Culture's Big Business Moment

Between Greg Smith's grandiose call out of Goldman Sach's unsavory corporate ideology to Facebook's lauded hackathons, company culture is having a moment. Here's what the experts say about creating, sustaining, and changing the spirit that can make a business go from good to great.

Company culture is having a moment. And why not? The culture of an organization can be the key to its sustained success (see: shiny, happy Zappos employees ringing up more than $1 billion in sales) or degradation at the hands of disgruntled employees (see Greg Smith's much-shared op-ed in The New York Times describing the erosion of Goldman Sach's corporate to something "toxic and destructive").

More than a business buzzword, culture is a cornerstone, according to Shawn Parr. But that hasn't stopped it from being misunderstood and discounted as the woo-woo component of a company that doesn't have much of an impact on its balance sheet. However, Parr argues, engaged employees in a performance-oriented culture give businesses a better chance at financial growth and innovation. Culture is a place where strategy is born.

A heated debate took place among Fast Company expert bloggers and our community of readers on whether "culture eats strategy for lunch." The original quote "wasn’t meant to take sides so much as it was to highlight that the amount of time business executives pay to each is way out of proportion based on the contribution of each to an organization's success," wrote Brent Daily at Roundpegg.com

Business leaders at SXSW last week clamored to take a stab at articulating which is more important. Their answers, while different, suggested that organizational culture was a critical component in enabling the successful execution of strategy.

Here's Edward Saatchi, cofounder of NationalField, on how their culture of accountability made it possible to carry out the startup's strategy to connect on-the-ground operatives during Obama's 2008 campaign.

Ultimately, writes Bob Frisch, managing partner of The Strategic Offsites Group, you don't have to choose. "It's like asking whether you would rather back a great poker player with weak cards or an average player with great cards. You’re more likely to win when you have both: a great player and great cards. The same goes for culture and strategy. You don’t have to choose. Culture doesn’t eat strategy, and the company that lets culture do so is likely to starve."

With that in mind, we've rounded up the experts to weigh in on how to build a great culture, how to nurture it, how to use it to foster innovation, and how to change it when things aren't working.

Bake It In

For Boy CEO Mark Zuckerberg, hacking goes way beyond the allegations that he coded his way into the Harvard Crimson and ConnectU—it's an integral part of him and the company he started in his dorm room. For Zuck, the hacker culture is about using shared effort and knowledge to make something bigger, better, and faster than an individual can do alone. His "hackathons" at Facebook are legendary and help foster innovation in all manner of projects from building better data centers to crowdsourcing urban planning for its surrounding neighborhood. At Facebook's new headquarters, the Hacker culture reigns supreme—the writing is literally on the wall.

Encourage Buy-in

Dennis Crowley, cofounder and CEO of Foursquare, says that when the staff grew from two to 10 people, he started by hiring friends he knew could work together. That fostered an initial spirit of teamwork and open sharing that scaled along with Foursquare's growth.

Pay Nothing

Founder of ClearGears Arshad Chowdhury is convinced that culture isn't costly. It can even save money. Start by getting rid of expensive firewalls that block Facebook and YouTube. Access to social media tools can help employees research and network faster. Also, Chowdhury says, it’s not true that the longer you work, the more work you will get done. According to a 2010 study, flexible work hours can lead to increased retention and productivity. If you must have staff on site, let 'em sleep. A NASA study indicates that a nap of just 26 minutes can boost productivity by 34%.

Throw Yourself Off a Cliff

To encourage innovation, Reid Hoffman, cofounder of LinkedIn, believes you need to hire creative truth seekers who can assemble a plane on the way down from that cliff leap.

Empower and Support

It's not just enough to hire great people, you have to empower them—especially junior staff.

Recognize Achievement

A culture is only as good as the environment that supports it. People work for more than just a paycheck, they want their achievements to be recognized by the leaders and peers. Erin Newkirk, founder of RedStamp, says a little thank-you can go a long way. And it doesn't have to cost a thing.

Eliminate Poison at the Source 

If someone or something isn't working, it's time for a change. To shift culture in a better direction, Jim Fowler, CEO of Jigsaw, says start with eliminating those who are poisoning the well.

Now it's your turn. What strategies have you used to create and foster company culture? Tweet us @FastCoLead with the hashtag #FCculture to join the conversation, or leave a comment below.

[Image: Flickr user Simon Li]

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5 Comments

  • Bill Catlette

    I'll take mediocre strategy executed by a focused, fully engaged, capably led workforce over half-hearted implementation of a brilliant strategy any day. Motivated people move faster. Yes, culture matters.

    Bill Catlette
    co-author, Contented Cows STILL Give Better Milk

  • Deanna Burnett Keener

    See my comment below, thanks Kirk for sharing-and OK my viewpoint filtered through under grad Cultural Anthro and grad work MBA.

  • Deanna Burnett Keener

    Reality of "Culture" is that is exists whether you plan for it,play to it,or ignore it. Every business has one, and often it is at the heart of the question "What is it like to work there?" It is that invisible correlation between what the company policy manual says and what it actually does.It is created by the fact that people tend to hire like people.

  • Totally agree, Deanna. It's that thing that everyone knows exists, but can't quite put their finger on. Yeah, that's your culture. So many business, when they were small, focused so hard on sales, product development and growth. All good things, but typically not with a deliberate culture in mind. So most most companies grow into the personalities of their leaders, both the good characteristics and the not-so-good. You counteract this by hiring people of diverse perspectives/personalities and strategically plan a culture and then follow the items listed into this excellence post.

  • filip matous

    I imagine that we'll be seeing more and more companies putting out policies such as "unlimited vacation days" without seeing it abused. When employees fit the culture and live by its values, old industrial practices like 9 to 5 work days become irrelevant.

    Best,
    Filip

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