Does Company Culture Really Matter?

John Seiffer
Jul 28, 2017 · 3 min read

I was talking to some clients yesterday — two founders who run different branches of their small company. They had made some changes to separate the two aspects of the company and some of their employees were uncomfortable with the division. They said it felt like Mom & Dad were getting a divorce. So they implemented some things to keep the two groups aligned.

  • They started paying for lunch if two people from different teams eat together.
  • They planned some company wide social activities.
  • They are looking into a larger office where they all could work on one floor instead of in separate locations.

I’m impressed with their attention to company culture at such an early stage, and told them so. Most companies’s culture is a reflection of the founder’s personality for better (and often) for worse. In this case the two founders have very different and complimentary personalities so I think the focus on a united culture is very useful.

Was I Wrong?

Today I saw a 3 minute video by Dan Lyons in this article http://fortune.com/2016/04/12/modern-work-culture/ where he says that focusing on culture is a bad thing. I actually love his book Distrupted about his time at HubSpot. He talks about the homogeneity at a lot of tech companies where everyone is young and white, and are hired by the “I’d like to have a beer with you” metric, and how that hurts the company and the employees.

It made me wonder, was I wrong? I think the answer has to do with how you understand “culture.” If it means hiring people like you, and people you like, then your culture is limiting at best and inbreeding at worst. If you think culture is about socializing and Foosball tables then your understanding of culture is both limited and limiting.

The powerful part of company culture is under the surface. It is based on company values not by what people do together in their non-work activities. Rather, it is shown by how money is spent, how decisions are made, why some people are promoted and some not, how risks are taken and failures are handled. Culture has to do with the level of communication, openness and transparency about those things. Culture has to do with whether those things are consistent throughout the company or if they vary with different manager’s personalities. Culture is about the formalized rituals of a company and the informal, unwritten codes of conduct. What can you say when you disagree with a boss? How can you say it? Who takes credit for successes and blame for failures? What does loyalty mean in this organization? Does it go both ways?

These are the things that companies need to focus on. And yes, some socializing helps but don’t mistake it for culture. And yes, it is important to focus on as a company grows.

UPDATE — Must be culture week. I just found this quote from Brent Beshore

“Culture is probably the biggest non-financial indicator. As Peter Drucker once wrote, ‘Culture eats strategy for breakfast.’ We like to say that culture is nothing more than what you reward and punish. We’re looking for cultures that respect employees as valuable partners, and not merely as faceless cogs in a system. We love to see how conflict is handled, how decisions are made, and how new ideas get treated. Ultimately, the tone is set at the top, and so we spend considerable time trying to understand company leadership.”

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