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Six Components of a Great Corporate Culture

by John Coleman | 3:00 PM May 6, 2013

The benefits of a strong corporate culture are both intuitive and supported by social science.According to James

L. Heskett,culture can account for 20-30% of the differential in corporate performance when compared with

culturally unremarkable competitors. And HBRwriters have offered advice onnavigating different geographic

cultures,selecting jobs based on culture,changing cultures,andoffering feedback across cultures,among

other topics.

But what makes a culture? Each culture is unique and myriad factors go into creating one, but Ive observed at

least six common components of great cultures. Isolating those elements can be the first step to building a

differentiated culture and a lasting organization.

1. Vision:A great culture starts with a vision or mission statement. These simple turns of phrase guide a

companys values andprovide it with purpose.That purpose, in turn, orients every decision employees make.

When they are deeply authentic and prominently displayed, good vision statements can even help orient

customers, suppliers, and other stakeholders. Nonprofits often excel at havingcompelling, simple vision

statements.The Alzheimers Association, for example, is dedicated toa world without Alzheimers.And Oxfam

envisionsa just world without poverty.A vision statement is a simple but foundational element of culture.

2. Values:A companys values are the core of its culture. While a vision articulates acompanys purpose,

values offer a set of guidelines on the behaviors and mindsets needed to achieve that vision. McKinsey &

Company, for example, has aclearly articulated set of valuesthat are prominently communicated to all

employees and involve the way that firm vows to serve clients, treat colleagues, and uphold professional

standards. Googles values might be best articulated by their famous phrase,Dont be evil.But they are also

enshrined in theirten things we know to be true.And while many companies find their values revolve around a

few simple topics (employees, clients, professionalism, etc.), the originality of those values is less important

than their authenticity.

3. Practices:Of course, values are of little importance unless they are enshrined in a companys practices. If

an organization professes, people are our greatest asset, it should also be ready to invest in people in visible

ways. Wegmans, for example, heraldsvalues like caring and respect,promising prospectsa job [they'll]

love.And it follows through in its company practices, ranked by Fortune as thefifth best company to work for.

Similarly, if an organization values flat hierarchy, it must encourage more junior team members to dissent in

discussions without fear or negative repercussions. And whatever an organizations values, they must be

reinforced in review criteria and promotion policies, and baked into the operating principles of daily life in the

firm.

4. People:No company can build a coherent culture without people who either share its core values or possess

the willingness and ability to embrace those values. Thats why the greatest firms in the world also have some

of the most stringent recruiting policies. According to Charles Ellis,as noted in a recent reviewof his bookWhatit Takes: Seven Secrets of Success from the Worlds Greatest Professional Firms ,the best firms are fanatical

