A guide to organizational culture

Do you lead a company, division, function, or team? Do you have or participate in a culture? Are you a human? If so, this article is for you!

In just 3 easy steps, I will teach you how to master culture to drive your organization to new heights in 2 weeks! Just kidding. There are no easy steps. But I do think this article will give you a powerful way to think about culture so you can lead your organization to achieve its highest aspirations.

I’ve written about culture in various articles over the years. But since culture is one of the most important topics in our work at Rule No. 1, I decided to try and bring together our most central ideas and frameworks into one place to hopefully shine some light on a complex topic.

Let’s start with a definition…

Culture is the environment you cultivate through your choices and actions.

To be clear, I’m not just talking about you. Yeah you. I see you. (Pssst, you have something stuck between your teeth.) I’m talking about everyone in your organization. But I’ll write in the second person here because it feels more personal and I think we’ve got a lovely rapport going on.

Simply put, culture is the sum total of everything that happens in your organization. The formal and informal. The written and unwritten. The spoken and unspoken. It’s what your organization chooses to reject, tolerate, or embrace.

Let’s go a little deeper and unpack the definition above.

Environment: Culture consists of some very tangible elements like a weekly standup meeting and some highly intangible elements like your beliefs. In that sense, the environment is a great metaphor for culture. Culture is all around you. It’s the soil in which plants grow. It’s the plants themselves. It’s the air you breathe.

Cultivate: Culture is not something you “create” or “build”. Culture is organic. You can shape it, you can influence it, you can nourish it. But you cannot just will it or command it into being. Nor can you change it by simply implementing a change plan.

Choices: Since everything you do has an impact on your culture, choices matter a lot. Every choice you make has an impact on the organization when it results in action, but it also has an impact as a signal — it tells people what you care about.

Actions: Ultimately, culture is expressed in human behavior and in the products, consequences, and effects of human behavior. Not all of it is a choice. Not all of it is conscious. In fact, much of human behavior is subconscious — stuff we do sort of on autopilot. This is where culture becomes critically important. When behavior is not the result of conscious, deliberate intention, it is often the result of culture — an environment that makes some behaviors more likely and others less likely.

With that definition as the foundation for how we think about culture, here are some core tenets we hold as truths when we talk about culture.

1. On “good” and “bad” culture

You often hear people talk about a “good” or a “bad” culture. We think that’s the wrong way to think about culture. In our view, there’s no such thing as a good or bad culture. People might like or dislike a particular culture. They may even find some morally offensive. But culture is a tool to achieve a desired end. Which means good or bad is not the right question. Instead, we should be asking whether it’s effective or ineffective.

To be very clear, we are not saying there’s no such thing as good or bad, right or wrong. We’re just saying that if a culture is morally bad, it’s because the founder or the leaders have objectives that are bad, and they are using the culture — through sins of commission or omission — to realize their objectives.

Culture is a tool to foster certain behaviors and stop others. Culture should make the right things easy to do and the wrong things hard to do.

And what are those “right” and “wrong” things? Well that depends on what makes your organization who you are. Which brings us to our next point.

2. Culture should center around your Purpose and Values

When thinking about the kinds of behavior you want to see more of and less of in your organization, you can look through strategic, financial, operational, moral, political, and other lenses. And while these are all important at times, we believe the right lens to look through is purpose and values. Meaning, the behaviors you should want your culture to foster and make easier for people are those that are consistent with your Purpose and Values, and the behaviors you should want your culture to suppress and make harder for people are those that are inconsistent with your Purpose and Values.

The other lenses mentioned above should, if important, find a place in your system of purpose and values. For example, every business has to make a profit. So of course, you need people engaging in behaviors that lead to profit. Since those behaviors are important, they should show up in your Purpose and/or Values. That doesn’t mean you should have a Value that says “We value profit”; you can be cleverer and more original than that. Perhaps your Purpose has to do with building long-term relationships, and you can’t be around for the long-term if you aren’t making money — in which case your Purpose statement would imply the need to generate profit and you’d teach people in the organization this important implication of the company’s Purpose. Or you might have a Value that’s about thriftiness — to manage cost, or innovation — to drive revenue growth.

