The Culture Beast
Where you work, who’s responsible for culture?
The most common answers we hear to this question are “Nobody” or “Everybody,” which is to say that no one is specifically accountable for sustaining one of the most valuable assets at any organization. Don’t think that’s true? Public companies with satisfied employees have been shown to outperform their peers and, for our own part, we’re much more excited to invest in (and will pay a higher price for) companies that have great culture. Why? They’re more likely to attract and retain top talent, which is probably the biggest challenge facing small businesses.
But those answers also make sense because one person can’t force culture on others. Culture is something that has to be built and shared across teams.
That’s also problematic, though, because it makes culture a fickle beast. We all know empirically that as businesses grow their cultures tend to get diluted. I’d never heard an elegant explanation for this phenomenon until I was recently sent a copy of the research paper “Corporate Culture and Organizational Fragility.”
The authors sum the problem up neatly:
Because a strong corporate culture relies on costly, voluntary investments by many workers, we model it as an organizational public good, subject to standard free-riding problems, which become severe in large organizations…workers’ incentives to make voluntary contributions to any genuinely corporate (as opposed to more local) culture vanish as an organization becomes large, because their marginal impact becomes negligible while their marginal cost does not.
So how can you grow a business without sacrificing culture? The specific tactics are likely to be unique to your organization, but using some fancy math the authors of that paper make two general recommendations. First, make lots of small, decentralized investments in culture. Second, promote from within.
Those make sense to me and I’ll add two more: (1) Measure it; (2) Don’t take it for granted.
– By Tim Hanson