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Culture Change: How To Improve Your Workplace Culture


When a bunch of people get together, everything changes. Different rules apply.

I’ve posted about navigating office politics. Now what is all this talk about company culture?

Does it mean anything? And how can you create culture change?


A Good Culture = Success

For those who think “culture change” is just some buzzword, research shows culture actually affects profits. A lot.

As much as half of operating profit can be attributed to a company’s culture:

In his new book, The Culture Cycle: How to Shape the Unseen Force that Transforms Performance, HBS Professor Emeritus James L. Heskett attempts just that. “Organization culture is not a soft concept,” he says. “Its impact on profit can be measured and quantified.”


What’s employee trust worth to a company? Potentially, an increase of 2.5% in annual revenue.

From Tony Simons, Cornell University professor and author of The Integrity Dividend: Leading by the Power of Your Word:

Hotels where employees strongly believed their managers followed through on promises and demonstrated the values they preached were substantially more profitable than those whose managers scored average or lower…No other single aspect of manager behavior that we measured had as large an impact on profits.


How Do You Define “Culture”?

Harvard Business School’s Clayton Christensen has a pretty good definition.

Via How Will You Measure Your Life?:

Culture is a way of working together toward 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.

Largely, it’s a matter of rewards and punishments — both formal and informal.

Is “pretty good performance” rewarded because we value efficiency or is it punished because we maintain a very high bar?

Neither is objectively better, it’s a matter of a company’s values.

Are jerks fired — even if they’re bringing in business? Or is the industry so competitive that rainmakers are exempt? Again, a case can be made for both.

Over time, employees realize that doing things one way gets rewarded and another way results in punishment.

Eventually the system is so internalized that these informal “rules” aren’t questioned and become reflex.

This is good because things run smoothly. It’s bad because faulty systems aren’t fixed, they’re accepted.

Via How Will You Measure Your Life?:

If these paradigms of how to work together, and of what things should be given priority over other things, are used successfully over and over again, ultimately employees won’t stop and ask each other how they should work together. They will just assume that the way they have been doing it is the way of doing it. The advantage of this is that it effectively causes an organization to become self-managing. Managers don’t need to be omnipresent to enforce the rules. People instinctively get on with what needs to be done.

Netflix is famous for a deck that explains their culture.

It’s notable in how consistent it is (Doing a good job and getting everything done? Then we don’t care how much vacation you take) and how frank (“Good” employees get a generous severance package so the company can hire “great” ones.)

But most company statements are BS. What is written down doesn’t matter if it isn’t enforced.

So if the top salesperson gets treated like a king — no matter how abusively he treats people, congratulations, that’s your culture, no matter what’s on slide 47 of the PowerPoint deck.

Cultures are formed by the behavior that is rewarded in a company, not words.

Via How Will You Measure Your Life?:



Where Does Company Culture Come From?

In both good and bad cultures, it’s the people at the top.

What differentiates the two is setting values and then making sure they are consistently enforced over time.

John Kotter studied the relationship between culture and performance in over 200 companies. What did the good cultures have in common?

Via Corporate Culture and Performance:

These executives have hired and promoted people who have values consistent with those that are core in their cultures...if a subordinate clearly violated a core cultural value (such as failing to encourage leadership), even if he or she performed well by certain quantifiable measures, these executives were often willing to sanction that person severely… They were usually quick to spot a proposed compensation system or performance appraisal process that would not reflect the core philosophy of the firm.


How Do You Create Culture Change?

Treat company culture like you would your family culture.

Sounds corny but Clayton Christensen says that designing the culture of a company is no different that setting the rules for how your family treats each other at home.

Via How Will You Measure Your Life?:

Kids won’t have to stop and think about what Mom or Dad wants them to do— they’ll just go about it because their family culture has dictated, “This is the way our family behaves.” …Make no mistake: a culture happens, whether you want it to or not. The only question is how hard you are going to try to influence it. Forming a culture is not an instant loop; it’s not something you can decide on, communicate, and then expect it to suddenly work on its own. You need to be sure that when you ask your children to do something, or tell your spouse you’re going to do something, you hold to that and follow through.

Is this reasonable? Can this really create culture change? Actually, it’s the only system that does.

John Kotter’s The Heart of Change detailed a survey of 400 people across 130 companies in 4 continents showing that the secret to change within a company isn’t about fancy MBA strategy – it’s about changing the behavior of the individuals that work there, and you can only do that by addressing their feelings.

But let me guess: you’re not the CEO of your company. How can you improve things if you’re not in charge?

A good starting point is Dave Packard’s 11 simple rules. That’s David Packard of Hewlett-Packard.

These are things anyone can do to make their workplace better:











11. Keep it up. That’s all — just keep it up!


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About Eric Barker