http://blogs.hbr.org/cs/2011/12/what_great_companies_know_abou.htmlhttp://blogs.hbr.org/cs/2011/12/what_great_companies_know_abou.htmlhttp://blogs.hbr.org/cs/2011/12/what_great_companies_know_abou.htmlhttp://blogs.hbr.org/cs/2011/12/what_great_companies_know_abou.htmlhttp://blogs.hbr.org/cs/2013/03/when_crossing_cultures_use_glo.htmlhttp://blogs.hbr.org/cs/2013/03/when_crossing_cultures_use_glo.htmlhttp://blogs.hbr.org/cs/2013/03/when_crossing_cultures_use_glo.htmlhttp://blogs.hbr.org/cs/2013/03/when_crossing_cultures_use_glo.htmlhttp://blogs.hbr.org/cs/2012/05/when_choosing_a_job_culture_ma.htmlhttp://blogs.hbr.org/cs/2012/05/when_choosing_a_job_culture_ma.htmlhttp://blogs.hbr.org/cs/2012/05/when_choosing_a_job_culture_ma.htmlhttp://blogs.hbr.org/cs/2012/12/to_change_the_culture_stop_try.htmlhttp://blogs.hbr.org/cs/2012/12/to_change_the_culture_stop_try.htmlhttp://blogs.hbr.org/cs/2012/12/to_change_the_culture_stop_try.htmlhttp://blogs.hbr.org/cs/2013/02/giving_feedback_across_cultures.htmlhttp://blogs.hbr.org/cs/2013/02/giving_feedback_across_cultures.htmlhttp://blogs.hbr.org/cs/2013/02/giving_feedback_across_cultures.htmlhttp://bigthink.com/experts-corner/purpose-as-a-compasshttp://bigthink.com/experts-corner/purpose-as-a-compasshttp://bigthink.com/experts-corner/purpose-as-a-compasshttp://topnonprofits.com/examples/vision-statements/http://topnonprofits.com/examples/vision-statements/http://topnonprofits.com/examples/vision-statements/http://topnonprofits.com/examples/vision-statements/http://www.alz.org/about_us_about_us_.asphttp://www.alz.org/about_us_about_us_.asphttp://www.alz.org/about_us_about_us_.asphttp://www.oxfam.org/en/about/what/purpose-and-beliefshttp://www.oxfam.org/en/about/what/purpose-and-beliefshttp://www.oxfam.org/en/about/what/purpose-and-beliefshttp://www.mckinsey.com.ar/our_work_belive.asphttp://www.mckinsey.com.ar/our_work_belive.asphttp://www.mckinsey.com.ar/our_work_belive.asphttp://en.wikipedia.org/wiki/Don't_be_evilhttp://en.wikipedia.org/wiki/Don't_be_evilhttp://en.wikipedia.org/wiki/Don't_be_evilhttp://www.google.com/about/company/philosophy/http://www.google.com/about/company/philosophy/http://www.wegmans.com/webapp/wcs/stores/servlet/CategoryDisplay?storeId=10052&identifier=CATEGORY_1341http://www.wegmans.com/webapp/wcs/stores/servlet/CategoryDisplay?storeId=10052&identifier=CATEGORY_1341http://www.wegmans.com/webapp/wcs/stores/servlet/CategoryDisplay?storeId=10052&identifier=CATEGORY_1341http://www.wegmans.com/webapp/wcs/stores/servlet/CategoryDisplay?storeId=10052&catalogId=10002&langId=-1&identifier=CATEGORY_533http://www.wegmans.com/webapp/wcs/stores/servlet/CategoryDisplay?storeId=10052&catalogId=10002&langId=-1&identifier=CATEGORY_533http://www.wegmans.com/webapp/wcs/stores/servlet/CategoryDisplay?storeId=10052&catalogId=10002&langId=-1&identifier=CATEGORY_533http://www.wegmans.com/webapp/wcs/stores/servlet/CategoryDisplay?storeId=10052&catalogId=10002&langId=-1&identifier=CATEGORY_533http://money.cnn.com/magazines/fortune/best-companies/2013/snapshots/5.html?iid=bc_sp_listhttp://money.cnn.com/magazines/fortune/best-companies/2013/snapshots/5.html?iid=bc_sp_listhttp://money.cnn.com/magazines/fortune/best-companies/2013/snapshots/5.html?iid=bc_sp_listhttp://www.economist.com/news/business-books-quarterly/21576071-lessons-leaders-simply-besthttp://www.economist.com/news/business-books-quarterly/21576071-lessons-leaders-simply-besthttp://www.economist.com/news/business-books-quarterly/21576071-lessons-leaders-simply-besthttp://www.amazon.com/What-It-Takes-Greatest-Professional/dp/1118517725http://www.amazon.com/What-It-Takes-Greatest-Professional/dp/1118517725http://www.amazon.com/What-It-Takes-Greatest-Professional/dp/1118517725http://www.amazon.com/What-It-Takes-Greatest-Professional/dp/1118517725http://www.amazon.com/What-It-Takes-Greatest-Professional/dp/1118517725http://www.amazon.com/What-It-Takes-Greatest-Professional/dp/1118517725http://www.economist.com/news/business-books-quarterly/21576071-lessons-leaders-simply-besthttp://money.cnn.com/magazines/fortune/best-companies/2013/snapshots/5.html?iid=bc_sp_listhttp://www.wegmans.com/webapp/wcs/stores/servlet/CategoryDisplay?storeId=10052&catalogId=10002&langId=-1&identifier=CATEGORY_533http://www.wegmans.com/webapp/wcs/stores/servlet/CategoryDisplay?storeId=10052&catalogId=10002&langId=-1&identifier=CATEGORY_533http://www.wegmans.com/webapp/wcs/stores/servlet/CategoryDisplay?storeId=10052&identifier=CATEGORY_1341http://www.google.com/about/company/philosophy/http://en.wikipedia.org/wiki/Don't_be_evilhttp://www.mckinsey.com.ar/our_work_belive.asphttp://www.oxfam.org/en/about/what/purpose-and-beliefshttp://www.alz.org/about_us_about_us_.asphttp://topnonprofits.com/examples/vision-statements/http://topnonprofits.com/examples/vision-statements/http://bigthink.com/experts-corner/purpose-as-a-compasshttp://blogs.hbr.org/cs/2013/02/giving_feedback_across_cultures.htmlhttp://blogs.hbr.org/cs/2012/12/to_change_the_culture_stop_try.htmlhttp://blogs.hbr.org/cs/2012/05/when_choosing_a_job_culture_ma.htmlhttp://blogs.hbr.org/cs/2013/03/when_crossing_cultures_use_glo.htmlhttp://blogs.hbr.org/cs/2013/03/when_crossing_cultures_use_glo.htmlhttp://blogs.hbr.org/cs/2011/12/what_great_companies_know_abou.htmlhttp://blogs.hbr.org/cs/2011/12/what_great_companies_know_abou.html

