Culture Strategy: The Definitive Guide to Building A Great Corporate Culture

Aug 25, 2022 | Employee Engagement, HR Trends

What is a culture strategy? Better yet, what exactly is company culture? Where does it come from?

A company’s culture consists of group norms that guide behaviour. These expectations centre on its key values and practices. Leaders can work to instil these norms in their teams. But culture can also emerge organically as group habits and practices evolve.

A company’s culture can feel hard to define. However, it affects the employee experience and organizational success in profound ways. Plus, it influences whether you can attract new talent.

Companies tend to focus more heavily on strategy than culture. Strategy feels easier to define and understand. It has clearly defined goals and plans. And strategy is usually far easier to change than culture. 

But thinking strategically about culture brings far-reaching benefits. Without intentionally shaping culture, unwanted elements can emerge. Through a culture strategy, you can actively shape your culture. 

Table of Contents

1. What Is Culture Strategy

2. Elements of Company Culture

3. Signs That You Need A Culture Strategy

4. How to Create A Culture Strategy

5. How to Execute A Culture Strategy

6. Examples of Successful Culture Strategy

What Is Culture Strategy

A culture strategy is your plan for creating the desired culture in your organization. Think of it as a blueprint for change. It lets you approach culture in the same way you approach a business plan. You set goals and key steps, pinpoint metrics, implement the plan, and monitor progress.

What are the benefits of a good culture strategy? And how does culture strategy affect employees, managers, directors, and executives?

First, simply telling employees your culture is changing won’t work. In contrast, culture strategy helps you get everyone’s full buy-in for the desired changes. Ideally, each employee will become a cultural ambassador within your organization. 
A strong culture creates alignment among employees and leaders.

Plus, it allows for agility by making employees receptive to change. All employees will feel valued and invested in organizational success.

Further, a strong culture promotes long-term wellbeing. Ultimately, by creating a strong organization, it enhances business outcomes.

To understand how to shift culture, you must understand its key elements. Let’s review them now.

Elements of Company Culture

The following elements all shape company culture:

  • Company values
  • Organizational structure
  • Decision-making processes
  • Inclusion practices
  • Employees’ level of autonomy
  • How teams (and departments) communicate
  • Development practices
  • How you promote wellbeing
  • People’s attitude toward feedback
  • Employees’ level of work/life balance
  • How you reward strong performance
  • How you address mistakes and failures
  • Level of urgency
  • Team subcultures
  • Corporate social responsibility

Importantly, a particular business strategy does not require a particular culture. Rather, a strong culture can support multiple strategies, writes Harvard Business School.

As you can see, culture involves how your company relates to its employees. It also entails how employees communicate and collaborate. And it involves how the company relates to the broader community. Structural elements, development practices, and accepted norms all influence culture. 

For instance, if people encourage one another to care for their needs, you have a culture that prioritizes wellness. If leadership claims to prioritize wellness but constantly requires overtime, your culture undermines wellness. 

Signs That You Need A Culture Strategy

Inclusive group of colleagues working on a culture strategy
Credit: Daria Shevtsova/Pexels

Every company can benefit from a culture strategy. But some have a particularly dire need for one. Are you noticing any of these symptoms of poor workplace culture?

  • Employees are working long hours.
  • People are highly stressed.
  • Communication is breaking down.
  • Meetings are inefficient.
  • New initiatives flounder.
  • People resist change.
  • Productivity is dwindling.
  • Departments seem at odds.
  • Unequal treatment persists.
  • People are competing rather than collaborating.
  • Employees frequently engage in gossip.
  • Conflicts are difficult to reconcile.
  • People lack alignment on goals or strategy.
  • The company struggles to attract and retain talent.

If you’re noticing these signs, you urgently need a culture strategy. We’ll discuss the important elements of culture strategy next.

How to Create A Culture Strategy

Follow these steps to design a game-changing culture strategy.

Take A Listening Tour

Take a “listening tour” of your workplace to understand its culture. To do this, HR managers can conduct interviews with a range of employees across departments. Other stakeholders may provide valuable insights as well. Assure everyone that you want their uncensored opinions. After all, honesty will help strengthen the organization.

During the tour, you can ask people about the key values they live by in their work. Do employees’ and leaders’ values align?

Conduct pulse surveys to round out your listening tour. Make them anonymous to encourage complete candour.

Through these steps, you’ll establish a baseline—an understanding of your current culture. You’ll also identify patterns that need to change. 

Further, you’ll learn what people across the company actually want. Leaders will express what they desire to see in their organizational culture. 

Define the Gap

In this step, you’ll define the gap between your current and desired culture. First, synthesize the responses from leaders to describe the desired culture. Then, specify what your culture
currently lacks.

Referring to performance indicators will convince leaders of the need for a culture strategy:

  • Engagement
  • Productivity
  • Turnover rates
  • Job satisfaction
  • Internal promotions

To demonstrate the need for change, produce a report with metrics like these, as Gallup
suggests. Show current weaknesses and explain how they relate to culture.

