Innovation Blog

Why Your Company Culture is Crucial —  And How to Create a Winning One

By Shlomo Maital

    Company culture is like humorist Mark Twain’s comment about the weather — everyone talks about it, but no-one does anything about it.

     Culture, simply defined, is ‘shared values’ — what we share in common with our fellow workers and managers, regarding what is crucial and mission-critical and what is not.   Culture is created. It is defined from Day One, ideally by the founders, and constantly relearned and strengthened.  Behavior is driven in part by incentives and reward; but the kind of behavior that drives great organizations is based much more on shared values — culture.  That culture is replicated by obsessive emphasis on hiring only those people who truly sincerely embrace company culture.   Indeed,  what kills innovative startups, perhaps more than anything else, is the degradation of what begins as a dynamic change-the-world culture (“it’s not about the money”) to a stagnant what’s-in-it-for-me culture driven by options and cash.

     Don’t take my word for it.  Here is what business leader Tony Hsieh says, quoted by Adam Bryant in his “Corner Office” column, in the New York Times.  Hsieh started LinkExchange in 1996 with some friends, after graduating from college, and sold it to Microsoft in 1998 for $265 m.  He now is CEO for Zappo, an on-line shoe company.

      “…We ended up selling the company [because] the company culture just went completely downhill. When it was starting out, when it was just 5 or 10 of us, it was like your typical dot-com. We were all really excited, working around the clock, sleeping under our desks, had no idea what day of the week it was. But we didn’t know any better and didn’t pay attention to company culture.  By the time we got to 100 people, even though we hired people with the right skill sets and experiences, I just dreaded getting out of bed in the morning and was hitting that snooze button over and over again…..

     “…About five years ago, [at Zappo] we formalized the definition of our culture into 10 core values. We wanted to come up with committable core values, meaning that we would actually be willing to hire and fire people based on those values, regardless of their individual job performance. Given that criteria, it’s actually pretty tough to come up with core values. We spent a year doing that. I  sent an e-mail out to the entire company, asking them what our values should be, and got a whole bunch of different responses. The initial list was actually 37 long, and then we ended up condensing and combining them and went back and forth and came up with our list of 10.

     “Today, we actually do two separate sets of interviews. The hiring manager and his or her team will interview for the standard fit within the team, relevant experience, technical ability and so on. But then our H.R. department does a separate set of interviews purely for culture fit. They actually have questions for each and every one of the core values.”

    Action learning:  

    1.  What are the 10 key core values of your organization?

   2.  What does your organization do, to a) instill these values in new hires, and b) choose new hires in a manner that carefully selects those who live by those values even before they are hired? 

   3. What does your organization do, to ‘walk its talk’ — act in accordance in its values, including in the very smallest of details?