The landscape is changing rapidly around companies and their employees. The power base has shifted and employees are now in a position to expect more from their employers – not necessarily more pay, but more support, and better governance. They expect a company to show up, have positive and authentic values, show respect and develop a culture that is healthy for them and their fellow workers.
Company culture has changed beyond recognition since it first evolved in 1790, when it was one of servitude with almost no communication between the top and bottom of the organisation. In the early 1980s corporate culture was used by managers and academics to describe a company’s character. Following the first and second world wars, companies started to become more inclusive towards women and minorities and communication channels cotinued to improve. Most recently, the main values employees look for in an organisation are social impact, flexibility, inclusion and diversity. Other values which companies have adopted include environmental responsibility, corporate social responsibility and more focus on employee health.
Company culture can simply be described as ‘the way we do things around here’. It influences the way employees and management interact. The values and behaviours adopted and exhibited by the people in an organisation come to shape the culture. Some of the visible contributors to culture are office hours, employee benefits, hiring, promotion and firing decisions and, client management, company operations, dress code, office environment, degree of hierarchical structure and many other tangible elements. Most importantly, the culture of an organisation is shaped by its leaders, past and present.
However, the shift in what is important in company culture has altered significantly in the past couple of years. Covid-19 changed many things and accelerated changes already taking place. Post-pandemic due to massive increases in demand, there were more job openings than people to fill them, sparking the Great Resignation as employees realised power had started to swing more in their favour. People are increasingly choosing to work in companies whose cultures align with their own values. This in turn is pushing companies to start identifying and articulating their true organisational values if they wish to attract and hold onto their employees.
Successful organisations agree upon and articulate their vision, mission, values, and strategies, so that all the members of the organisation can align and understand how their own achievements support them. A healthy company culture is people-focussed, considering things like mental and physical health, and incorporates initiatives such as flexibility, diversity, equity and inclusion. Corporate values and behaviours should be authentic and encompass such values as employee’s well-being, their ability to function effectively and adapt to change.
The first step is to identify and implement the core values. But how do you truly identify them? It is not a matter of a few executives choosing what they think the core values should be, nor the responsibility of the HR department and it is definitely not something to be done only for compliance. A widespread consultation is required.
One option is by using a tool such as the Barrett Cultural Values Assessment (CVA) which is based on a paradigm built by Barrett on Maslow’s Hierarchy of Needs. It looks at values by theme so you can ensure your values cover all important focus areas. Through these analytics, the values across the spectrum of human motivations can be mapped, from safety to societal contributions. It serves to create a deeper alignment of purpose across an organisation and gives a better understanding of what is most important to the company’s leadership, employees, and stakeholders.
According to Ruth Steinholtz1, Managing Partner at AretéWork, Business Ethics Advisor and Author of Ethical Business Practice and Regulation: “The most important thing is that the values identified through this process are then brought to life. This is where most companies’ efforts falter. They don’t realise that clarity regarding what they mean, consistent behaviour in line with the values and constant and positive communication regarding the values are all necessary for them to become part of the cultural DNA of the firm.
There are many ways to do this, including:
Then, measuring progress, often via a regular CVA – every 18 months to two years, and carrying out a group wide conversation to review the situation, is essential. If the values aren’t showing up, find out why. Wrong values? Poor execution? Contradictory behaviour? It is a marathon, not a sprint.”
Companies need to create a culture where its employees and leaders feel safe to speak up without fear of judgement or blame and rather than see each other as competitors they work as a team. In 2012, following the success of their research to find what makes a good manager, Google investigated what made a good team in a company. The project was code names Aristotle - a tribute to Aristotle’s quote, "the whole is greater than the sum of its parts". What the research revealed was the importance of how a team worked together, not who was on the team.
The attributes found to be important through the research were: Psychological safety, dependability, structure and clarity, meaning, and impact. However, psychological safety was by far the most important of the five attributes. Organisational behavioural scientist Amy Edmondson of Harvard outlines the importance of building a psychologically safe workplace in one of her TED talks. It refers to how confident a team member feels about taking a risk around their team members without fear of being punished or embarrassed for admitting a mistake, asking a question of suggesting new ideas. The values and behaviours of a company will dictate whether it creates psychological safety for its employees or has the opposite effect.
Nurturing a healthy company culture is not limited to established companies. Although it may not seem important when you and your co-founder are the only people involved, the truth is, life in a start-up can move very quickly. You have values, and they may be part of the reason you decided to create a start up in the first place. If you do not think about the type of company culture you wish to create at the beginning, you may find the culture that develops results in bad hiring decisions, unsettled employees, and a toxic work environment.
Start as you mean to go on, think about how you want your employees to be treated, the type of working environment you want to create, how you want your employees to behave and make sure each person in your team understands the company mission and initial core values the founders wish to exemplify. Everyone in your company should understand what is expected from them and why the core values matter. It is crucial to hire people who share your values. As your business grows and develops, there will be a time to consider whether your initial core values are suitable for the long haul. To a certain extent, they will be if you have been thoughtful in identifying them, however a start-up will need to focus more on foundational values to ensure survival and to thrive. Ultimately, if successful, you will begin to consider what values will support you to achieve your purpose and make a difference in the world.
Values are part of what makes a company culture, but it is not enough to merely state what the core values are. Once the values have been identified, described, and communicated, they need to be followed by everyone involved, especially the leaders, who are role models. It is imperative that senior leaders actually use them in decision making, live them, discuss them, refer to them and walk the talk. If team members see their leaders don’t adhere to the values, the consequences will be a lack of trust and a cynical group of employees, and in the worst case a toxic work environment which will drive talented employees to leave the company.
Every company has its own culture, made up of its own values and beliefs, the underlying assumptions that drive its behaviour and decisions and the visible artifacts that bring it together. A healthy positive company culture will drive a company towards success. Culture can make or break a company – there are numerous examples of this in the financial papers every year. Establishing the right core values, that are inclusive, caring, supportive, flexible, and collaborative will result in committed employees who are resilient and engaged. A negative workplace culture will ultimately lead to low performance, unethical behaviour and failure. So, do not underestimate the importance of consciously creating a healthy culture; it is as important as and will influence your financial results.
1 Thanks to Ruth Steinholtz for her input and suggestions to help with this article. Ruth is co-author of Ethical Business Practice and Regulation: A Behavioural and Values Based Approach to Compliance and Enforcement and Founder of AretéWork (aretework.com)