Corporate culture develops and evolves as the company evolves, but it is important to foster a positive attitude and approach to business from the outset. Having a shared culture serves to maintain the right motivation within the company and also helps to define the company’s personality and make it recognizable, especially in a market system such as the modern one, which is increasingly unified by technological innovation.
For all these reasons (and many others), you would do well to be very clear about the concept of corporate culture, which, as mentioned earlier, has now been redefined by market evolution.
This guide will help you understand in detail what corporate culture is and why it is so important today, what its key elements are, and how many and what types of organizational culture you can adopt, but also, more concretely, how you can create, develop, strengthen, and maintain a winning corporate culture for your startup.
Definition of corporate culture
The definition of corporate culture has evolved over the years but, generally, this concept refers to the set of values, characteristics, rules, principles, internal policies and approaches that make a company unique and recognizable within the marketplace.
As mentioned, corporate culture develops in parallel with the evolution of the enterprise, but it is important to identify a set of values early on that can reflect the goals that are intended to be achieved.
The creation of corporate culture must be a shared process within the enterprise, even more so in today’s world where solutions, decisions and rules no longer come only from the top but from every part of the organization. Corporate culture, therefore, is now something that cannot be imposed from above: it is the people themselves who work for the enterprise who create and develop it.
The importance of sharing values within the organization also returns in the definition of corporate culture given by Airbnb co-founder and CEO Brian Chesky, who, dwelling on the startup world, said:
“In the startup world, corporate culture is what brings people together, inspires innovation and brings shared values to life.”
In addition to being shared, corporate culture must be pervasive: that is, it must permeate the entire company, permanently influencing its values, behaviors and relationships (often even implicitly).
Importance and impact on business
Already from the definition of corporate culture it becomes clear the first, relevant impact it has on business: it allows the company to be recognizable in the market. All this becomes even more important in the current scenario, in which emerging with one’s own differentiating element at the innovative and technological level is increasingly complicated.
In more practical terms, creating and developing a solid and positive corporate culture (as well as, of course, a shared one) makes it more attractive in the eyes of new talent on the job market and, therefore, successful in selecting the best candidates.
Not only that: all this also makes the company more fulfilling for people who are already within the organization and who, precisely because of this, will tend not to leave (reducing so-called turnover). The perceived climate of internal well-being, moreover, stimulates employees’ freedom of expression and, therefore, allows them to make full use of their potential.
Key elements of corporate culture
To be able to best define the meaning of corporate culture, it is necessary to refer to its key elements, which have been identified by MIT (Massachusetts Institute of Technology) professor emeritus Edgar Schein:
- artifacts, which concern the sphere of the “physical” and “visible” (for example, the arrangement of offices in the corporate headquarters);
- espoused values, which belong to the sphere of “explicit saying” (e.g., the “about us” page on the website and the company’s vision and mission statement, but also the company’s internal communication);
- underlying assumptions, which refer to the sphere of the “deep and unspoken” (e.g., all those norms that, while not written down and made explicit, are so deeply ingrained that they are able to guide the actions of employees and influence the work of the organization).
Types of corporate culture
Depending on your values, priorities and goals, you have the option of adopting different types of corporate organizational cultures. Of these, you can mention 4 (the most common).
Authoritarian culture
Authoritarian corporate culture includes a strong figure who serves as an administrator and, as such, sets the values and norms to be followed.
This is a type of culture that is particularly effective in cases where quick and sharp decisions need to be made, but in the long run it can cause a decline in motivation among employees.
Bureaucratic culture
In bureaucratic corporate culture, there are well-defined rules, procedures, and processes for managers and employees to follow, as well as a clear and distinct separation of roles and responsibilities.
This type of compliance-oriented, efficiency-driven culture promotes stability but can be a brake on creativity and innovation.
Democratic culture
The democratic corporate culture, also known as a cooperative, is based on strong cooperation among the different members of the company, which is hierarchically divided and has a clear and defined organizational chart.
This model encourages collaboration among employees, who are also more empowered. The downside is that this type of culture may expose more to internal conflicts and thus requires particularly efficient internal communication.
Technocratic culture
In technocratic corporate culture, values and norms are based on technical and measurable aspects. A practical example of this may be the skills or achievements of the various components of the company.
