Company Culture Can Make or Break Your Business
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Change Management

Company Culture Can Make or Break Your Business

March 31, 2024

7 min read

Devin Culham

Devin Culham

Does your company have a strong, healthy culture?

Depending on where you fall in the organizational chart may greatly influence your response. Still, the reality is that company culture is a crucial and often overlooked asset that can have a profound impact on your business. However, for many companies, it’s an afterthought, a nice-to-have, or something elementary like a company’s mission, vision, and value statements. However, company culture, when nurtured correctly, can become one of your business’s most powerful possessions. It can help maintain high morale, reduce employee churn, and help attract top talent in the marketplace. But more importantly, it is vital to ensure that every member of the company is an engaged and active contributor that takes pride, not just in their individual work, but in the company and its vision.

In this article, we’ll discuss how one major company has leveraged culture to its advantage, ways companies often get culture wrong, and what you can do to get it right.

Companies Are Only as Powerful as the People Who Work For Them

What could you do if everyone on your team pulled in the same direction? Could you launch products faster? Could you close more business? Could you grow your company more quickly?

Culture is one of those fundamental building blocks in any great company. And a good company culture starts from the top.

But what is culture exactly?

Culture comprises of the principles that guide your company; the values, and behaviors that every employee, from the C-level to the summer intern, should embody. They’re the core practices and beliefs that set your company apart. And if you want to have a strong company culture, you must be intentional about formulating those principles and remain vigilant about communicating them to every employee in the company and every new hire that walks through the door.

There’s perhaps no stronger example of this than Netflix – the uncontested leader in at-home streaming services. But Netflix wasn’t always the company it is today. It didn’t always win Academy Awards or produce its own series; in fact, it wasn’t always a streaming platform. Netflix’s initial ambition was to deliver DVDs in the mail to its subscribers, eliminating the need for customers to physically travel to competitors like Blockbuster to rent movies.

But how did Netflix go from humble beginnings as a mail-based service to a streaming powerhouse? According to Patty McCord, Netflix’s founding chief talent officer, it was culture.

“The Netflix culture wasn’t built by developing an elaborate new system for managing people, we did the opposite,” McCord writes in her best-selling book, Powerful. “We kept stripping away policies and procedures.”

McCord credits Netflix’s cultural principles as one of the critical drivers of the company’s success. In fact, Netflix went viral when it published its ‘culture deck,’ which has since garnered more than 15 million views. The purpose of the culture deck was to identify the behaviors that Netflix wanted to see become consistent practices in its employees and then instill the discipline of actually doing them.

McCord writes, “We found that inculcating a core set of behaviors in people, then giving them the latitude to practice those behaviors—well, actually, demanding that they practice them—makes teams astonishingly energized and proactive.”

What Companies Often Get Wrong About Culture

Before we discuss how you can instill a great culture into your business, let’s first discuss some ways companies get culture wrong.

Lack of Transparency

Although many executives might think that not being transparent about the health of the business may protect employees from feelings of fear or disengagement, what it does is foster little trust between employer and employee. Executives should communicate candidly with their employees. Though some details inevitably won’t be shared during the next all-hands meeting, the sentiment here should be to use the minds that you already have in your organization to help solve some of your biggest challenges. Employees should understand all facets of the business, including those outside of their department. By empowering employees with information that helps them understand how the business operates, the company’s challenges, and the competitive landscape, you venture to gain solutions or insights from any company contributor – not just key contributors.

You’ve Got a Policy for Everything

Do you hire adults or schoolchildren?

Now, you may be thinking, “Adults, obviously,” but do you treat them that way? Or, do you have meticulously designed policies, procedures, and management hierarchies that box employees in, preventing them from engaging in their work in a way that makes them feel the most impactful?

For example, if you use software to monitor remote employees’ mouse activities or you’ve made return-to-office a mandatory directive (because you’ve still got another five years on your office lease), the culture you’re communicating to your employees is that they can’t be trusted.

Instead, focus on empowering people to do a great job by creating conditions that foster them to want to work in the best way for the business. In one radical example, Netflix eliminated its travel and expense policies, instead relying on the good judgment of employees to behave in the best interest of the business. Despite warnings from the company’s lawyers, Netflix found that employees didn’t abuse their freedom but were empowered by the fact that the company treated them like adults (McCord 2017, 14).

