Take Two: Defining Culture

Let’s start at the beginning. What is organizational culture?

AMANDA SARGENT: At its most granular stage, organizational culture is “the way things are here” — the assumptions, values and beliefs people share when they become part of an organization. In the classroom, I compare it to the human body: The hierarchy, policies and processes are the bones, while the culture is the fleshy, substantive matter that identifies who or what the organization is and stands for.

DEBBIE MILLIN: To build on that, I think of culture as the soul of the company. Companies need to not only decide what they’re going to do, but who they’re going to be. And, for employees, how do you want it to feel to work there?

How does a strong workplace culture impact employees and customers?

DM: Keep a focus on the triple bottom line— happy shareholders, happy employees and happy customers. They very much feed off each other. A culture of inclusion and engagement breeds innovation and leads to better performance and profitability. A good key performance indicator to watch for innovation is employee engagement.

AS: Culture absolutely predicts all kinds of KPIs and performance metrics. There are many ways to describe and classify an organization’s culture. For example, a “clan” culture has been described as having a family-like feel, which tends to be related to outcomes like employee satisfaction and organizational commitment. Cultures described as “inclusive” have also been shown to drive those factors while simultaneously creating a sense of belonging, which can boost employee engagement. Market cultures, focused more on competition, have been shown to be predictive of innovation and financial performance. Most organizations have a mix of these dimensions in their cultures depending on their goals and objectives. 

What role does leadership play when it comes to cultural strategy?

AS: Leaders are the holders and the executors of organizational culture; it’s their job to help employees understand how to integrate into the culture and guide their work and behavior inside the organization.

DM: Leaders set the tone with the direction of the organization — not just from the business side, but also from a culture perspective on aspects like core values. But it’s also very important to get feedback from employees so it’s not just top down. The underlying piece is to share core values and then invite other cultures and perspectives so that everybody is really connected. It helps create one cohesive unit. This is particularly important for global companies and those with a fully remote or hybrid approach.

What does an inclusive culture look like?

AS: Data supports the notion that diverse and inclusive climates are important for organizational and individual outcomes. Inclusive organizations tend to attract and retain top diverse talent, which enables competitive advantage. And that’s aside from the idea that it’s the right thing to do to honor, celebrate and appreciate the things that make a person unique. Inclusive cultures have also been positively associated with greater psychological health and well-being of employees.

DM: A major aspect is the connectedness of your team — presenting opportunities for people to work together on work-related projects, but also to create mini-communities based on personal or cultural interests. When you have a diverse group of people, there’s an opportunity for more voices to be heard.

How does remote or hybrid work create challenges for a strong company culture?

DM: One of the biggest challenges for any company comes down to communication. It’s always a work in progress, no matter what your structure is. But when you have either a hybrid or remote situation, that becomes even more evident. Global companies need to be mindful of time zones and cultural holidays, for example. Make sure that everyone understands how their pieces fit and have systems in place to support them in doing their job. The shift to more cloud-based workspaces has helped create a more efficient and successful remote workflow.  

AS: The post-pandemic world looks different in all aspects, but from a work perspective it revealed a need to be more intentional when shifting from in-person to remote communication. Recommendations from top researchers, for example, suggest simple efforts like turning your camera on during a Zoom meeting adds to the richness of the connection. While the advent of hybrid work has introduced challenges to creating and maintaining strong culture, some studies suggest that certain groups may feel more included and better able to effectively perform their jobs in hybrid or remote modalities where they can work with tools and from environments that are more tailored to their specific needs. 

Which organizational culture trends are affecting today’s workforce?

DM: There are three trends I see companies doing well. One is flexibility, particularly regarding hybrid and remote work. Today, employees expect some level of flexibility, and that can mean different things at different companies and at different levels of your career. The second is the ability to connect doing good business with doing good in the world. Employees want to be part of a mission: The company itself could be mission-based or it could be that there’s a culture that presents opportunities for employees to opt in to mission-based projects that appeal to them. And the third is being thoughtful about ways to connect in person and remotely.

AS: I am seeing organizations that strive to be more inclusive putting more of an emphasis on creating cultures that promote psychological safety as well as putting intention into how they’re designing policies, processes and practices to create space for employees to share their whole selves without fear of backlash, criticism, discrimination or implicit bias. In service of creating more inclusive cultures, listening to employees is critical. Companies may not always like what they hear, but that’s where it becomes important to enact a growth mindset: Creating and maintaining positive work cultures is an ongoing endeavor. By recognizing what may or may not be working for our people today, we have the opportunity to create an even better tomorrow.

Interviews have been edited and condensed.