The Genesis and Evolution of Company Culture

“Culture” doesn’t begin when you sit down to write your first culture document or when a company publishes a “values statement.” It is embedded in the people that are hired and how they interact with each other from the very first day. In start-ups, founders may be long time friends or colleagues from previous jobs which have a rich history of shared cultural norms, but what about the first wave of employees? What values or culture do they believe in? How do they make decisions and interact with each other? What about the third wave of employees? Regardless of, or potentially in spite of, whether a company has formally defined their “culture,” the company has one. 

So let’s explore the roots of culture–how does it happen? Whether you think of a company as having a good culture or a bad (toxic!) one, that culture is a reflection of innumerable interactions which eventually become codified; each interaction as a thread in the larger tapestry that represents the culture of a company. 

Let’s use example scenario 1a from above to explore how this plays out. In this scenario each person might provide some deeper logic as to why their answer (3cm or 4cm) is better, but barring some absolute requirement, like a regulatory mandate, eventually a decision will have to be made between them. Perhaps Bill wins over Linda by saying “every other manufacturer has been using 3cm for 50 years.” In that scenario we’re providing one cultural anchor point to “we follow industry standards.” Perhaps Linda wins over Bill by saying “we want to be a leader in safety, so 4cm shows that we’re committed to safety over cost.” One point to “safety over cost.” 

No single interaction defines a culture. But as scenarios play out each day, for hundreds or thousands of decisions, this creates a pointillist picture of a company’s culture. Nobody writes these decisions down, no one records the logic that went into each one, and people rarely consider the broader implications such decisions might have–this is simply the organic growth of a culture through time. Each person in meetings, working on projects, getting an email update, chatting at lunch, etc. is forming a picture of what the company stands for, how logic is applied, what tradeoffs are accepted, and how people are expected to interact with each other. Each individual ingests and then manifests the culture through their own lens. However, there are some important ways in which cultural development can be directed and accelerated. 

The most notable of these is through leadership. As you’ve probably noticed in the above example, the final determination usually dictates the cultural conclusion. In most organizations, though not all, decision making authority is relatively centralized and hierarchical. As a result, those people who wield decision making power also wield the power to drive cultural evolution. 

Consider a scenario in which a CEO consistently chooses to pay more in costs in order to make a safer or higher quality product. Regardless of the efficacy of those decisions, the people who work for the CEO will begin to recognize that pattern and react to it. Whether it is projects, people, ideas, or tradeoffs, those which align with the decision making pattern are far more likely to be accepted.

Leadership doesn’t necessarily need to be hierarchical to be impactful. Perhaps a particular engineer on a team works late to ensure the team delivers a project on time, holds a high standard for writing unit tests, or doesn’t believe in answering work emails while on vacation. A public demonstration of values alone can be an act of leadership. Pragmatically, creating a public demonstration of values can be further cemented by leadership by promoting those values which align with those of the company, i.e. if leadership promotes that particular engineer because they work late, hold high standards, or value work-life balance, we are immortalizing what the company values.

The other notable manner in which cultural development can be directed or accelerated is through evangelization. By actively providing either prospective or retrospective reasoning for decisions, you can direct the development of a company's culture.

If company leadership constantly states “we are a budget player,” it creates a basis on which other choices can be based–a focus on price, a comparison to other companies or products, etc. In a retroactive scenario, for example a CEO stating “we chose to charge for carry-on luggage so that we can lower ticket price for customers who don’t have carry-on luggage” carries an enormous amount of cultural signal to the deepest levels of the company. It can also avoid the cultural ambiguity of “did we do it because we’re greedy?”

If leadership promotes those people who work extended hours and promulgate the view that the employee is getting promoted because they are a “hard worker” then we maximize the cultural impact of that particular value.

I would like to highlight an important caveat to this particular means of culture direction and acceleration: it operates in conjunction with the actual outcomes of an organization. A leader or an organization can lose the entirety of their credibility by operating in a manner inconsistent with their stated cultural ideals. 

There are innumerable organizations who have succumbed to this outcome, with Boeing being the most recent example. Regardless of the company value statement being “.. a shared commitment to our values—safety, quality, integrity, and transparency—above all else. We believe that compliance and ethical behavior are everyone's responsibility.”, the outcomes demonstrated by the company can completely negate any evangelized cultural statement. 

Similarly, if a company publicly states that work-life balance is an important part of their culture but promotes only those employees who work extended hours or make drastic personal sacrifices, other employees will see through the facade. 

While it matters both what the company publicly champions and what the company rewards in a pragmatic manner, culture is determined exclusively by the actual behavior of the individuals that makeup the whole of the organization. Whether that actual behavior is promotion, compensation change, public acknowledgement, social accolades, punishment, retaliation, negative feedback, etc. the reality is that a company can’t just “talk the talk” they also have to “walk the walk” in creating their desired culture.