a complex entity like culture, you can do your part to shape it.
We have other insights and recommendations on changing organizational culture, but at a high
level, here’s how individual leaders can contribute to shaping organizational culture. It starts
with simply reinforcing the behaviors and cultural elements of which you would like to see
more:

1. Sense the culture. Walk around with a mental video-recorder and observe the current culture.
There are assessments to give you a state of the culture; see if you can learn to identify your
organization’s culture. Do this on a continuous basis, not once a year in a strategic workshop.
2. Contribute to the conversation about culture. Do your part to contribute to the conversation
about what the company’s culture is, and what it should be. Ask: What elements of our current
culture are helping us, and what elements are actually hindering us? (Work on exploring the link
between your culture, leadership, and business strategy.)
3. Model the culture in your own behavior and actions. Start by showing the desired culture in big
and small ways. What you say is important, but what you do matters more.
4. Dampen the elements of the culture that hinder growth. A powerful way to reduce unwanted
cultural elements is to ignore them and not dignify them with attention. If that doesn’t do the
trick, don’t be afraid to call out problematic behaviors or actively and openly oppose them.
5. Strengthen the elements of the culture that promote growth. Contrarily, acknowledge and
celebrate wanted cultural elements. Give at least positive feedback and praise, or even better,
give your support in terms of influence, contacts, or resources. Reinforce what promotes
growth.

Convergence Matters
When we compared employees’ views on their organization’s most salient cultural attributes,
two types of organizations emerged: low convergence (employees rarely agreed on the most
important cultural attributes) andhigh convergence (views were more closely aligned).

Note that in the low-convergence organization, seven of the eight cultural attributes were cited
as most important, and every quadrant is represented. That means employees viewed their
company in varying and often opposite ways. Some saw acaring organization, for example,
while others saw one that emphasized authority.
Why is high convergence important? Because it correlates with levels of employee engagement
and customer orientation. However, if the culture you have is not the one you want, high
convergence will make it harder to change
Context, Conditions, and Culture
Context matters when assessing a culture’s strategic effectiveness. Leaders must
simultaneously consider culture styles and key organizational and market conditions if they
want their culture to help drive performance. Region and industry are among the most
germane external factors to keep in mind; critical internal considerations include alignment
with strategy, leadership, and organizational design

Region
The values of the national and regional cultures in which a company is embedded can influence
patterns of behavior within the organization.

example, that companies operating in countries characterized by a high degree of institutional

collectivism (defined as valuing equity within groups and encouraging the collective distribution
of resources), such as France and Brazil, have cultures that emphasize order and safety.
Companies operating in countries with low levels of uncertainty avoidance (that is, they are
open to ambiguity and future uncertainty), such as the United States and Australia, place a
greater emphasis on learning, purpose, and enjoyment

Industry
Varying cultural attributes may be needed to address industry-specific regu-
lations and customer needs. A comparison of organizations across industries
reveals evidence that cultures might adapt to meet the demands of industry
environments.
Organizational cultures in financial services are more likely to emphasize
safety. Given the increasingly complex regulations enacted in response to the
financial crisis, careful work and risk management are more critical than ever
in this industry. In contrast, nonprofits are far more purpose-driven, which
can reinforce their commitment to a mission by aligning employee behavior
around a common goal.
Strategy
For its full benefit to be realized, a culture must support the strategic goals and plans of the
business. For example, we find differences between companies that adopt a diff erentiation
strategy and companies that pursue a cost leadership strategy. Although results and caring are
key cultural characteristics at both types of companies, enjoyment, learning, and purpose are
more suited to differentiation, whereas order and authority are more suited to cost
leadership.
Leadership
It is hard to overestimate the importance of aligning culture and leadership. The character and
behaviors of a CEO and top executives can have a profound effect on culture. Conversely,
culture serves to either constrain or enhance the performance of leaders. Our own data from
executive recruiting activities shows that a lack of cultural fit is responsible for up to 68% of new-
hire failures at the senior leadership level. For individual leaders, cultural fit is as important as
capabilities and experience

Organizational design
We see a two-way relationship between a company’s culture and its particular structure. In
many cases, structure and systems follow culture. For example, companies that prioritize
teamwork and col laboration might design incentive systems that include shared team and
company goals along with rewards that recognize collective effort. However, a long-standing
organizational design choice can lead to the formation of a culture. Because the latter is far
more difficult to alter, we suggest that structural changes should be aligned with the desired
culture.