By Seth R. Silver and Timothy M. Franz

Every organization has an organizational culture, whether they know it or not.  Most of us would agree that the ‘culture’ of a typical Department of Motor Vehicles is quite different than the ‘culture’ of a typical Cost coor Ritz Carleton hotel.  What we would readily see are the differences in employee energy, teamwork, customer service, treatment of staff, and probably adherence to a mission or set of core values.  In short, it is the look and feel of the organization, but more important, it is the quality of experience for both those inside and outside.

Ed Schein, noted leadership author, states that organizational culture is “a pattern of shared basic assumptions that the group learned as it solved its problems ……… that has worked well enough to be considered valid and ….. taught to new members as the correct way to perceive, think, and feel in relation to those problems”.  He refers to core assumptions (what we really believe around here), espoused values (what we tell people that we care about), and artifacts (those observable things in our organization that reflect our values, like dress code, titles, policies, décor, rituals). Schein believes that culture strongly shapes the behavior of people inside the organization, but it can be changed by the leaders, depending what they choose to focus on or ignore, reward or punish, and where they allocate key resources.

Our experience suggests that there are essentially two types of organization: those that have a culture by choice, and those that have a culture by default.  The culture by choice organizations have thoughtfully considered what is the experience that they want for their employees, clients/customers, and external partners.  They have developed intentional approaches to hiring, firing, training, promoting,and engaging their staff, as well as related practices with external stakeholders, that support/reinforce their desired culture.  Put simply, they have clear goals for their culture and they make them happen.

By contrast, culture by default organizations do not seem to have determined what consistent experience they want for their staff or stakeholders, and so their core assumptions, espoused values and artifacts have simply emerged over time without a real strategy.  We guess that perhaps 5% of organizations could be deemed to have a culture by choice, and they are often well represented in the Top Places to Work and Best Customer Service lists.  The other 95% of organizations seem to have a culture by default, and while some may be relatively successful, they are not perceived as role models on how to treat employees or customers.

The late Tony Hseih, tech entrepreneur and founder of Zappos (on-line shoe retailer), was obsessive about culture and instituted numerous practices to ensure that Zappos’ culture remained positive and consistent.  He noted that culture and brand are really two sides of the same coin, with brand (what customers experience) being a lagging indicator of culture.  He believed that if you work hard on creating the right culture inside, the right brand will emerge for the outside.  His favorite example was US based airlines: lousy culture over time has created lousy brands, and so everyone hates flying on most US carriers (Jet Blue and Southwest may be exceptions).

Given recent crises, a recession and the pandemic, can a strong positive culture help an organization to be resilient during tough times, and rebound strongly?  In a word, yes, for a very simple reason.  Culture by choice organizations are almost always at or near the top of their industry, and if they are small, they stand out as local firms with excellent reputations.  They succeed because they attract the best employees, they keep the best employees, they filter out those who do not fit their culture, and over time, they develop the best brand experience for their clients/customers and key partners.

Consider a few organizations that have gotten through recent crises with continued success.  Starbucks treats its employees and partners like gold, and customers continue to flock to them and pay double for the same beverages they could get elsewhere.  Wegmans Supermarket, whose business cards famously state “Employees first, customers second”, is an industry leader in employee training, career growth, retention, and local philanthropy. No surprise, they top all rankings of supermarkets, in almost every category.  Apple soared during the pandemic, not just because of great products, but because they know that ‘the assets go home at night’.  Great employees make Apple great, and their culture handsomely rewards hard work, innovation, teamwork, calculated risks, and learning.

Want to have a culture by choice?  Here are three quick ideas to get started.

1. Get the leadership team on the same page. Organizational change always starts at the top. If an organization is going to adopt a strategy to improve its culture, the senior team needs to be in agreement on the goal, on the several year plan (because culture does not change overnight), and then commit the resources.  The values that will guide how employees are treated, and how clients/customers are treated, must be defined, and then integrated into every system, policy, and practice that might affect them.  You can’t say you value employees, and then slash benefits and training.  You can’t say you value customers, and then have staff who argue with them, or are not empowered to make a simple decision to help them.
2. Pay attention to the manager-team relationship and make it a priority. Elsewhere we have noted that the manager-team relationship is arguably the most important relationship anyone has at work. The relationship an employee has with his/her direct boss significantly impacts their engagement, and how they perceive the organization.  In effect, for that employee, the behavior from the manager is their experience of the organization’s culture.  If the manager is harsh, the employee will feel the culture is harsh.  If the manager is fair, appreciative, and a good coach, the employee will see the culture positively. Not surprisingly, culture by choice organizations prepare managers well for the role, and support the development and rewarding of teams.
3. Assess, get feedback, adjust. Famous management guru Edwards Deming once said: “If you can’t measure it, you can’t manage it”. Any organization that is serious about improving its culture and making it a strategic strength, will need to assess how they are doing at least annually, get lots of feedback from internal and external sources, and make substantive adjustments to policy and practice as needed.  It is an iterative process, that should be seen more as a marathon than a sprint.  But over time, as the intension to make the culture better takes hold, and the leaders say and do things to support that, values and behavior will change throughout the organization.  A better culture will lead to a better reputation and brand, and ultimately better resilience and better results.

Seth R. Silver, Ed.D., is the principal of Silver Consulting, Inc., and has worked with hundreds of diverse clients on leadership, cultural change, employee engagement and workplace success. Dr. Silver was also an associate professor of Human Resource Development at St. John Fisher College.

Timothy M. Franz, Ph.D., is an Organizational Psychologist, Professor of Psychology, and interim Chair at St. John Fisher College. In addition to his academic role, he also works as an organizational consultant through his firm, Franz Consulting. Their new book, Meaningful Partnership at Work: How the Workplace Covenant Ensures Mutual Accountability and Success between Leaders and Teams (Productivity Press, Aug. 27, 2021), provides a powerful model of how work partnerships can be created and sustained. Learn more at teambuildingprocess.com or silverconsultinginc.com.