Your Guide to Organizational Culture

Why is Organizational Culture so Important?

Organizational culture is crucial because it shapes every aspect of a company’s operations, from decision-making processes to employee behavior and overall performance. It acts as the invisible framework that guides actions, unites employees under a common vision, and fosters a sense of identity and belonging. A strong culture enhances engagement, drives motivation, and attracts talent, while also providing a competitive edge in the marketplace by differentiating the company in meaningful ways. Ultimately, organizational culture is the foundation upon which trust is built and sustained, enabling businesses to navigate challenges and adapt to change effectively.

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What is Organizational Culture?

Culture is a result of human beings’ craving for predictability and certainty. It develops over time when there is a consistent group of people, formed from shared history and the learning that comes from many experiences together. This creates patterns that define the acceptable ways to think and behave in response to various situations.

Quite simply, culture is “how things are done around here.” It represents the organizational habits of the organization.

Culture happens within groups of people so while we are looking at organizational culture, keep in mind that functions, departments and even teams can have a similar but unique culture. The value of getting intentional about culture is to ensure that there is consistency in the employee experience.

Consider how culture and brand are aligned. Culture is the “internal brand” that employees experience and the “brand” is what the customer’s outside the organization experience. If they are misaligned, then the brand experience does not translate into loyalty, productivity or profitability.

We once worked with an organization that did an amazing job improving their reputation externally but completely overlooked their employees who had a negative opinion. When there is a mismatch between the brand promise to the customer and the culture expectations (employee promise) the loss of productivity and passion will reduce the bottom line.

Characteristics of Organizational Culture

Organizational culture – the shared values, beliefs, and practices that shape the environment of a workplace –  can be complex and multifaceted. However, three key characteristics stand out for their universal relevance and impact on how an organization operates:

1. Shared Values and Beliefs

At the core of any organizational culture are the shared values and beliefs that act as guiding principles for behavior and decision-making within the company. These values are often established by the founders and leaders and become embedded into the organization’s practices, influencing everything from how employees interact with each other to how the company conducts its business. This characteristic ensures a sense of purpose and direction, aligning the organization’s efforts and fostering a strong sense of identity among its members.

2. Norms and Behaviors

Organizational culture is also characterized by the norms and behaviors that are accepted and expected within the company. These are the unwritten rules of conduct that dictate how employees interact with each other, with clients, and even how they approach their work. Such norms can influence the level of formality in communication, the approach to teamwork and collaboration, and the openness to innovation and risk-taking. This aspect of culture shapes the daily experience of working within the organization, impacting employee satisfaction and productivity.

3. Rituals and Symbols

Culture is further defined and reinforced through specific rituals, ceremonies, and symbols that are unique to the organization. These can include regular meetings, annual retreats, awards, logos, and even the layout of the workspace. These elements serve to reinforce the values and norms of the organization, celebrate achievements, and strengthen the sense of community among employees. Rituals and symbols are powerful tools for embedding culture, providing tangible reminders of the organization’s identity and values.

Together, these characteristics create the distinctive atmosphere of an organization, affecting everything from employee engagement to brand perception. A strong, positive organizational culture not only improves performance but also helps attract and retain top talent, making it a critical asset for any company.

5 Facts About Culture

Culture is too important to not get it right. If you mistake the fake factors for real culture, then you will not address the underlying beliefs and assumptions that truly drive culture.
  1. Culture is how you are expected to behave and comes from shared beliefs through common learning. Ideally these “unwritten rules” correspond to the stated values and beliefs of the organization. Many leaders say they want an innovative culture where people are free to take risks, try things and make mistakes. But if a team member is publicly chastised by the leader – what kind of culture is being created? The team member learns that he will be humiliated if he makes a mistake. So next time there is an opportunity to take a risk, he will apply what he learned and avoid it. This is why the second truth is essential for leaders to understand…

  2. Culture is a leadership responsibility (not owned by HR, or a culture team.) While everyone plays a part in creating culture — that’s why it’s about shared learning and mutual understanding — leaders set the tone. It’s fascinating how often a leader’s words and actions are unintentionally out of sync. An executive we were coaching was in a meeting with over a dozen attendees. The person leading the meeting was not well prepared and hadn’t set clear objectives. This leader got frustrated with the time that was being wasted and the lack of productivity. So she took over the meeting, and made sure that the needed outcomes were achieved. Unfortunately, those actions had unintended consequences. The team member didn’t learn how to improve, he learned that if he didn’t do it the right way someone else would do his job. Instead of stepping up, next time he’ll step back.

