How To Leverage Organizational Culture For Competitive Advantage

Organizational culture is often an under-appreciated and mismanaged organizational asset.

Culture can be defined as how individuals within a bounded system, usually an organization, supply chain or affinity group, interact with each other. Community is how well those bounded systems i.e. cultures, come together to create unbounded systems.

Organizational culture is not something that should be addressed “once we get our product or service up and running”. Organizational culture should be what drives the development of your products and services. It should help determine your strategic partners, your hiring practices, your forms of internal and external communications, etc. Organizational culture is your declaration to all stakeholders, direct and indirect, what they should expect whenever they encounter you, your employees, and your products and services.

Many founders are doing themselves, their organizations, and their products and services a disservice, and in some cases harm, by not taking the time to consider organizational culture. An organization’s culture has value. This value is determined by a marketplace, customers, employees, supply chain partners, etc., that increasingly is seeking to work with individuals and businesses which demonstrate values that align with their own.

The recruiting and training process is a resource heavy one, so making decisions about your values as early as possible and how they will be demonstrated is culture in action. There will always be employees who are on the lookout for better opportunities, especially money, elsewhere. But when all things are equal, they often leave or stay based on your organization’s culture.

Members of underrepresented communities in tech are known to make their employment decisions based on culture. This is an important concept not only to understand but to internalize when success in today’s business climate requires organizational leaders to be receptive to diverse perspectives.

In order to position an organization’s culture for competitive advantage and in turn, be able to benefit from it, founders should be thinking about culture at the same time that they are iterating their products and services. Although it’s never too late to focus on culture, organizational change is often a complex and challenging undertaking which requires an expenditure of already limited resources in order to identify and make the appropriate shifts to address already established culture issues.

Action Steps for Leveraging Organizational Culture For Competitive Advantage for New Businesses:

  1. Gather all current team members together to have a serious conversation about what values you want to use to guide your communication and actions. This conversation should take place in a comfortable environment which supports all team members input. Which might mean, in an alcohol-free environment.
  2. Create a story of what experience you’d like internal and external stakeholders to have when coming into contact with your team and products and services. Get as detailed as possible and work to gain consensus among team members. Then reverse engineer the desired experiences. Ask yourselves, “what would we have to do/be in order for stakeholders to have this kind of experience with the team and with our products and services?” Develop a list action steps from this exercise.
  3. Take the list and group similar action steps. Once the action steps have been grouped, assign someone on the team to be responsible for that group of action steps. Without someone taking ownership, the chances of success are lowered.
  4. Develop a 2-week sprint schedule around this initiative until the team is receiving feedback from all stakeholders that the desired cultural experience is taking shape.
  5. Then schedule monthly culture meetings to demonstrate the importance of culture and to ensure that your efforts remain on track. This also helps the team address culture issues that will come up before they have a chance to negatively affect this valuable asset.

Action Steps for Leveraging Organizational Culture For Competitive Advantage for Established Businesses:

  1. Make this process a priority.
  2. Ask stakeholders, internal and external, to provide the team with feedback and suggestions on current organizational culture.
  3. LISTEN! This is not the time to try to explain, justify or defend your current situation.
  4. Follow steps 1–4 under “Action Steps for Leveraging Organizational Culture For Competitive Advantage for New Businesses”.
  5. Communicate your organization’s culture changes with all stakeholders and allow them to provide you with feedback.
  6. Follow step 5 under “Action Steps for Leveraging Organizational Culture For Competitive Advantage for New Businesses” once the team and stakeholders believe that the appropriate culture changes have been made.

By following these few, although challenging steps, founders will be doing the work necessary to proactively position their organizations to stand out in an overcrowded marketplace while developing a reputation that will enable them to authentically trade on culture for competitive advantage.