How to Create and Change Company Culture

Updated: Mar 10

Creating and managing corporate culture may be one of the hardest things in building a successful business. It's something that is sort of vague and hard to define but everyone agrees has a massive impact on the performance of the business. Not only is it important for the bottom line, its important for recruiting top talent. Nearly every person you interview to join your team will ask directly or indirectly about the culture of the company or state company culture as a driving factor in choosing their next position.


Often times, senior management teams will sit down during a one day retreat and come up with 10 or so core tenets of the business and call that their company culture. They will likely come up with things that are insanely obvious like "Act with Integrity" or "Committed to Honesty". Would anyone really disagree with those or say the opposite? The challenge is not in coming up with 10 ideas that sound good. The challenge is in turning that one-day brainstorming session into action and not just a company-wide email and a plaque in the breakroom.


Think to yourself about the core values of your business. You'll probably come up with something like "Collaborative". That's a great one! But, how is collaboration being rewarded or encouraged in your day to day business? When is the last time a team member was rewarded in some way for being collaborative? Actions speak louder than words, especially in building a company culture.


Managing and manipulating culture is simple, yet extremely difficult. It's all about which behaviors are reinforced and which are punished. Behaviors that are reinforced will be pervasive and behaviors that are punished will be eradicated over time. These are the basic ideas behind Operant Conditioning. It sounds easy but it takes active management.


You may be reinforcing or punishing behaviors unintentionally. At a previous job, we had a sales gong which we would bang every time we closed a new customer. At first, everyone loved it. It was a simple easy way to provide public praise and the team could see (or hear) real growth and progress being made. One day, the gong rang and the CEO came out of his office to congratulate the salesperson. Instead of a quick "good job", he slammed the salesperson for structuring the deal the way he did. This happened on a couple of other occasions as well. Shortly after, the gong stopped ringing forever. People actually became afraid to close deals for fear of the CEO not approving of them.


Culture starts from the top and works its way down through the organization. Therefore, the CEO is the largest driver of company culture. They are in direct control of what behaviors are reinforced and punished. They get to choose their senior management team and develop the plan of attack strategically. The team that the CEO surrounds themselves with tells a lot about the culture of the company and are also big contributors individually to culture.


Promoting, hiring, and firing are the largest drivers for culture building. Whether you realize it or not, this informs all employees what your company values. When a person gets promoted or hired, the company is saying, "these are the qualities we value in an employee" and the team will emulate those qualities. And when a person gets fired, the company is saying, "these are the qualities we don't care about or don't care for".


Sometimes, you have to fire your most talented team members for the greater good of the team. As Gary Vaynerchuk says, the best way to create culture is through firing and you might need to fire your most talented employee. See Antonio Brown as an example.


Unfortunately, this is all based on perception. It's the reason why a few bad apples can still spoil the bunch. This is why it takes so much effort to manipulate company culture. You have to get a really good understanding of the ground-level truth when it comes to reputations and perceptions in the organization. The only way to do that is to have open and honest lines of communication throughout the whole company. It's why being trustworthy and honest is the first key to a solid culture.


There is no quick fix to company culture. At the end of the day, it takes intentional focus on culture to change it and that means a concerted effort to reinforce the behaviors you value. Implementing this strategy won't have immediate effects, but over time, you'll see changes in the way your team works.

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