What is corporate culture, and why does it matter? John Kotter, one of the world’s leading writers on the topic of corporate culture, describes “culture” as follows:

“Culture refers to norms of behaviour and shared values among a group of people. Norms of behaviour are common or pervasive ways of acting that are found in a group and that persist because group members tend to behave in ways that teach these practices to new members, rewarding those who fit in and sanctioning those who do not.

Shared values are important concerns and goals shared by most of the people in a group that tend to shape group behaviour and that often persist over time even when group membership changes.”i

A strong and healthy corporate culture can prove a powerful motivating force for employees, and evidence shows that a well-established corporate culture can significantly affect a company’s bottom line.ii The theory asserts:

“In a healthy culture, employees view themselves as part of a team and gain satisfaction from helping the overall company succeed. When employees sense that they are contributing to a successful group effort, their level of commitment and productivity, and thus the quality of the company’s products or services, are likely to improve.”iii

How startup leaders can build corporate culture

Since corporate culture is so obviously an important asset for start-ups, how do company leaders harness this powerful tool?

“Be” the culture

According to Inc. magazine, corporate culture is to a large degree established by the“charismatic activity and leadership of the founder.”iv The article argues that corporate culture comes mostly from the top. It is up to the company leader to articulate and demonstrate the corporate values, mission and norms of behaviour that he or she wishes employees to adopt. Startup founders have to “be” the corporate culture in a company’s early days.

Make formulating the corporate culture a participative process

An effective strategy for instilling a productive corporate culture in a start-up is to develop internal communication pieces that creatively convey the key messages of your company’s culture: its mission, goals and values. As a best practice, invite the participation of all employees during this process. This not only helps to emphasize key messages about the corporate culture itself, but also to obtain buy-in from everyone in the company who contributes to the process

Reinforce the corporate culture

Once the company’s values, mission, goals and norms of behaviour have been established, they will require continual reinforcement. One way to do is is to institute regular company activities that reflect your corporate values. For example, if a company places a high value on effective teamwork, starting a company softball team or participating in some other form of team-based leisure activity will underpin teamwork as a positive and rewarding exercise for your staff.

Hire people who “get” your corporate culture

Hiring people who share the same values and behavioural norms as those prized at your company will help strengthen your company’s corporate culture. This will also ensure that new employees fit in well with your current team.

For an in-depth discussion of the history and importance of corporate culture, see the corresponding entry in Inc. magazine’s online directory of business terms.

References

iKotter, J.P. (1996). Leading Change. Boston: Harvard Business Press.
iiKotter, J.P. and Heskett, J. (1992). Corporate Culture and Performance. New York: The Free Press.
iiiReference for Business. (n.d). Corporate Culture. Retrieved May 27, 2010, from http://www.referenceforbusiness.com/small/Co-Di/Corporate-Culture.html.
ivInc. com. (n.d.). Corporate Culture. Retrieved May 27, 2010, from http://www.inc.com/encyclopedia/corporate-culture.html.