The Ultimate Guide to Building Organizational Culture

“If you get the culture right, most of the other stuff will just take care of itself.”

- Tony Hsieh, Former CEO, Zappos

Now that we’ve established the importance of culture in an organisation’s overall success, it is equally important to understand how these cultures are or can be formed and how they can be nurtured or built.

For startups, Culture = Founder

When one thinks of culture at startups, one imagines teams sharing pizzas, messy whiteboards and the infectious ‘get things done’ vibes. But the truth is, as stated by First Round Review, 80% of the culture is the Founder.

The famous ‘move fast and break things’ is a mantra that Mark Zuckerberg personally follows, and so did Facebook and its employees had to follow, even till today.

If a founder is aggressive, the organisation will grow to be competitive, trying to crush whatever comes in front. If the founder is methodical, the company will focus on building processes early on. If the founder is a generalist, the company will try to enter and master as many business verticals as it can.

At this stage, how truly self-aware the founders are, how they plan to differentiate to do things and the efforts taken by the employees to keep up with their personalities plays a key role in maintaining the cultural dynamics. Hence, having a good fit with the ideology and work ethics of founders is crucial to growing the startup into a sizable organisation.

But as your organisation grows in size, the founder’s influence alone isn’t enough to sustain the loosely defined culture. As one starts to focus on achieving product-market fit, the importance of having a grip on how the culture shapes can take a back seat. But in a blink of an eye, things change when a company gears for scale-up, and it's during this time when the management realizes that an undefined ‘culture’ could hinder their growth prospects. Hence, it’s important to put some words in stone to ensure everyone aligns without your interference.

At this juncture, one might want to deliberately shape the organisation’s culture to ensure it is maintained on autopilot. For this, two approaches to culture building can be followed:

• Top-Down
• Bottom-up

As the names suggest, top-down is a deliberate, measured set of steps taken by the top management with the specific intent to build organisational culture while the other is a feedback-driven, organic and iterative process of identifying barriers and fixing them to build a great workplace culture.

In the next section, we understand the dynamics and how these two culture-building approaches shape in detail so that you can make a conscious choice for your own organisational culture-building efforts. 

Top-Down Approach to building organisational culture

Founders or top leadership management serious about their organisation’s culture will use a top-down approach to actively take part in how the culture is shaped. They define a set of ‘core values’ which is watered down into the organisation to impact its identity, business practices, relationships, etc. Necessary steps are taken to ensure the organisation is aligned to these core values. Using this approach, one ensures focused optimization of resources and streamlined operations.

Building the Top-Down culture includes the following steps:

• Define Core Values: The founder or management’s vision is the driving force of the organisation’s culture while their mission determines its finer nuances such as people, processes, and technology.
• Communicate core values continuously: The organisation initiates clear and precise communication to internal and external audiences about their core values defined and the need for its existence. The defined culture is promoted as an important part of its identity. This ensures the right stakeholders across talent, customers, partners, etc gets attracted to the organisation.
• Manage talent as per values decided: The organisation uses these core values as a blueprint while hiring. It takes specific steps to encourage a certain kind of behaviour among its employees and to penalise any divergence if identified. As a talent management approach, this needs to be reflected in the organisation’s promotion and compensation ideology.
• Make decisions that reflect core values: The organisation lays down a set of rules, norms, practises, and expectations its employees are to be guided by, irrespective of their values and work ethic. This spreads across hiring, workplace rituals, business practices, etc.

Let us understand with an example how an organisation behaves when the top-down approach is implemented.

Case Study: How Zappos defined culture using core values

Zappos, an American online shoe store and retailer, is a great example of how core values can be used to define and implement culture. They have defined 10 core values that primarily focus on wowing customers, prioritizing people’s happiness over profits and embracing individuality over fitting in.

Some key ideas that Zappos has implemented that reflect these core values include:

• Weird talent show: aims to celebrate the unconventional in every one where employees are expected to participate in at least one event
• Pay to Quit: New joiners are offered $1000 to quit post a few weeks of employment as Zappos doesn’t wish to make anyone to feel ‘stuck’ in their jobs
• Decorate conference rooms: employees can showcase their creativity to personalize their conference rooms

As a result, Zappos has managed to create a fun workplace, where employees who fit their culture are further nurtured to practice being customer-centric across its business activities.

With this, one can see how a top-down approach helps you attract, retain and celebrate the right talent to build a mature organisation driven by the vision of the top leadership.

Before you jump to implement a top-down approach for building your culture, it is important to understand the present state of your organisational culture. At Superbeings, we use the Competing Values Framework (CVF) to help you diagnose your current culture by visualizing how it has shaped till now, how your stakeholders perceive your company and identify areas of improvement.

Diagnosing your organisation’s cultural dynamics using Competing Values Framework

Let us learn more about the Competing Values Framework and how it can be used to get a clear picture of your organisation’s cultural dynamics. 

What is Competing Values Framework (CVF)?

Organisational culture makes up a complex discussion and extensive research has been conducted by experts across the world on understanding it deeply. One such highly regarded framework is the Competing Values Framework propounded by scholars Robert Quinn and John Rohrbaugh.

The Competing Values Framework is a useful model for organising and understanding a wide variety of organisational and individual phenomena, including theories of organisational effectiveness, leadership competencies, organisational culture, organisational design, stages of life cycle development, organisational quality, leadership roles, financial strategy, information processing, and brain functioning.