Our point here is not to suggest what your Purpose and Values should be. Only that when you think about behaviors, you should define “right” and “wrong” in terms of your Purpose and Values — and that table stakes like turning a profit and not breaking the law should be incorporated into your system of ideas first by finding a home in your Purpose and Values.

3. Culture includes everything

It is not uncommon for people to limit their view of culture to:

• Descriptions of what it feels like to work there — e.g., “We’re a very respectful culture”
• Specific rituals or events that take place — e.g., an All Hands meeting or casual Fridays
• Policies — e.g., “We have an open-door policy”

While those are undeniably part of culture, they do not represent the entirety of what a culture is. Leaders who take a narrow view of what culture comprises, are missing out on a broader toolkit available to them to change the trajectory of their companies.

At Rule No. 1, we think about culture much the same way as anthropologists. Their studies of culture look much more expansively at how a group of people live their lives. Kinship systems, storytelling and oral tradition, myths, art, political systems, rituals, religion, economic systems, technology, and much more are all part of the purview of an anthropological study of culture.

Basically, culture is how you live. It includes everything. Yes, that too. In the context of an organization, we believe it is useful to look at 15 elements that comprise culture.

4. Great cultures work as a system to reinforce the behaviors that make an organization unique.

Each of the 15 elements of your culture sends a message about how the organization thinks and what it cares about. When the 15 elements all send the same message, people are clear about what really matters, and their behavior is more likely to align to your Purpose and Values. When the 15 elements send multiple messages, people are confused, and dysfunctional behavior ensues.

You probably won’t be surprised to hear that in most organizations, the culture sends many mixed messages.

What culture often looks like but shouldn’t

There’s a pretty good chance your organization looks somewhat like this. Don’t feel bad. You’re in excellent company. It is simply the nature of the world — and especially human systems — to devolve into entropy.

Organizational culture falls out of alignment usually for three reasons:

1. There isn’t a very clear and compelling purpose and values or there is a lack of commitment to truly live by them. Yet even when there is…
2. The elements of culture are “owned” by different departments and they don’t spend enough time collaborating to insure their work is aligned.
3. People make decisions that make total sense from an operational or financial standpoint but which move the organization ever so slightly away from purpose. Over time, many thousands of such decisions accumulate to create the picture you see above of a misaligned culture. A few examples:

You have a high-performing senior leader who is ready for promotion but there’s no open role. You want to keep this person engaged so you create a new role broadening their scope of responsibility and, in the process, changing the org structure. The decision makes total sense from a talent retention point of view, but it complicates the org structure. This, inadvertently, sends a message that the company sees structure as a tool for satisfying the career demands of individual leaders and not as a tool for making collaboration easier.

You acquire a company. Their culture is fun, human, and approachable. You can see it in how they name their printers — Shakespeare, Donne, Keats. Your culture is more formal. Your printers are named MT-1301S, MT-1301N… You want a common culture so when people in the acquired company come to work on Day One after the deal closes, they find all their printers have been renamed. NewCo1301S. NewCo1301N. Yay! Makes total sense to the guy who fixes the printers but sends an awful signal to the “acquired employees” who were told their existing culture would be respected and preserved. [Btw, this is a true story.]

Organizational culture usually falls out of misalignment due to many well-intentioned and smart decisions — where people were optimizing for something other than purpose and looking primarily at short-term implications.

Like a garden, culture has to constantly be tended to by someone who holds the vision for what it’s meant to evoke. You can create the most beautiful harmonious garden but if you just leave it, it will become overgrown and messy.

What culture ought to look like

Ideally, you start by defining who you are — Purpose and Values — and how that should uniquely come to life in behavior. Then you shape a culture that consistently reinforces those — and only those — Behaviors. This is a powerful system that clearly tells everyone what is expected of them and, more importantly, makes it much easier for them to play their part.

Of course, this is an ideal picture. In the real world, it will never be perfect. That’s ok. Nothing ever is. But hopefully, you will attend to the health of your culture at least as much as you tend to the health of your finances. Which brings us, via this very smooth segue, to…

5. Your responsibility to the culture as a leader is to serve as a culture designer — getting into the weeds of the 15 elements so that the daily experience people have brings purpose to life and makes it easier for them to do the right thing.

