What is culture?

It’s like your business’s personality, based on a set of:

• assumptions
• values
• beliefs.

Some of these may be explicit. Others may be norms people just sense or know.

Why is it important?

Getting your culture right helps to:

• build and increase competitive advantage
• attract and keep the people your business needs
• create a sense of belonging
• make people feel good about working with you
• show people what’s expected
• motivate people to perform better at their jobs.

Work culture is dynamic. Many small business cultures develop organically. It’s often set in the early days by whoever starts the business — most of the time without even realising.

But your culture will need to change as you take on different goals, and it’s up to you to set it.

What affects culture?

Your culture is influenced by:

• You — how you manage and the leadership styles you use. 
• Your behaviours and your values.
• Your roots — how your company came about (and your founder’s values and leadership style, if it wasn’t you).
• Your industry, regulations and competitors.
• Your business environment, eg how technology is advancing, how much competition you have and how you react to your business environment.
• Your short-term business goals.
• Where your business is heading long-term.
• How your workspace is organised.
• Who you hire.

Most businesses lean towards one of four cultures. These may be people or process led — or have an equal mix of both.

In people-focused cultures, employees care deeply about their workmates and clients or customers. They’ll go the extra mile for each other and are likely to build friendships which extend outside work hours.

In process-driven cultures, people focus less on making friends, and more on getting the job done. In these cultures, people are happy to work towards a common goal, if there’s something in it for them.

Being people-focused or process-driven is neither good nor bad. You may need to dial one or the other up or down, based on what’s happening in the market, who’s on your team and what your business is trying to achieve.

Think about which of these four most closely describes your workplace culture:

1. Networked – high people, low process

In networked cultures people frequently stop and chat. They share lunch, in jokes and often act like family, socialising outside work.

Works well when:

• Employees rely on one other, eg when your business depends on sharing knowledge.
• During difficult times, eg when you’re trying to get a new site off the ground and are hitting constant roadblocks, as it helps boost morale. 

Pros

• Constant discussion is good for teamwork and generating ideas.
• People are prepared to put up with frustrations, and will go the extra mile because their colleagues are friends.
• People are more likely to tackle and solve major problems without being asked.
• Ideas flow as people are less likely to feel worried about saying the wrong thing.
• Because people feel a sense of belonging, they’re less likely to want to leave.

Cons

• Networked cultures can become political and cliquey, making it difficult for new people to feel they belong.
• People can end up on projects through friendship, not merit.
• Because people are wary of hurting each other’s feelings they may avoid giving constructive feedback and poor performance can go unnoticed.
• People may not follow process, relying on friendship instead.
• If someone does leave, others often follow.

2. Go-getting — low people, high process

In go-getting cultures people aren’t there to make friends. People compete directly and openly with one another, and draw clear lines between their work and social lives. They may enjoy banter, but conversations are business related or motivated by trying to get ahead.

Works well when: You’re in a competitive industry, eg you might want this type of culture in a sales team, especially if the industry is fast paced and revenue hard to come by.

Pros

• People will get behind your company goals if they stand to benefit, eg a share of the profit if your company meets its KPIs.
• People know if they perform well they’ll get what they deserve. This builds trust and can be very motivating.
• People who underperform will expect to be taken to task.
• People can still work well together despite personal differences.

Cons

• People may avoid doing tasks that don’t have a personal reward.
• Because people are highly competitive, they may be reluctant to share information and be territorial about their jobs. This makes it harder to be creative.
• In extreme cases, the dog-eat-dog mentality isn’t much fun.
• Established workers are unlikely to help new workers come on board unless it benefits them personally.

3. Communal — high people, high process

People in communal cultures live and breathe the business. Many start-ups have this type of culture, eg close friends who have equity in the business, common interests and spend a lot of time with each other inside and outside work. 

Communal cultures are driven by strong values. Employees trust their leaders and think they’re fair. Risks and rewards are often shared between employers and employees.

Competition is usually front of mind. It drives people to achieve as much as the business’s own mission. People are friends, but can still be frank with each other.

Works well when:

• You need people to rally around a singular, shared goal, eg getting a specific product to market.
• When it’s important to share information, and have cross-functional teams.

Pros

• People live and breathe the company mission. 
• People support each other.
• Team work thrives.
• Turnover is usually very low.

Cons

• This culture needs a strong leader. If a leader leaves it can fall apart.
• It’s hard to focus on people and process equally, so it can be hard to sustain. 
• When people are too similar and tight-knit, they can hesitate to take initiative and think for themselves.
• If one employee leaves others may follow.
• It can be difficult to integrate new employees and implement change.

4. Fragmented — low people, low process

Nobody sets out to have a fragmented culture but, like dysfunctional families, they can be a fact of life.

In fragmented cultures, people don’t trust each other. They have their own agendas and keep information close to their chests. Businesses that have restructured may end up becoming fragmented.

Fragmented cultures can work when:

• People can work on their own and want to keep their home lives separate, eg freelance writers, estate agents, or people making crafts from home.
• People are motivated and skilled and need little supervision.
• There isn’t a lot to be learned from each other.

Your culture may need to change over time, eg when there’s a shift in the market, after a growth period, if performance is becoming an issue, or as new goals become important.

Cultures can take time to turn around. But there are ways to focus more on people or process.

More people-focused

• Recruit people who are likely to develop friendships.
• Arrange get-togethers inside and outside work, eg shared lunches, outings to fun and interesting places. 
• Arrange your workspace so it’s easier to mingle.
• Relax your dress code so people feel more sociable and relaxed.
• Don’t have too many managers.
• Share the same workspace as your staff. 
• Model being kind and generous.

More process-driven

• Create a sense of urgency, eg make meetings about action, make mission statements action oriented.
• Have regular briefings on what’s happening with the competition.
• Stimulate the will to win, eg recruit motivated people, celebrate success publicly, reward good performance.
• Promote shared goals — create a sense of one company, one vision.

Cultural champions

Ask cultural champions to positively influence the team. For example, if an employee is good at putting customers at ease, team them with someone who is more awkward. If someone is safety conscious, pair them with people more likely to take risks.

Start building a culture that supports your business goals with these five steps:

1. List your business goals for the next 2–5 years.
2. Think about what you need to change about your business to achieve them.
3. Consider your existing culture and what you value, eg your excellent health and safety record, your creativity.
4. Decide which culture best supports your goals.
5. List the steps you could take to move towards this kind of culture, eg relaxing your dress code, introducing friendly competition.