Most words aren’t precise, but they’re useful. The phrase “company culture” is often neither.
Company culture is frequently an ambiguous term, leaving leaders with a burden of importance but no practical direction. Attempts to define it usually sound like, “it’s our personality” or “it’s how we do things and what we care about,” or even more abstract, “it’s our collective identity.”
Most leaders recognize that a healthy company culture is important to business success because it positively impacts organizational drivers like employee retention, productivity, and brand awareness. Deloitte research found that over half of business leaders rate culture, engagement, and retention as urgent priorities. Yet despite recognizing the importance of company culture, most leaders don’t know how to translate that priority into action.
For a more useful definition, let’s think of it this way:
Company culture is the ongoing expression of a company’s values through its artifacts. An artifact is any memorable event or object that is created by any member of the company.
Some company artifacts are physical, such as building architecture, bean bag chairs, or a placard in the lobby. Many artifacts are less concrete — a benefit policy, a logo design, company lore about something the CEO did, or a culture video.
All artifacts send a value statement — they say something about what you value or how you do business. Take a physical office environment for example–imagine walking into a company with an open floor environment, glass walls, ping pong tables, and a golden retriever. Each of those physical items are artifacts which send a message: this company values openness, creativity, fun, and friendship. Or consider the letter from a chairman who, in response to an employee’s terribly nonsensical and harmful behavior, praises his employees for “following protocol and regulation.” That memorable letter from United Airlines is an artifact that sent a clear statement—we value protocol over common sense and company values here.
As a positive example, consider a quirky artifact from Zappos. They offer a $4,000 quitting bonus during new hire training for incoming employees to leave the company. This sends a clear value statement—we want you to be here because you want to be here, not just for the money. Once Amazon purchased Zappos, Jeff Bezos (Amazon’s CEO) adopted this policy too because, “The goal is to encourage folks to take a moment and think about what they really want… In the long-run, an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company.”
You create company culture by creating artifacts.
Think about your own artifacts—what messages are you sending, and are they true to your company values?
Here’s the exciting (or scary) part—every employee in your company creates artifacts. When you hire someone, you haven’t just invited them to “join” or “fit” your culture. You’ve asked them to add to it—to create artifacts that influence your culture. As a general rule, they’re going to create artifacts that represent what they naturally value. For example, if you hire a high performing sales person who values performance and recognition over telling the truth, you should expect them to create some artifacts that reflect their natural priorities. If you want a culture of honesty, this hiring decision is going to inevitably result in value statements that are inconsistent with your culture. Therefore, interviewing for culture is critically important and whoever directs the hiring decisions directs the culture.
Interestingly, artifacts beget similar artifacts. For example, if your senior leadership team consistently praises employees who are willing to push boundaries to find innovative solutions, then you have a series of artifacts (memorable events of praise) that are sending a clear message — entrepreneurial, innovative people are safe here. As a result, it wouldn’t be surprising for a savvy product manager, seeing the consistent reward for innovation, to start experimenting with new product branding, resisting approval policies that slow his division down, and encouraging his own team to be creative.
In addition, some artifacts carry more weight than others. Here’s the formula:
[Weight of an Artifact = Authority of the Creator X Positivity (or Negativity) X Publicity].
For good leaders, this is great news. They have the power to change a culture unlike anyone else in an organization. If they intentionally lean in, they will make an impact. It also means that they carry a hefty responsibility. Imagine an automotive CEO (high authority) responding to the news coverage (high publicity) that some of their brake lines are faulty. The brake line failure itself is a negative artifact—it is public evidence that the company failed to fulfill its core values of excellence and precision. If the CEO responds by owning the problem, immediately taking action, and personally addressing public concerns, that response itself will be a positive artifact. And while it won’t fully offset the immediate PR firestorm, it will send a message of integrity that will likely influence the culture for years.
Lastly, it is important to understand that artifacts accumulate. While a leader’s artifacts carry more weight than others, the majority of artifacts in a company are actually produced by employees and accumulate over time. Changing the culture for a young organization is relatively easy because it only takes a few artifacts from any employee to shift the culture. Hence, it’s vital to get your first hires right. This notion of accumulation also explains why changing the culture of an older company is so difficult — there is such a preponderance of established artifacts that it’s going to require a LOT of new ones to make an impact.
If a leader wants to create, reinforce, or direct their own company’s culture, how can they translate this definition into practical guidance? Here are four actionable suggestions:
1. Be clear on your values.
Artifacts express your company values. If you don’t know what you value, you will create a culture without clear identity or depth to it. Therefore, the first step is to make sure that you know what you really care about.
2. See the gaps.
Determine which values are not being lived out in your company on a daily basis. For example, if you say you value innovation, but all your policies reinforce the status quo, that is a gap. If you want a culture of candor, but your meetings lack any disagreement, that is a gap.
3. Start intentionally creating good artifacts and destroying bad ones.
Once you know what you value and you see the gaps, start creating artifacts and enlisting others to do the same. Think creatively. Even the public destruction of existing artifacts could send a powerful message. Consider a new CEO who duct-taped his executive office door to the front of his company cafeteria —he wanted to start eliminating the hierarchical culture by letting every employee to know that he had an open-door policy.
4. Hire and retain the people who value what you value.
Hiring is the single most important lever for shifting company culture, because every employee creates artifacts. Ask yourself the question, “Are we clear on our company values, and are we successfully attracting, finding, selecting, and retaining people who innately reflect those values?” If there’s a gap, this is one of the most important gaps to address.
Most business leaders recognize that creating a successful company culture is important. Unfortunately, the topic is typically so abstract and subjective that they don’t know how to affect change. By defining company culture as the ongoing expression of company’s values through its artifacts, business leaders now have a useful framework to help them more effectively understand, cultivate, and direct their own culture.