Creating an effective corporate culture
Now that you know several examples of corporate culture, you also need to know how to create one from a practical standpoint.
Establish shared goals and values
The first step in creating an effective corporate culture is to establish goals and values that are shared by everyone within your startup.
At this stage, it is very important that you are clear about the difference between vision, mission and corporate values: If vision refers to the dreams and ambitions behind your business plan and mission describes how the goals set by vision are actually translated into concrete actions, corporate values bring together all the principles stated in vision and mission. A word of advice: your choice should fall on simple, meaningful and clear values.
Promoting employee participation and involvement
Identifying goals and values is not enough: first, you need to know how to communicate them effectively to all the stakeholders in your startup, actively involving them. Dialogue and transparency are the key words to succeed in promoting their participation and involvement. Creating an acronym that explains your corporate culture in a few words can be very helpful, but avoid unnecessary, bombastic slogans that are difficult to interpret and implement.
The next step is to concretely integrate the culture into the various business processes, putting into practice those values you have identified on a daily basis, both within the startup and in the relationships it has with customers and suppliers.
Among the elements on which you can (and should) act, in addition to communication (internal and external) and human resource management just mentioned, also stand out the organization of spaces, commitment to social issues and attention to innovation.
Development and maintenance of corporate culture
To develop and keep your company culture in step with the evolution of your startup, you can put some specific steps in place that will certainly make this easier.
Strategies to strengthen corporate culture
We have already stressed the importance of integrating values into every aspect of the business, including changing business practices where necessary. In this regard, remember that in order to avoid repercussions on internal cohesion and response trust toward your startup, your corporate culture must be fully accepted and shared by all and, consequently, well established.
At the strategic (and practical) level, of course, the actions to be put in place depend on the type of corporate culture you choose. That said, whatever it is, you first need to create a work environment that reflects the values of your startup.
Particular attention must be paid to the well-being of the employee, who must be enabled to work in a place where he or she is comfortable and that makes him or her feel part of something bigger. In this sense, you must take care that the expectations and motivations of individuals coincide at all times with the goals of the company and that each employee is stimulated to express his or her individual talents and career goals.
A concrete example can help you better understand how you can take action to promote the well-being of your employees: in cases where your corporate culture is strongly oriented toward flexibility, you may also need a work organization that allows employees the opportunity to manage their tasks and time independently. This, in fact, is an increasingly common need in recent years.
Monitoring and adapting corporate culture
Listening to employees’ needs and desires is crucial, because it allows you to redefine your company policies in light of their needs. As just mentioned, the needs of workers have changed profoundly, and work-life balance, today, is undoubtedly the element that employees give the most weight to. For this reason, ensuring flexibility at work and, for example, incentivizing smart working could be winning strategic solutions.
Monitoring should not only be “internal”: one of the most common mistakes when it comes to corporate culture is to close oneself “in a clam shell,” making oneself impervious to the (increasingly sudden) changes in the market and fossilizing oneself to one’s own principles and values, which, may not reflect the new needs and desires of society.
Corporate culture and business strategy
It should already be well understood to you, but it is worth repeating once again: there is (or, rather, should be) a very strong link between corporate culture and business strategy. The reason will become clearer to you in the next few lines.
Integration of corporate culture into business strategy
The foundations on which corporate culture rests are the company’s values and goals. Once the most representative values have been identified, they must necessarily be integrated into business practices and processes, sharing them with all stakeholders in the enterprise.
The corporate culture must be well-established so that necessary strategic changes can eventually be adopted without negative repercussions on the group. Not only that, a well-established corporate culture also makes it easier to overcome any difficult times through cohesion and unity of purpose among employees.
Still on the subject of business strategy, you need to consider another aspect: choosing some precise values and not others could create a rift in the market because there will be a segment of buyers who will mirror your corporate identity and others who, instead, will make other choices.
Corporate culture as a competitive advantage
In closing this guide, it is useful to bring to mind a concept that we only mentioned earlier but that relates perfectly to what has just been said: corporate culture, today, is the element that, probably more than any other, allows you to make yourself recognizable within a market that is increasingly leveled in terms of technological innovation. To put it in more practical terms, corporate culture is the differentiating element on which you must build your climb to success.
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