Understanding the Competing Values Framework (or CVF)

Competing Values Framework suggests 4 major culture types which emerge as a result of a balancing act between 2 organisational priorities – Focus and Stability. They are:

1. The Create (Adhocracy) oriented organisation is an externally-focused, highly innovative, and flexible company. This type of organisation likes to take risks, explore creative ideas and encourage diversity by ‘doing things first’. Leadership is visionary, innovative and synergy-creating. In times of uncertainty, this type of organisation has the internal resources of adaptability and flexibility to reinvent itself and make sense of ambiguity and instability. For these types of companies, success is all about innovation and market leadership.
2. The Compete (Market) oriented organisation is externally focused, continually looking to compete, control, and gain a competitive advantage. It focuses on faster execution or ‘doing things fast’ in order to outdo its competition and lead the market. This type of company operates through economic transactions, seeking to acquire new clients, contracts, and sales. Their top priorities are achieving goals, commercial success and financial gains.
3. The Control (Hierarchy) type organisation is internally focused, run by control, order and continuous improvement. It focuses on controlling outcomes or ‘doing things right’ to achieve maximum. The environment in this type of organisation is process-oriented and provides a highly formalized place to work. Leadership is quality-focused and has a long-term vision for the organisation as a predictable, stable structure based on clear rules and formal policies.
4. The Collaborate (Clan) type organisation is held together by shared values like stability, cohesion, participation, and succeeding as a team. It focuses on bringing the best from everyone by ‘doing things together’ to achieve desirable outcomes. This is a people-focused organisation where employees are deeply engaged, leaders are expected to be mentors, and there is a high emphasis on personal development and fulfilment through work. Management is focused on building a sustainable proposition with a generally risk-averse approach.

How is Superbeings using the Competing Values Framework?

In order to access your organisational culture, we use an 8 Question Template (DIY and run on google form) that you can download below:

Access Pulse Survey Template

Based on the results, our tool is able to create your culture profile where one can visualize how your organisation is represented across the 4 quadrants of CVF. One is clearly able to identify the 1 or 2 dominant values that have been unconsciously adopted by your organisation throughout the period of your existence.

Post this self-discovery, you can either continue to reinforce the same dominant values identified and take necessary decisions to optimize your resources to ensure your organisation is aligning with them.

Else, you can initiate an improvement process for instilling new values to shape a new organisational culture and make necessary decisions to ensure alignment. For this, you can continue to adopt a top-down approach as described in the previous section.

In either case, whether you continue with your existing culture as per your CVF report or work towards defining a new culture, one should always consider employee satisfaction and overall happiness with the implemented company culture.

For this, employee feedback is a great mechanism to determine and measure the impact of your culture-building efforts. In the next section, we will understand the drivers of this measurement exercise.

A representation of culture report generated on Superbeings dashboard

The importance of feedback in the dynamics of culture-building 

At Superbeings, we help you determine if your employees and stakeholders are happy with the current company culture. Here, by using employee feedback tools, we help you generate reports that showcase how your organisation fares in the areas across Job Satisfaction, Engagement and Manager Satisfaction that are determined based on various drivers across each of these spheres.

Engagement: focuses on understanding if your employees are engaged and interested in their daily activities at work. Some drivers that we measure include challenge, relatedness, distributive justice, variety, competence, etc.

Job Satisfaction: focuses on understanding if your employees are satisfied with their present job considering all factors. Some drivers that we measure include role clarity, job security, work-life balance, performance expectations, organisation direction, etc.

Manager Satisfaction: focuses on understanding if your employees are satisfied with their present managers. Some drivers that we measure include managing the future, hierarchy, coordination, culture, relations, etc.

With this knowledge, one can have better clarity of how your employees are responding to your culture-building efforts.

A representation of report generated on Superbeings dashboard

In case of dissatisfaction, due to the present complexities and nature of your organisation, embarking on a complete overhaul of the culture via a top-down approach might not be feasible. Hence, results from the employee feedback can be used to initiate a culture improvement process that would help shape your organisational culture. This forms the basis of the bottom-up approach, as covered in the next section.

Bottom-Up Approach to building organisational culture 

While a top-down approach can be viewed as the belief system of the organisation, where it actively corrects the daily behaviour showcased within an organisation, the bottom-up approach is the ‘behaviour system’ of the organisation itself. Here, continuous efforts are taken to iteratively improve the various aspects of the organisation that helps it create a great organisational culture that people enjoy and look forward to being a part of.

These aspects could include things like work-life balance, how HR policies across rewards & recognition are designed, leadership principles followed and execution frameworks implemented by managers.

In this approach, employee feedback plays a very important role, where the organisation invites its team members to participate in each step of management, allows its employees to express their true selves, apply their decision-making styles and help shape the organisational culture gradually.

Thus, the bottom-up approach helps define an overall organisational identity that is driven by employee feedback. We will dive deeper into these feedback mechanisms in the next chapter.

In the end, both top-down and bottom-up approaches have their pros and cons and must be carefully evaluated before implementing while also regularly monitored for results to determine continuation.

Some of its key aspects that differentiate bottom-up from the top-down approach include:

• From ‘One Shared Culture’ to ‘Culture as a behavioural umbrella’ - instead of sticking to core principles and course correcting, in a bottom-up approach, the organisation’s habits and behaviour that drives the strategy is defined based the on employee’s own perception.
• From ‘Strategy for all’ to ‘Strategy at every level’: Instead of declaring a one-size-fits-all strategy for the organization, in a bottom-up culture, one emphasizes taking efforts to translate organizational goals to team level KPIs, which is iterated based on employee feedback and performance.
• From ‘Purpose statements on websites’ to ‘Purpose as a direction’: Instead of writing down manifestos that may not efficiently trickle down the organization, the management accepts the voice of the employees via their feedback that helps create a collective sense of purpose.  

At Superbeings, we help you understand your organisation’s cultural dynamics, make informed decisions about your necessary plan of action and maintain your culture at scale with our automated tools.

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Template: Evaluate your organisational culture based on the Competing  Values Framework