Who Defines Company Culture?

Every company has a culture. Who defines the company culture? Is it the owners, the CEO, the president of the company, or the employees? My response is that culture needs to be defined by the CEO or president and the leadership team. The culture needs to be intentional and leadership driven. If you let the employees define the culture it is like letting the prisoners run the prison. Of course, I’m not saying your employees are prisoners, but you get the gist here. Your company culture is a strategic differentiator from your competition. Let that sink in for a minute.

Everything else your company does can be replicated by your competitors. For this reason, it is important that you focus on your company culture. Regardless of company size, an intentional leadership-driven culture is critically important to the longterm success of your company. A set of shared core values, beliefs, and behaviors shape how employees interact with each other and the outside world. In fact, over time, companies with strong cultures tend to out perform those with weak ones in terms of revenue, customer loyalty, and profitability.

Zappos is a great example of this. Zappos follows the Holacracy model, a model that distributes “power throughout the organization, and if done properly it gives individuals and teams more freedom to self-manage.” Another famous thing that Zappos does is during their onboarding process, they will pay people two thousand dollars to quit. If you don’t like your job in the first month, they will pay you to quit, no questions asked. They believe that if you’re not fully committed to the brand, they don’t want you to stay long-term. Key drivers for how companies with great cultures like Zappos financially outperform their peers include:

• productivity and execution (higher employee engagement)
•  decision making quality (allowing for robust debate to get to better results)
• cost of human capital (lower employee turnover rates)
• risk management and compliance (better leadership/employee mgmt)

Excerpt from Chapter Two of People Are Your Profit by Mark Mitford, MA, MBA