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about recruiting new employees who are not just the most talented but also the best suited to a particular

corporate culture.Ellis highlights that those firms often have 8-20 people interview each candidate. And as an

added benefit,Steven Hunt notesat Monster.com that one study found applicants who were a cultural fit would

accept a 7% lower salary, and departments with cultural alignment had 30% less turnover. People stick with

cultures they like, and bringing on the right culturecarriers reinforces the culture an organization already has.

5. Narrative:Marshall Ganzwas once a key part of Caesar Chavezs United Farm Workers movement and

helped structure the organizing platform for Barack Obamas 2008 presidential campaign. Nowa professor at

Harvard,one of Ganzs core areas of research and teaching isthe powerof narrative.Any organization has a

unique history a unique story. And the ability to unearth that history and craft it into a narrative is a core

element of culture creation. The elements of that narrative can be formal like Coca-Cola, which dedicated an

enormous resource tocelebrating its heritageand even has aWorld of Coke museumin Atlanta or informal,

like those stories about howSteve Jobs early fascination with calligraphyshaped the aesthetically oriented

culture at Apple. But they are more powerful when identified, shaped, and retold as a part of a firms ongoingculture.

6. Place:Why doesPixar have a huge open atriumengineering an environment where firm members run into

each other throughout the day and interact in informal, unplanned ways? Why does Mayor Michael Bloomberg

prefer his staff sit in abullpenenvironment, rather than one of separate offices with soundproof doors? And

why do tech firms cluster in Silicon Valley and financial firms cluster in London and New York? There are

obviously numerous answers to each of these questions, but one clear answer is that place shapes

culture.Open architectureis more conducive to certain office behaviors, like collaboration. Certain cities and

countries have local cultures that may reinforce or contradict the culture a firm is trying to create. Place

whether geography, architecture, or aesthetic design impacts the values and behaviors of people in a

workplace.

There are other factors that influence culture. But these six components can provide a firm foundation for

shaping a new organizations culture. And identifying and understanding them more fully in an existing

organization can be the first step to revitalizing or reshaping culture in a company looking for change.

More blog posts byJohn Coleman

More on:Organizational culture

JOHN COLEMAN

John Coleman is a coauthor of the book,Passion & Purpose: Stories from the Best and Brightest Young Business Leaders.

Follow him on Twitter at@johnwcoleman.

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The Two-Minute Game that Reveals How People Perceive You

The Surprising Secret to Selling Yourself

What Is Organizational Culture? And Why Should We Care?

Is Corporate Culture Still Important?

Creating and Sustaining a Winning Culture

What Great Companies Know About Culture

WHAT ARE THE COMPONENTS OF THEORGANIZATIONAL CULTURE

Behaviors and artifacts Values Assumptions for

success ------------- or -------------------- - PhysicalEnvironment - Customs and Norms - Ceremonies and

Events - Rules & PoliciesGoals

& Measurements - Management Behaviour -Rewards & Recognition - Learning &Development - Communication & Collaboration -

Operational Structure (source: M-PRO.ca) Organizational Culture is defined as widely shared

values within an organization that provide unity and

cooperation to achieve common goals. Organizational

culture would also be assumptions, beliefs,

symbols, artifacts, company logo and the list

goes on. Is it easy to change a company'sculture? ah yes would someone like to tell me? WHAT ARE THE COMPONENTS OF CULTURE

ArtHistoryClothingReligionFood /CuisineTraditionsEconomic / Trade Practices

HOW IS ORGANIZATIONAL CULTURE

EFFECTS ORGANIZATIONAL

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The organizational culture effects the organization.

every organization have there on cultures like take the

example from America the companies don't thinks

that the creation of meeting environment is

The organizational culture effects the organization.

every organization have there on cultures like take the

example from America the companies don't thinks

that the creation of meeting environment is

necessary they believes that meeting can be arrange at

everywhere if you are in the park, car parking or incorridor you can discuss the business related issues

anywhere so these kind of culture

Americans have but the British organizations are

totally different they thinks that or they believes that

to discuss the business issues there should be an

environment for meeting there should be

silence and and everything should be according to

your business so this is the organizational

environment. Also in terms of different cultures

Americans are very direct and get to the point very

quickly when making a business deal there are not up

for making small talk or particularly getting to knowyou. Americans know how to get what they want and

manipulate who they have to to get it.

Did we answer your question?YES

NO

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