What Is “Organizational Culture” Anyway, and Why Is it So Important?

For years, leaders in the HR space, academics, and top business minds have all sought to define organizational culture. They have largely failed.

This is, of course, no easy task. Culture is nebulous, something that we feel but just can’t put a name to. It’s like the immortal soul. We can’t point to it, and some say it doesn’t exist, but who can deny that there is something magical and mysterious about our lives?

Left with little choice, people define the intangible by pointing to the elements of it — where people bend the rules, the way that people speak to each other, or the feeling most people have when they visit the office. All of these intangibles merge into the essence of your organizational culture.

The organizational culture definition

Some business leaders may think that competitive pay and benefits are sufficient or that a healthy culture isn’t necessary as long as the company and employees are financially successful. Sure, revenue growth and compensation are essential. It helps you stay competitive and gives employees enough financial abundance to alleviate fear and stress that might otherwise impact their work. (Or maybe it’s a status thing. But let’s leave the tech bros out of this conversation.) The bottom line is that salaries and benefits help you compete for talent, but they are not enough in the end.

Science has proven that humans aren’t entirely motivated by compensation past a certain amount. So anything above that eventually fades into the background. And other perks like catered meals or plentiful snacks become normal expectations over time. Culture responds to different and higher human needs, like the sense of psychological safety and belonging, and of fulfilling a higher purpose.

Culture is what already exists at your company (whether you create it intentionally or not) and must be periodically directed or redirected by leaders’ efforts. It has touchpoints like a mission that provides purpose and core values to provide direction. All of these efforts are conducive to creating a flexible environment in which people have space to move within. 

For example, some days, an employee may align mainly with 15Five’s company value of Hold and Be Held Accountable; on a different day, it may be Dare to Dream. Each employee has guidelines, and the flexibility to work within them to do what they deem is of the highest contribution.

Can you create culture in your organization?

In some businesses, leaders did not at first know how to intentionally create an organizational culture from the outset or did not consider it a priority. If you, as a people leader, have not intentionally created your culture, that’s okay! There are already existing elements that have naturally emerged at your company. You just have to extract the values from those experiences and codify them. But to access these, you have to be tapped into your employees.

For example, a new 15Five employee was once asked to end a meeting with a phrase to kickstart the action items developed during the meeting. Put on the spot, he paused and eventually stammered, “Hope we do good.” Everyone laughed, and the phrase was repeated over the years to the point that it has become a traditional and inspirational quote. 

This story became a cultural phenomenon of sorts. Leaders can use moments like that. Maybe tie it to a value like Always Do Good or Hope Is Not Enough. Eventually, people may forget about the inciting instance, but the value will remain.

You may not have planted the tree (created the culture), but you can provide the rain, soil, and sunlight now. Organizational cultures must be nurtured like any living thing, to grow in the right direction and be pruned when certain elements grow out of control. You don’t create the tree, even if you planted the seed, but you must diligently care for it to keep it alive and thriving.

Beware of bureaucracy

When building and fostering a healthy organizational culture, watch out for internal threats, like overly bureaucratic processes. In past decades, bureaucracy was needed to create order and structure in large organizations. Power and influence resided at the top of the hierarchy, vision and ideas came from the top, and work was handed down to employees to complete (and never question). 

In his 1920 book, The Theory of Social and Economic Organization, Max Weber called bureaucracy “the most rational known means of carrying out imperative control over human beings.” (Yikes.)

While most business leaders today don’t intend to command “imperative control” over their employees, these antiquated organizational structures still exist in many modern-day companies. And while there’s nothing wrong with having a traditional hierarchy — most companies do — what does matter is that there is an organizational culture that allows employees at all levels to make an impact and affect change.

Technology is evolving at such a rapid pace that many of the jobs your children or grandchildren will have don’t even exist yet. Organizations that aren’t constantly ideating and striving for more efficient ways to work will fail against more innovative competitors. And for those business advancements to occur, employees at all levels must be empowered and engaged. 

“If an organization is going to outrun the future, individuals need the freedom to bend the rules, take risks, go around channels, launch experiments, and pursue their passions,” wrote Harvard Business Review’s Gary Hamel in his article, “Bureaucracy Must Die.”

Creating an organizational culture in which people can share ideas and suggest improvements to the business will not only benefit productivity and efficiency but can also increase employee engagement. 

Building a strong culture — from scratch

If you are fortunate or forward-thinking enough to be conscious of culture-building when you begin your company, you will ideally establish values and purpose-creating elements like a mission and vision. You can then hire people who share the same values and are inspired by the same company purpose. (Note that “shared values” can lead to a homogenous workforce. Always consider the power of diversity, equity, inclusion, and belonging when building the team.)

All this being said, maintaining culture does become harder as a company grows. Microcultures will form within certain groups that either fit inside the macroculture or threaten it. You will have to choose what flexibility will be in that system, how microcultures are allowed to differ, and what the universally shared values will be. Unless you want a deliberately competitive culture, you can’t allow a rogue faction to be created within the organization. (Steve Jobs did this with his Mac team in the 1980s, and it created strife at Apple among the teams.)

Tools like employee feedback software allow for the safe creation and maintenance of team microcultures within the greater macroculture because they help managers build authentic relationships with their employees. 

Microcultures can exist on teams with strong company-wide communication because they are not competitive, and silos can’t form. These are just naturally occurring conversations and experiences on different teams with their own center of gravity. While each microculture has some uniqueness, there must also be common threads of purpose and core values that connect everyone in the company.

Strengthen your organizational culture with 15Five 

Learn how your team can share real-time feedback, manage goals, recognize employees, and more with 15Five’s human-centered platform.