On Company Culture

Generated with DALL-E

At their core, companies are complex systems with multiple inputs, including capital, labor, and ideas. They ideally produce a well-defined output, whether it’s a product or a set of products. The intricate machinery that operates between these inputs and outputs is where the heart of a company lies. This is where execution takes place, and how culture facilitates or impedes how it functions, how it addresses issues, how communication occurs among members and groups, and how information is shared.

The term ‘culture’ has sparked endless debate and discussion within the corporate world. Culture is one of the most misunderstood and ambiguously defined aspects of companies. Various voices, including founders, influencers, business professionals, and academics, have expressed differing views on what culture should be and its influence on a company’s success or failure. It’s not uncommon to hear CEOs and heads of HR boast about their culture or, conversely, blame culture for a company’s shortcomings.

My intention is not to prescribe a single, definitive definition of culture but to delve into its significance in organizations. I want to examine why culture is needed, assuming it is, and what role it should play. I propose an alternative perspective: culture should not be a predefined goal or a quantifiable output of a company. Instead, I liken culture to a lubricant that permeates the entire system, affecting the efficiency and efficacy of the company’s internal workings.

Role

I suggest that culture should play a passive role in the company. It should function like oil in a gearbox, when culture becomes an active player, it interferes with the system’s functionality. On the other hand, the absence of culture can lead to a problematic vacuum, both in mechanical and human systems.

In this context, culture should be the fluid that keeps the machine running seamlessly. Rather than appointing a separate culture committee or an individual responsible for cultural affairs, culture should be an integral element of how the company operates.

Scope

Operating cultures are pervasive and have a substantial influence on a company’s execution capabilities. In particular, strong leadership is crucial for shaping adaptable operating cultures, especially in smaller companies. A well-defined framework should guide the company in its operations, conflict resolution, failure management, and success handling.

When culture is left to individual teams or business units, it results in isolated subcultures. While each unit may create its culture tailored to its specific needs, a unified framework should still apply at a higher level. This ensures consistency and coordination throughout the company.

A clear framework should be established by leadership before the hiring process begins. This framework should serve as a flexible guideline, not a rigid set of rules, allowing for adjustments to meet the evolving needs of the company.

Non-Goal

As mentioned above, operating culture itself should not be a goal or a desired output. Paraphrasing Donella Meadows in her Thinking in Systems primer, because if you do, don’t be surprised if the output of your company is culture, not products. Perhaps a controversial yet clear example, in my opinion, of what happens when you allow operating culture to be an output is what happens at Google. Their engineering- and trail-blazing-centric operating culture has led them to produce some astonishing tools and innovations, but these are so drenched with the Google operating culture that they are, for the most part, not particularly usable or readily consumable products. And those which are welcomed by users, are almost invariably end up getting canceled/EOL after the newness has worn out and their engineers no longer want to work on them.

Suggested Approach

Below I provide a framework, so to speak, when crafting an operating culture for your company. The order of the questions isn’t important, but it helps to think of them as top-down approach. It’s admittedly interrogative, rather than prescriptive, but it should serve as a solid stepping stone toward a cultural framework that fits your company and leadership philosophy.

1. What are your inputs (capital, ideas, etc.)?
2. What is your desired output?
3. Time frame?
4. How many people will be involved in execution (planned or present)?
5. How many different tasks or areas of responsibilities are involved?
6. What are the internal dependencies?
7. What are your progress metrics?
8. How should the system deal with failures?
9. How’s feedback handled?
10. Who owns each of the tasks? Who owns the whole system?
11. How’s conflict dealt with?
12. Escape hatches?
13. Go or no-go gates?

Then, depending on those answers, guidelines should be created and agreed upon. Leaders then will use these guidelines to build their own guidelines for their areas of concern, and eventually individuals will be able to map their function, value and consequence to their area of work and to the overall system.

Conclusion

I posit culture should not be its own “thing” or function. I also posit that culture should not be an output (and care should be put it isn’t). I posit culture should be ubiquitous, well understood, agreed upon and pervasive within the company. And finally I posit culture framework should be thought in terms of its role in a complex system, as a lubricant or impediment, and implement it accordingly.