You Assume Employees Know What You Know

Have you ever heard the saying about the word assume? It makes an ass out of ‘u and me.’

When you assume that members of your organization have the same understanding you have, you set yourself up for disappointment. Now, we’re not saying every employee needs to have the same knowledge or expertise, but important ideas should be communicated and communicated often. If you’re sending one e-mail, one memo, or giving one address about a new idea, policy, or directive and are expecting it to take, you’re likely to be sadly disappointed. Important ideas must be reiterated, not once but several times – and at deliberate intervals to really make them stick.

In addition, when speaking about strong company culture, values must also be exemplified. Executives and managers don’t get out of doing the difficult work simply by being in leadership positions. If one of your company values is strong collaboration, but you’re unavailable to give or receive feedback, don’t assume your employees will embody that value either.

What Companies Can Do to Get it Right

If you asked your employees right now what the company’s culture is, how would they respond? Would they give the same answer? Or would they be vastly different? If the latter, it may be time to revisit, or perhaps define for the first time, your company culture.

Here are a few steps you can take:

Take Stock of Your Current Employees

Maybe your team has loyal employees who have been with you for years. Maybe you have some new faces on the team (or you’re intent on hiring more employees). Wherever you are, assessing your current team can give you clues into your company’s existing culture. A small, scrappy startup of 5-10 employees will have a much different culture than a corporation with 500 employees. With a small company, the culture might be more ‘work hard, play hard,’ whereas a more mature company might value a good work-life balance.

Knowing where you start can give you a sense of where you’re headed and allow you to change direction.

Define Your Values and Make Them Your North Star

Company values can help ensure that everyone is pulling in the same direction – but they need to be clearly articulated. Values will differ from company to company, but one way to think about it is what company values you would want to work for. Do you value autonomy and flexibility or prefer collaboration and set 9 to 5? Take time to really sit with what values make up the company and what values will grow with the company in the future.

In a difficult situation, look back to your values and let them be your north star. If a business decision, employee, or job candidate doesn’t align with your cultural values, allow your values to guide your decision-making. Doing so can keep your company culture on course so it doesn’t drift off into unfamiliar or uncomfortable territory.

Don’t know where to start? Use Netflix as your blueprint.

Communicate Your Values to Your Employees – Often

Consistent and transparent communication of your company’s values is paramount. Just as Netflix openly shares its cultural principles, ensuring alignment among stakeholders, your organization can benefit greatly from similar transparency. By consistently reinforcing your values, you not only empower your employees to embody them but also foster trust and cohesion throughout your organization. Ultimately, a well-defined and effectively communicated culture can serve as a guiding beacon, steering your company through changes and challenges while solidifying its identity and reputation in the eyes of employees, customers, and investors alike.

Level-Up Your Culture to Accomplish Strategic Goals

Fostering a strong company culture isn’t just a luxury; it’s a strategic imperative. As we’ve explored, culture can shape the very essence of your organization, influencing everything from employee morale to business outcomes. While it’s easy to overlook or misunderstand, the value of a well-cultivated culture cannot be overstated.

From the foundational principles set by leadership to the daily practices embraced by every employee, culture permeates every aspect of an organization. We’ve seen how industry giants like Netflix have harnessed culture to drive innovation and success, proving that a cohesive and empowering culture can be a powerful asset.

However, getting culture right requires intentionality and effort. It means avoiding common pitfalls such as lack of transparency, overly restrictive policies, and assuming shared knowledge. Instead, it involves actively defining and communicating core values, ensuring alignment across the organization, and empowering employees to embody those values in their daily work.

As you reflect on your own company’s culture, consider taking stock of your current team, defining your values as your guiding North Star, and communicating those values consistently and transparently. By investing in your culture, you’re not only fostering a more engaging and fulfilling work environment but also laying the groundwork for long-term success and resilience in an ever-evolving business landscape.

In the end, a strong company culture isn’t just a nice-to-have—it’s a competitive advantage that can drive growth, innovation, and lasting impact. So, as you navigate the complexities of running a business, remember that your culture may just be the most powerful tool in your arsenal.

McCord, Patty. 2017. Powerful: Building a Culture of Freedom and Responsibility. Silicon Guild.

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