On Corporate Culture

People tend to use many descriptive terms on corporate cultures. For example, “casual” vs. “serious”, “competitive” vs. “friendly”, “fast moving” vs. “slow”, “fun” vs. “rigid”, “quick decision” vs. “consensus”, etc. There are also many details to describe the behaviors of the people inside: “casual-dressed” vs. “suits & ties”, etc. So, what is exactly a corporate culture?

Former MIT Sloan Professor Edgar Schein, a known scholar on corporate culture, pointed out that the surface terms may not truly describe a company’s culture. He thinks that culture is a way of working together towards common goals that have been followed so frequently and so successfully that people don’t even think about trying to do things another way. If a culture has formed, people will autonomously do what they need to do to be successful.

From his explanation, a corporate culture is the common group approach, in explicit description or without, to do things inside the company and reach agreements. Other scholars summarize it as the combination of process and priorities inside an organization. Prof. Schein did warn us that it’s too easy to over-simply on what is truly a corporate culture. It comes in multiple levels and is influenced by multiple dimensions and factors with the age of the organization and its leaders, missions, strategies and goals, organizational structure and process, time and space, external forces, etc.

The question is at the interpretation of a “success” in a corporation. TriStrategist thinks a corporate culture is more than the “How” & “What” elements of the process and priorities; it has a lot to do with group-enforced human attitudes and behaviors under human psychology. These attitudes and behaviors, which over time form a “group preference” of doing things, for a large part, came directly from those of the company founders or top leaders. “Corporate Values” are not a culture statement. As the Corporate Mission Statement, they are for marketing a company’s ideal image to the outside, but the true culture inside speaks more about the personalities of the top leaders and people who subconsciously try to be “alike” to their leaders in order to be accepted or “successful” in a corporation. Because of the narrow definition of individual success in a corporate environment, the performance review and compensation system, reflecting how leaders and management value their people and contributions, also impact the culture twist. Underlying “directness” vs. “passive-aggressiveness”, “sharing” vs. “backstabbing” can all be the gradual results of it. People may even subdue their true personality in order to fit into a corporate culture at the workplace. A fun-loving person can easily keep a low key and put on a straight serious face for the 8 hours a day for the sake of making a living for the moment. Besides, there are plenty of stories on companies who failed on scandals because of the behaviors of their leaders and their questionable culture, although they had those shinning righteous corporate values posted on the wall.

The formation of a corporate culture is similar to that of a family culture. Even if the head of the household or parents may not explicitly try to “define” the culture of their family from the beginning, the children will inevitably inherit the day-to-day attitudes and behaviors from their parents inside a family. For example, “a caring, loving family” is where parents respect and care each other and their children. Parents’ honesty, hardworking, kindness to friends and neighbors, attitudes towards money, their rewards and punishment standards (especially) all help define a family culture and directly impact how their kids will behave. Same with a corporation. A competitive leader will generally lead a competitive company. A courteous leader who leads by persuasions may result in a company more “friendly” towards each other and to their customers. A overly consensus culture can seldom lead to great decision-making in a competitive market, but if that is the culture, people inside will accept it as a norm for a long time. A cunning, corner-cutting business culture may pursue aggressively on short-term gains, and that’s a culture too.

Neither a successful company ensures a winning culture, nor does a past winning culture guarantee a company’s future success. The snapshot “success” of a business usually comes with both the vision of the leaders and the luck, not necessarily the superior skills or aptitudes of the top leaders themselves. For example, a product or service may jump to an instant success because of the lack of the competitions in a particular market. No business model can last forever. Both the corporation and its culture evolve over time, but the culture, carrying the burden of a long history and the momentum of a large mass, tends to evolve much slower than the market conditions or business decisions.

A culture can be both a catalyst for many great new things or a barrier to change. The initial success of a great business tend to foster a culture which has embedded elements from their leaders and people that lead it to its success, either with their unique decision-making process, enhanced human psychology (innovative pioneering spirit, courage, passion, drive, etc.), or striking personalities (Steve Jobs as an example, who worshiped brilliance, simplicity, perfection, etc.). In the long run though, as the market and business evolves, its existing culture can directly impact if the business can adapt quickly or if it will last. A culture usually changes somewhat with the leadership change or gets blurry if neglected. Process and priorities can be changed anytime by logics, but a lasting successful business usually fosters a deeply rooted culture which includes those lasting human elements that can endure the test of the time. It is hard, but a long-lasting business needs a true “signature”.