Who is Responsible for Company Culture?
Company culture is one topic with no beginning or end because each company is different, and cultivating and maintaining a strong preferred culture is complex and multifaceted. There are various types of culture, including paternalistic, customer-focused, purpose-driven, market-driven, innovative, hierarchal, participative, and adhocracy, to name a few. Culture is unique to each business or nonprofit.
Developing your company culture begins with identifying the specific type of desired culture and then deciding who is responsible for embedding and maintaining it in daily operations. The answer to “who is responsible for company culture?” may be surprising because culture might begin with the CEO and senior-level leaders, but embedding and nurturing a specific culture involves everyone in the organization. This is true for non-family and family-led businesses.
What is Organizational Culture Really All About?
Organizational culture is defined as the set of values and beliefs that characterize an organization, setting expectations that influence the behaviors of all employees. Culture is unique to each business, essential to the brand’s reputation, and complex. The complexity is because written and unwritten rules influence culture and take time to develop. Culture is not fixed, though. The fundamental values and beliefs are immutable, but sometimes, an organization’s culture must adapt to the changing business environment. For example, the typical business culture of baby boomers was hierarchical, and that culture seldom works today because younger generations want to work in participative and innovative cultures.
At one time, defining and establishing culture was thought to be the responsibility of the company founder or CEO, who models it and sets expectations. For example, the founder of a family-led tech company wants to develop a culture of innovation based on family values and beliefs. To do so, the founder meets with top-level leaders to set goals, after which a culture statement is issued to communicate the culture to everyone in the organization. The mission statement drives the purpose, but a culture statement is intended as a guide that describes the company’s vision, mission, core values, beliefs, code of ethics, and desired workplace environment.
Well-written mission and culture statements are important for communicating what the top leaders want, but all the elements are intangibles. There is no certainty that the culture will become a reality unless people organization-wide make it a reality through their tangible decisions and behaviors and ensure all internal and external stakeholders experience the culture.
Walking the Walk of Culture
Statements and directives are only some of the pieces of culture development. In reality, top-down communication in your company culture is only the first step. The mid and lower-level managers and employees are the people who embed culture throughout the organization on a day-to-day basis. Culture permeates the organization through decision-makers and employees who behave in a particular way. Culture can exist by design, or it can develop through neglect.
For example, a team leader does not support a participative culture during project meetings. Instead, the leader ignores diverse perspectives or creative ideas. In a family-led business, the founder may express belief in an innovative culture but does not support it by giving employees a voice or job autonomy. Instead, a paternalistic culture is developed in which family members’ ideas are always given preference over those of non-family members.
You believe you have a customer-centric culture, but a customer service representative who is rude to customers creates an image of a company that talks but does not walk the culture. External stakeholders, like suppliers and partners, also support or hurt culture maintenance. Your company may tout a culture of environmental sustainability but add suppliers to the supply chain that harm the environment. Some of the largest corporations in the world have experienced the incongruency of their culture claims compared to real-world practices internally and externally.
Having built the business from the ground up, the founder of a family business may see things that others do not consider as impactful on the company’s culture and business success. What the founder pays attention to, like customer relationships, has an enormous influence on the culture because it sends a message of what is important. This influence is crucial to how top leadership is viewed. Is it as a micromanager making day-to-day decisions that should be delegated or a company leader who drives a culture that empowers all organizational members through reinforcement of values, beliefs, and acceptable behaviors?
Maintaining the Company Culture
There are two requirements for any organization to develop and maintain a desired culture. One is consistency in leadership decision-making, and the other is accountability. When business members do not support the culture, there should be accountability for their decisions and behaviors. You could say that every type of culture is also partnered with a culture of accountability.
For example, you may have a goal-driven culture of success in your family business. An employee or team meets the goals, but how they reach them is important. If the culture is not well-defined and communicated, the employees depend on the Founder or CEO to determine if the process is acceptable. They may have to repeatedly turn to the founder during the project to avoid making decisions that do not support the culture or fail to satisfy the family. This is inefficient and stifles employee creativity and autonomy. Suppose the founder or family executive allows this and does not make corrections. In that case, the wrong culture is reinforced – one of dependency on family members that does not support job autonomy.
Leaders can only hold employees accountable when they themselves are aligned with the culture. Conflict at the leadership level over the ideal culture alienates employees and can spill over into brand reputation. The first level of accountability is at the leadership level. Establishing a leadership aligned with culture means purposefully exploring family values, the company brand, and the decision-making responsibilities of family and non-family members.
It gets even more complex when a fourth-generation family-led or family-owned company wants to change the culture while adhering to family core values. A paternalistic culture where family members retain all decision-making authority may no longer work. Change is needed to remain competitive by making different decisions about products, services, market niches, etc. A culture of “We have always done it that way…” eventually no longer works.
There are numerous family-led nonprofits, and the interactions with external stakeholders are particularly important to organizational culture. While leadership and employees are accountable, nonprofits want to capture stories of employees, community members, retirees and customers to really understand what they experience. The information is used to assess the organization’s culture and how it impacts the ability to meet client needs and form valuable relationships and partnerships.
Plan of Action
Finding a balance between the distinctive culture of a family business and the need to adapt and manage a culture that remains relevant in a dynamic business environment is essential to business sustainability. This is particularly true when trying to answer the question, “who is responsible for company culture?” Several approaches are employed to develop, maintain, strengthen, and sometimes modernize organizational culture.
- As discussed, ensure all leaders are aligned with the culture, which may mean revisiting the founder’s ideology and core values. As family businesses grow, non-family leaders are hired, and younger generations of family members assume leadership roles. It is easy to move away from the founder’s ideology.
- To operationalize the culture, conduct an exercise in which employees think about how culture applies to them in their roles and how culture is put into practice. This way, culture will cascade through the organization.
- Some companies establish a culture team to ensure culture is lived out within the organization. The company may have its own internal team of experts, but training is essential. How culture is communicated and reinforced is extremely important. Employees today are savvy and recognize “talk” versus “walk.” This is why The Utech Group offers leadership training on culture and strategy development, implementation, and maintenance.
There are many positive effects when everyone in your organization embraces the desired culture. These include increased employee engagement and communication, a sense of trust, a unifying principle guiding every role, increased employee retention, and greater accountability, to name a few.
Culture is the Tie That Binds
Culture is the tie that binds any organization, providing continuity no matter who is leading or when they are leading. Family businesses that maintain culture through succession are more likely to succeed through generations. The basic assumptions of the culture never change, even if the culture must adapt to a changing business environment.
When culture is embedded, the core values and beliefs are retained through time and generations. A family-led company may have a paternalistic, participative, or professional culture, but the values, beliefs, and ethics are the underlying foundation driving good decision-making. Family leaders must always be aware of the impact of their behaviors on the culture.
So, Who is Responsible for Company Culture?
Who is responsible for building company culture? The best answer is: Everyone.
The Utech Group provides experienced consulting focused on organizational culture development and maintenance for leadership and employee teams in non-family and family-led companies. Contact us to discuss how we can help your organization thrive!
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