  3. Culture is caught not taught, reinforced not announced. Imagine that you are in a meeting, and you believe that it’s polite to say, “bless you” when someone sneezes. Someone sneezes and you are the only one to say, “bless you.” You’ve just learned that with this group of people, that is not the correct behavior. No one had to teach this to you, it’s learned through observation and experience. Leaders can talk about their ideal culture, but it’s only through shared learning and consistent action that culture gets created.

  4. Culture exists at many levels. While it’s true that there is an overall organizational culture, there are also sub-cultures. These exist at department, business unit, divisional and even team levels. This is why culture is complicated. Various groups have shared experiences and learn to behave in specific ways.

  5. Culture change is possible but not easy. If you think about culture as organizational habits, it helps you see that these consistent patterns of behavior that are learned over time don’t change just because a new set of values gets rolled out! Think about how hard it is for you to change a habit. Now imagine that multiplied by all the employees in an organization. We use the culture roadmap to guide the process of change.

Experiential Ways to Help People Understand Organizational Culture

We often start our culture debrief discussions by having all the leaders put their hands over their heart and breathe. Perhaps it was a strange way to start an intensive discussion on culture, but it provides a tangible way to better understand something that’s talked about but not well understood.
  1. Culture is like breathing – whether you think about it or not culture happens. When you are intentional, you can use breath to accomplish an intended outcome like relaxing or increasing alertness. When you are intentional with organizational culture, you can more successfully accomplish goals, strategy and critical business initiatives. Just as breathing indicates that a person is alive, culture is a sign that there is a group of people interacting with each other!

  2. Culture is like the wind – just like wind, you cannot see culture but you can feel its impacts. When you are in a meeting and speak openly about a challenge and your colleagues send glaring sneers in your direction, you feel the impact. You also learn that speaking openly isn’t acceptable. When people are asked to describe culture we often hear that it’s something you can feel when you walk into a place. You experience environmental clues that quickly enable you to feel culture impact even if you can’t put it into words.

Remember, culture is created by experiences that people share and collectively learn from – culture doesn’t change because a leader announces culture change and explains what’s going to be different. People need to hear, see and then do the culture change. For example, one leadership team decided that they wanted to break down silos. They shared that with the departmental leaders and then modeled new behavior by bringing together teams made up of members from each department. They tackled problems together, built relationships across departments and their collective experiences/learning shifted the culture.

Culture is a wonderfully complex yet simple concept. It fascinates us because of the impact it has on everyone’s life. Culture can give employees a place to flourish and bring their best. Culture can also crush employees’ spirits and stifle their imagination. Help people understand the importance of culture by creating an experience they can relate to and remember.

3 Types of Culture

All groups of people, including teams and organizations, have a culture. Culture is accidental or unintentional if you don’t focus on it. Consider the culture of the groups you are part of and determine if they are:

1. Unintentional (accidental):

When no thought or focus is put into creating culture, an unintentional culture emerges. It isn’t good or bad, it’s just not directed to encourage high performance or accomplish organizational goals. During the pandemic, many groups, teams and organizations slid into this category as they focused on surviving. As leaders are looking to thrive during this time of relentless change, we’ve done culture pulse surveys to measure how their culture is reflecting their intentions.

2. Hypocritical:

This is easy to observe in an organization whose collective behavior contradicts the agreed-upon values or norms. Did you know that “integrity” was the stated #1 value of Enron? That is a clear example of hypocrisy! Far too many organizations have pretty values that aren’t lived. To avoid this common mistake, at our company we review one of our values and the supporting behaviors during each team meeting. Then we spend a few minutes talking about how we’ve observed the value being demonstrated. It’s a powerful, reinforcing conversation.

