There’s a phrase that has circulated around business circles for a while: “Culture eats strategy for lunch.”  It points out that no matter how much planning and thought goes into an organization’s goals, in the end the culture of its people will be the determining factor in its success.  It makes sense, then, to spend just as much time developing the culture of an organization as the business strategy.

For our purposes, culture is simply a “default setting” for two important activities within the organization: decision-making and interaction.  Decision-making refers to both the quick decisions made everyday as well as long-term, strategic decisions.  Interaction refers to the interpersonal communication between employees internally and externally with customers and vendors.

Every organization has a culture, whether or not it’s been purposefully created.  Spending time to deliberately create an effective organizational culture is one of the most valuable uses of a leader time.  This is especially important for small businesses that have only a handful of employees.  In fact, the less participants there are in the culture, the more powerful that culture can be. 

6 Steps for Developing Organizational Culture 

1.  Define the desired attributes.

One of the most important tasks of leadership is to purposefully decide what the culture should be within the organization.  Because the culture is often unstated in day-to-day operations, it’s valuable to step back and consider what guidelines would be the most useful.  When companies develop mission statements, this is why they often include a declaration of guiding principles or “how we do things”.

2.  Communicate the desired attributes.

Defining the culture is a good start, but it’s also important to directly and explicitly communicate the behavior and thought processes that the leaders want to see.  If the team members have to guess what is expected of them, it doesn’t work.  A good example of effectively communicating culture can be seen in families when a parent will directly tell a child, “That’s not what we do” or “This is what we do.”

3. Model proper activities.

This is often where companies find a gap between their professed culture and their actual culture.  It’s imperative that the leadership not only define and communicate the culture, but that they exhibit it themselves.  It’s not enough to put a mission statement on a poster; those in positions of authority must engage in the behaviors themselves.

4. Recognize appropriate actions.

When someone within the organization behaves in a manner consistent with the desired culture, it’s important that they are given immediate positive reinforcement.  Keep the rewards in alignment with the desired actions ; a good example is a sales organization that gives bonuses for selling the products on which the company wants to focus.

5. Develop necessary capacities

In the short run, it’s possible to develop the culture by working with the existing skills that the individuals in the organization already possess.  But long-term, it’s necessary to develop the abilities of those within the company.  Focus time and resources on building the abilities of the team so that they can follow the cultural norms.  For example, if positive interaction is valued, focus on developing communication skills. 

6. Give Ownership

When the entire team feels that they have a stake in how the business runs, they become more engaged in aligning with the culture of the organization.  Creating a powerful, purposeful culture isn’t effective when it has to be imposed and policed.  By giving responsibility to the team for maintaining the cultural standards, they are much more likely to cultivate and follow it.