Sadly, somewhere along the way leaders became convinced that their primary culture responsibility is to give inspirational speeches and be a cheerleader for the company. Those are sometimes important and necessary tasks for a leader. But when what you say is contradicted by what people experience every day, it would be better for you to stop talking and start doing.

Yes, it’s a lot harder to redesign your global compensation system or organizational structure than it is to give a Town Hall speech about how there’s no “i” in team. (If you take nothing else away from this article, please take away that you should never ever ever use such awful cliches.) But that’s why you get paid the big bucks — to actually do the hard work of leadership.

To help, here are some questions you might start asking about your culture.

Employee Selection

• What criteria do you use to make hiring and promotion choices?
• Are those choices always consistent with your Purpose and Values?
• What experience do candidates have when they go through the recruiting process? Do they walk away with a clear sense of what you stand for or just a clear sense of what the job will be like?

Job Design

• Do people’s jobs give them the opportunity to contribute to the impact your company wants to have on the world?
• Do people have a clear line of sight from their daily work to the impact it has?
• Do people need to go outside of their “day job” to do work they find meaningful?

Performance Management

• What is your system designed to accomplish? Really.
• Are you tracking behaviors or just results?
• How do people get feedback about their performance? What does that experience feel like for them? What does it say to them about what the company truly cares about?

Rewards & Recognition

• What do people get rewarded or recognized for? What do they believe they get rewarded or recognized for?
• How do you choose what the rewards are? Are they any different than what any other company would give out?
• What does it feel like for people when they are rewarded or recognized? How do you know?

Leader Behavior

• Does every manager see bringing purpose and values to life as one of their top priorities?
• What knowledge or skills would they need to have to be a powerful role model for your Purpose and Values?
• Do you know which leaders are not living and modeling your Purpose and Values? Are you willing to let them go if they can’t or won’t change?

Life Conditions

• Do all managers know their direct reports as people?
• Does everyone believe and feel that the company cares about them as people and not just employees? Why or why not?
• What benefits could you provide that would help everyone live full lives at home so they can show up to work as full, healthy, fulfilled, energized humans?

Training & Tools

• How do you prepare people to do their jobs well? Does that include as much focus on how they live purpose and values as it does on the technical aspects of their job?
• How do you help people feel like members of the culture, not just employees?
• What tools do you give people and do they match who you uniquely are as an organization?

Process and Policy

• What does your process and policy make easy? What does it make difficult?
• What messages are people taking away from your process and policy? How do you know?
• What is one process or policy change you can make that would most boldly signal to people that you deeply care about your Purpose and Values?

Metrics & Analytics

• What story does your system of metrics tell people about what the company cares about?
• Which metrics are people paying the most attention to? Why?
• How can you make sure that purpose and values-oriented metrics are not seen as side and separate to your “real” business?

Organizational Structure

• What does your structure make easy? What does it make hard?
• What story does that tell people?
• What are the unintended consequences of the boundaries you’ve created between units?

Communications

• Is what people hear from official company communications the same as what you intended? Why or why not? How do you know?
• How frequently does the company talk to people about purpose and values? And are people hearing about it through communications more than they’re feeling it in their daily experience?
• Do your channels, messages, and messengers consistently reinforce your Purpose and Values? What’s one change that could have a powerful positive impact?

Workspace

• What are your physical or virtual spaces designed to do?
• If someone walked into one of your offices or joined one of your virtual collaboration spaces without knowing what company it was, would they see any clues that might tell them who you are?
• How well do your spaces tell your story?

Rituals

• What are the moments unique to your company that reinforce your Purpose and Values and create strong personal and team bonds?
• What could you do to more powerfully manifest Purpose and Values in the moments that people experience every day (e.g., meetings)?
• How might you do that for the special moments (e.g., a new person joins or leaves the team)?

Symbols

• What are the most powerful symbols in your culture? Where do they draw their power from?
• How can you make sure people see them and pay attention to them more?
• Are there any symbols you put out there that inadvertently contradict your stated Purpose and Values?

Sense of Purpose

• Do people find meaning in what the company stands for?
• Do they find meaning in their daily work?
• Do your Purpose and Values motivate people in their lives or is it just something they care about “at the office”?

An offer

If you’re intrigued by these ideas and want to bring them into your culture, I’d be happy to spend some time chatting with you.
Send me a note at adam@ruleno1.co.