3. Intentional (Purposeful)

This occurs when there is a focused effort to define an ideal culture, then align and manage the culture (which is the team’s values, beliefs and behavioral norms), in support of the organizational goals. We’ve worked with organizations from Guardian Life Insurance and CMMI to NACSA and the Episcopal Church to measure their culture and help the leaders create an intentional culture that honors their purpose, connects to their values and achieves their goals.

If leaders do not become conscious of the cultures in which they are embedded, those cultures will manage them.

Leaders are responsible for creating, maintaining (and sometimes destroying) culture. (This favorite quote is paraphrased from Dr. Edgar Schein’s writing about culture in Organizational Culture and Leadership).

Don’t shirk your leadership responsibility and leave culture to chance. Your team, department or business will have greater levels of achievement and performance when you are intentional about culture.

One of the most important responsibilities of the CEO is to cultivate culture. It’s the multiplication factor in performance. Two organizations with the same ability will have completely different outcomes based on the culture. Systems and processes are important but cannot make up for ineffective culture. Culture is not just the CEO’s responsibility; all leaders are responsible for the culture they are creating.

Steps to Create a Meaningful Culture

Meaning drives motivation. Meaning is one of the intrinsic factors that increase performance. Meaning comes from knowing how you are contributing to something greater than yourself. A meaningful culture requires that a leader connect the HOW (the expected cultural values which capture the beliefs of how to behave) with the WHAT (the work people do each day) and the WHY (a greater purpose.)

The steps to creating meaningful culture are:

1. Know the WHY

Define a clear, compelling purpose.

2. Know the HOW

Define your ideal cultural norms, the beliefs and the behaviors that bring them to life.
  • Gather data. Measure your culture – both ideal and what currently exists.
  • Gather stories to understand the underlying beliefs that drive the behaviors and shape culture.
  • Review the data to understand where there is alignment and where there are gaps. Get clear on the cultural norms required to achieve your purpose and your goals.

3. Know the WHAT

What are the critical actions, tasks and goals? Shockingly, many leaders have limited awareness of the daily work of their teams. It’s critical to know your team members’ priorities, their work, and their challenges. Leaders who can speak to the activity and focus of their teams are better equipped to make the connection identified in step four.

4. Make Connections Between WHY, WHAT, and HOW

People need to understand how the work they do every day is expected to be done in the organization (culture) and how it connects to something greater than themselves (purpose). Tell stories over and over that reinforce this connection. Leaders, please do not shirk your leadership responsibility and leave culture to chance. Your opportunity is to create greater levels of achievement and performance through a meaningful culture.

The ability to perceive the limitations in one’s own culture and to evolve the culture adaptively is the essence and ultimate challenge of leadership.

How to Change Organizational Culture

The core elements of culture change that you must understand are:
  • current culture (the behaviors that are currently expected that guide how people work and interact with each other)
  • subcultures (groups of people within a larger organization who share values, beliefs, behaviors, status, or interests that are different from culture of the organization. For example, finance has a subculture that’s different than the marketing subculture)
  • climate (the visible systems, structures, leadership approaches, etc. that are reinforcing the current culture and mindset)
  • ideal culture (the preferred behaviors of a group or organization to maximize their effectiveness)
  • mindset shift (changing the underlying beliefs and assumptions that create an automatic response or predetermined interpretation of situations)

Our Process for Organizational Culture Transformation

When we do a culture change project, our steps are:
Project Kickoff
Use Acceleration Checklist© – our approach for gathering all the data needed to accomplish the project; define project team roles, communication agreements, etc. review demographics, confirm project timeline, review communication plan.
culture transformation
Communication plan

Develop the communication calendar, messaging and follow-up for the survey.