Tap Into Purpose

“Your company purpose is your compass, telling your organization why it’s here and where it’s going,” says Gallup. “Only 41% of employees strongly agree that they know what their company stands for and what makes it different from competitors.” And just 4 in 10 say their organization’s purpose makes their job feel meaningful.

First, describe that purpose clearly. Focus on social impact, not making money. Then, find ways to live your purpose, as Gallup says. Do this through the product or service you provide as well as by giving back to the community in other ways. 

Consider Your Structure

Does your organizational structure support the desired culture? Reflect on whether a different structure would better meet today’s needs. Some companies have moved toward a flatter structure, for instance. This can foster a culture of quick action and shared accountability.

Develop Culture Metrics to Monitor

Culture metrics will help you measure your efforts. Create metrics like those mentioned above to evaluate progress over time. Track diversity and inclusion, safety and wellness, and employee development of strengths as well.

Now, let’s look at how to implement your culture strategy.

How to Execute A Culture Strategy

Three women of colour discussing culture strategy
Credit: Christina Morillo/Pexels

Through these steps, you’ll effectively launch your culture strategy. 

Deepen Connection to Your Purpose

Company leaders should first get clear on the organization’s purpose and values. Then, they should speak to employees about their shared purpose. By doing so regularly, they can rally everyone behind the mission. They should speak not just in terms of profits but also social impact. For instance, they can share social responsibility goals that support their vision. Employees will feel reinvigorated to fulfil the organization’s purpose.

Model Cultural Values

Each director, executive, and manager should model your cultural principles. For instance, if you’re enhancing transparency, each leader should model this practice. They can do this by owning mistakes and working to fix them. Plus, they can keep employees updated about decisions in the works.

Support Every Employee Equally

Create a truly inclusive workplace by supporting diverse employees throughout their journey. Each employee must receive the same mentoring opportunities. HR should actively pair employees with mentors rather than hoping they’ll find them. 

Further, strongly encourage all employees to participate in development opportunities. Talk about them often. Tell individuals why you believe they’ll benefit. 

Introduce Rituals Supporting the Desired Culture

Rituals can help you put purpose and values into practice. They allow leaders to model the desired cultural changes and get others on board. Introducing new rituals can especially improve creativity, resilience, and cohesion, research has found. They give people a shared identity and sense of belonging. 

Develop suggested rituals that managers can employ with their teams. For instance, create rituals for welcoming new team members. To encourage a spirit of playfulness and connectivity, play a game with the new hire as a team.

Consider implementing whole-organization rituals as well. For example, hold a “graduation ceremony” for employees who have completed the onboarding period. Make rituals simple and enjoyable so they’ll last.

Implement Strong Performance Management

How does performance management tie into culture strategy? It helps employees zero in on their personal and team goals. As a result, they stay more connected to their purpose.

Use performance management software to stay aligned on goals. Then, employees will remember what they’re driving toward.

Track Culture Metrics

Monitor the culture metrics you’ve set using performance management software and other analytical tools. Also analyze the relationship between culture and performance. If you’ve made effective changes, you’ll likely see business improve. Document these results. Ideally, produce reports that chart the relationship between culture metrics and business KPIs. 

For more guidance on changing culture, we recommend reading Win from Within: Build Organizational Culture for Competitive Advantage. In this book, James L. Heskett provides a blueprint for changing culture.

Now, let’s look at examples of strong culture strategy for inspiration.

Examples of Successful Culture Strategy

Let’s explore how leaders rescued two tech giants by changing their culture.

Lou Gerstner Transforms IBM Through Culture

“Culture isn’t just one aspect of the game—it is the game,” says Lou Gerstner. Beginning in 1995, he famously turned around IBM following this philosophy. 

Gerstner stepped in when the tech giant was dangerously close to failing. Internal competition and individualism ruled the day. Management shied away from action, holding an attitude of “obsessive perfectionism,” as Forbes reports. 

To him, cultural changes saved the company. They began rewarding teamwork instead of just individual performance. Gerstner asked each employee to make three personal commitments to further the company’s goals. And the company began rewarding efficiency rather than perfectionism.

Satya Nadella Turns Microsoft’s Culture Around

Microsoft later underwent its own cultural turnaround. “When Satya Nadella became CEO of Microsoft in 2014, for example, the company was known for its aggressive, combative, and competitive culture,”

writes Hubert Joly in HBR. “It was losing ground, having missed key waves of technology innovation. Since then, the company has gone through an amazing resurgence.”

How did this happen? Cultural shifts drove the company’s resurgence, writes Joly. “Central to that strategy was moving from a dominant “know-it-all” culture seeped in a world domination and zero-sum-game mentality to empathy and a growth mindset critical to a more open culture.”

This culture went hand-in-hand with their revamped purpose: to empower everyone on the planet to achieve more. (Previously, it had been to put a computer on each desk.)

These leaders’ role in transforming these cultures cannot be overestimated. Gerstner asserts that signals from leaders shape culture throughout an organization, writes Heskett in Win from Within. By modelling strong principles, leaders can ignite lasting change.

And by following through with proper monitoring, they’ll know what’s working—and when they’ve reached their goals.

Learn how software can enhance culture and performance management. Request a demo of our product today!

Related Articles