Launch culture survey to gather quantitative insights.
  • Send initial invitation, and reminder messages. Target 75 – 85% participation rate.
  • Give participants a two-week window to complete the survey.
Focus Groups and Interviews to gather qualitative insights.
  • Select the appropriate participants based on criteria provided.
  • Develop the communication, set up the Zoom link and send out the invitations for the focus groups.
  • Conduct virtual 90-minute, confidential sessions with 6-8 people using a
    proven process for facilitating a discussion without complaints!
  • Post-session translation of notes and follow-up thank you to participants.
  • Executive interviews: 30-minute conversations with each leader.
  • Synthesize all data and connect it to the quantitative survey data for use in developing more robust action plans. Develop a summary report for the leadership team.
  • Create a presentation for the leaders to share with their organizations on insights gathered.
Data analysis
  • Evaluate the data within each demographic category, looking at departments or functions (your subcultures) and across the organization.
  • Obtain additional data as needed.
  • Develop a high-level report to share insights with the leaders and the organization.
Executive Debrief
  • Results debrief of qualitative and quantitative results (includes education, results review and capturing “key learnings”)
Action Planning
  • Design a simple, quick process to develop a prioritized action plan.
  • Participate in a virtual (or in person) facilitation to contribute to the organizational action plan.
  • The outcome of the planning session is definition of a general plan to engage the organization in adjusting current strategies/plans to have a greater impact based on the refined organizational culture and climate understanding.
  • Final conversation with the leadership.
  • Confirm project objectives have been achieved.

The key to successful culture change goes beyond action planning and is all about implementation.

Find out about Culturally Intelligent Change, our unique framework that addresses the people side of change.

How Do You Define Successful Culture Change?

At the beginning of any organizational culture change project, the definition of success must be developed. This establishes a clear vision of the desired future state.

What must happen for the change to deliver its intended outcomes? A change definition answers this question and includes the scope of the change (people, process, behaviors, mindsets, etc.), as well as why the change is required.

A complete definition of success ensures that everyone has a thorough understanding of the outcomes. You must be able to picture the success as vividly as a movie or a memory of an event. Success definition requires imagining the experience of the completed change including the norms and behavior changes.

Here are the three dimensions of a definition of success that creates a clear vision for the future:

1. Results Measured

measure success
This is the typical success definition. It defines how much, by when, and who is doing what. Business results measured may include cost reduction, efficiency improvements or sales growth. It’s critical that this also contains a desired culture description, including the culture norms and the behaviors required for success.

2. Results Experienced

This is a description of success in such a vivid way that everyone who hears it instantly understands and has the same mental, emotional and physical experience of the end state. Imagine a movie trailer that features your project or your goal. Capture that experience in your success definition.

3. Results Sustained

Is success really success if it does not last? For example, you can cut costs in an organization by eliminating the R&D budget. However, when there are no new products and no innovation emerging to support growth, is that successful cost-cutting? Success definitions must include a description of what the sustained results should be and how they will be measured.

It takes time to thoroughly define success, but it’s well worth the effort to ensure all aspects have been considered. It enables culture change plans to be shaped more successfully and paves the way to more fully engage the hearts and minds of everyone impacted by the change.

What is the Difference Between Culture and Climate?

Both organizational culture and climate are essential to understand, but there is a significant difference between them. Climate pays attention to the shared attitudes and perceptions about things like mission, teamwork, and what managers are doing to engage employees. Culture looks a level deeper at the underlying expectations, norms or “unwritten rules” that drive behaviors.

How Do I Accurately Measure Culture?

    • Measurement makes culture tangible. It gives you a baseline to indicate how you’ve improved and where you still need to focus.
    • Measurement of culture is a predictive indicator of success. Financials are a lagging indicator of success.  Both help leaders adjust, but culture metrics bring attention to issues before they get reflected on the financials.

To get a full perspective on culture and climate you must gather BOTH quantitative and qualitative data. The quantitative data is gathered through a survey and qualitative data is collected through interviews and focus groups.

Quantitative Assessment

Identify and understand the current organizational culture and climate using a survey. Many employee surveys do not measure culture. There may be a few questions that relate to culture, but often the assessment actually measures climate.

Selecting a Culture Survey for Qualitative Assessment
  • Find a valid and reliable research-based organizational culture survey tool that is supported by real science, not quirky labels.
  • Make sure there is benchmark data, so you don’t “breathe your own exhaust”.
  • Understand whether you are gathering culture or climate data (ideally, you’ll get both).
  • Ensure the responses are confidential to increase participation and the truthfulness of results.
The tool matters, but the supporting process (applying the data to create meaningful action) matters more. There must be a commitment to both the survey and the essential follow-up conversations. The survey data should be shared with the people who responded to the survey as quickly as possible. Then, work with facilitators to distill the information into an action plan. That produces true value. Ideally the culture survey will provide insight into subcultures, especially the subcultures of the change targets. Dr. Edgar Schein observed that there are four categories of culture:
  1. Macro Cultures (national or societal culture)
  2. Organizational Cultures
  3. Subcultures (groups within organizations)
  4. Microcultures (microsystems within organizations)
By gathering quantitative culture data first, you will have objective information about the current culture that allows a more precise understanding of how much change management is needed. Further, it increases the trust of senior leaders who may discount internally gathered qualitative data. Using an external survey instrument focuses the attention on the results of the responses versus challenging the survey’s validity. It is also important to note that a quantitative survey enables an organization to establish a baseline and measure their progress over time.

Qualitative Assessment

Qualitative data helps tell the story behind the quantitative data. It can be gathered through interviews, focus groups, observation, customer surveys (where appropriate), and other internal research.

Qualitative data provides a fuller understanding than quantitative data alone. Leaders can draw erroneous conclusions from survey data when they miss the context from qualitative data.

Quantitative and qualitative data together create the complete picture to build a common language and understand how culture can be used as a lever to accelerate change. This juxtaposition of data also provides insight into potential culture impediments along the journey of change.

Tips on Organizational Culture

  • The stronger and clearer your culture, the easier it is to attract and retain the right people. Skills and experience matter, but bad fit trumps a good background. Imagine the hours of time saved when the right people are drawn to your organization because they understand that they are a fit.

  • Culture should never be the sole focus, it exists to support strategy. Strategy tells you what, when and where, while culture addresses who and how. But even a clearly defined strategy is insufficient without understanding the cultural strengths you have and the cultural forces within your business. Use the power of your company’s cultural strengths as an enduring advantage to fuel your strategy’s success.

The purpose of a company is not to create a nice workplace culture but to function in the economy, to provide goods and services. Once you’ve got that concept that we’re in this-and-this business, then you want to design a workplace culture that optimizes fitting that business

  • Culture causes behaviors which create results. It is more than purpose or organizational values. Purpose matters – it’s VERY important to understand the bigger “why”. Values matter – it’s critical to define how to behave. However, neither can take the place of culture.

  • Culture never quits. It’s like eating or sleeping, it requires continuous focus or maintenance to be at your best. Just as vision leaks, culture gets fuzzy if leaders don’t remain focused.

  • Build on strength – it’s easier to look for what’s working and build on it than to start over. Dishonoring the past alienates the future. So, work to build bridges between what was and what could be. Bridges are built on strengths.

Recommended Resources to Learn More About Culture

We’ve often been asked how to learn more on the topic of culture. So, here are some of our favorite resources, in no particular order:
  • Hit Refresh: The Quest to Rediscover Microsoft’s Soul and Imagine a Better Future for Everyone. This is a fascinating book by Satya Nadella. Discover the current Microsoft CEO’s story of change and corporate reinvention. He makes the case that job No. 1 for a CEO should be to curate the company’s culture.

  • Dr Edgar Schein. In graduate school, Schein’s book Organization Culture and Leadership radically redefined Donna’s views on leadership and change. He is a former professor at the MIT Sloan School of Management, and he has been a defining voice in organizational culture. He’s written lots of fabulous books including the latest – Humble Inquiry and Humble Consulting.

  • – Scott was a contributing author for Build the Culture Advantage, Deliver Sustainable Performance with Clarity and Speed. That book led to the creation of Culture University, where both Scott and Donna are contributing writers. Check out Dr. Schein’s video, sharing nine important culture insights.

  • Uncontainable: How Passion, Commitment, and Conscious Capitalism Built a Business Where Everyone Thrives. Learn firsthand from a CEO who has demonstrated excellence and cultural integrity for decades. Kip Tindell shares his leadership journey and how it shaped the sustained success of the Container Store.

  • – Catch up on presentations from past Ultimate Culture Conferences and check out Tim Kuppler’s article, 5 Ultimate Culture Insights from Top Culture Pioneers and Progressive Leaders.
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