Imagine walking into a new job and not getting along with anyone. Imagine being unable to do good work because you are not used to the level of bureaucracy and red tape that you need to go through. Or, maybe there are not enough processes in place for you to function effectively since you feel lost. Imagine feeling uncomfortable because you have trouble communicating in the same manner as your co-workers. Imagine feeling uncomfortable because the CEO takes on such a lax attitude about issues that you find extremely important. These are all issues of company or corporate culture, and being in a culture that you are comfortable with and thrive in is often ignored.
In my career, I have experienced a variety of cultures and know first hand how much of an impact a company’s culture can have on your performance. When I started off in my career, I was very unhappy working long hours at an extremely competitive firm. I didn’t like some of the people and I didn’t like the toxic culture. The firm also had an extremely high turnover rate due to this culture. The firm had the attitude that they could consistently burn out the majority of their new people and hire more to replace them. The people who survived would be the ones to take leadership roles in the company.
What is company culture?
According to Investopedia, company or corporate culture refers to, “the beliefs and behaviors that determine how a company's employees and management interact and handle outside business transactions. Often, corporate culture is implied, not expressly defined, and develops organically over time from the cumulative traits of the people the company hires. A company's culture will be reflected in its dress code, business hours, office setup, employee benefits, turnover, hiring decisions, treatment of clients, client satisfaction and every other aspect of operations.”
Why is it important?
Corporate culture is important because it will dictate your experience within that working environment. The corporate culture can determine how much and how you are paid. Does the company foster extreme competition or strong collaboration among its employees? A fixed bonus pool with payouts determined by individual performance will generate more competition, whereas stock option ownership among all the employees will incentivize them to collaborate.
Corporate culture determines how decisions are made and how work gets done. Some work environments are more bureaucratic. You must go through multiple levels of approval across various functions before a decision can be made. You may even need approvals at various levels before you can download a new software. On the other hand, some environments are much more entrepreneurial. You have to figure out how to get things done yourself without any handholding. When it comes to doing business in these environments, you’ll have much more latitude when it comes to decision making.
Corporate culture may also determine how much you work and ultimate impact your work/life balance. If you work in a company that expects its employees to work 80 hours per week under a lot of pressure, you need to be okay with that and put in all those hours in order to succeed. If you work in a company that encourages working from home, you need to be able to operate effectively with minimal supervision.
It is important to understand the differences between various corporate cultures and understand what type of environment you would thrive in. If you are in an environment where you are not comfortable, how will you produce high quality work over an extended period of time? How will you deliver value to your company or your clients? You may even dread going to work every day. Trust me, that is not a situation you want to be in. I’ve worked in environments where I was bored to death because of the slow pace of the business and overwhelming bureaucracy. I’ve also worked in a company that expected us to work long hours with passive aggressive managers, which really ruined my experience.
How do you determine culture?
There are various ways to get a feel for the culture of a company before you work there. You probably won’t be able to pinpoint everything if you are just interviewing, but you can figure out whether or not to eliminate that company from your prospects right away. During the interview process, you can ask about culture, how work gets done, and how decisions are generally made. These probing questions will help you obtain a sense of what the work environment is like. If you get to take a tour of the company, you can watch how people interact and talk to each other. Do people work in open cubicles or enclosed spaces? How do people in the cafeteria interact with each other? In addition, you can go on websites such as Glassdoor to look up reviews of companies and to get opinions on their respective corporate cultures.
I’ve also created a framework below that will help you determine the corporate culture of a company. There is an operations axis and a people axis. The operations part of a company culture ranges from bureaucratic to entrepreneurial. The more bureaucratic a company, the more approvals that are needed, the more people that are involved, and the more paperwork that needs to be done before a decision can be made. More often than not, there are many defined and documented processes and procedures for you to follow in completing your everyday tasks. On the other hand, the more entrepreneurial the environment, the more freedom you have in performing your job. You have less processes to follow but must rely on more of your own creativity and drive to get work done. You may have less levels of approval before decisions are made, but when mistakes are made, the burden falls on you. I know people who would perform well in one end of the spectrum but not the other. I have a friend who thrives while working in a large corporate environment. He is a master at navigating processes and designing his own processes for other people. Therefore, he has been extremely successful and has risen up rather quickly. On the other hand, I have another friend who works at a lean, fast growing technology startup. He is extremely creative, flexible, and driven. As a result, he has also risen extremely quickly and taken an important leadership position within his company. I also know an entrepreneur who built his company from scratch. He was never the kind of person to work for someone else, and instead needs complete freedom and independence to operate how he wishes.
The people axis ranges from collaborative to competitive. In a collaborative environment, people work close together to accomplish a common goal. They are more likely to cooperate and help each other out. On the other hand, a competitive environment drives people to perform at their best and to focus on their own improvement rather than anyone else’s. Sometimes, the positive performance of someone else may result in their own detriment, leading to a greater chance of sabotage. This usually happens when there is a fixed bonus pool with the majority of the bonuses going to the top performers. Some companies may even cut the bottom 10% of employees every year. I know people who have worked in investment banking where the entry-level analyst class is broken out into buckets. The bankers in the top bucket will get the highest bonus. As a result, these bankers may secretly want to outperform their peers in order to earn more money.
There is also a double arrow for willingness to change. Some companies are more willing to adjust and be more flexible to make diverse employees feel more comfortable. A high willingness to be flexible can make a work environment much more welcoming for a greater number of people. This flexibility can be a huge advantage for a company if it wishes to attract a wider range of people with more diverse viewpoints. However, if you still don’t fall within that range of flexibility, you still won’t be comfortable.
There may also be micro-cultures within the overall corporate culture. For example, a large company may be overall extremely bureaucratic and slow moving. However, there may be a small team within that company that moves much faster and has much more flexible rules for handling business. Although this group still has to adhere to the overarching guidelines, the specific manager for this group may be much more free flowing, thereby instilling a different culture for his direct reports. Problems may arise when the micro-culture of this group directly clashes with the direction and viewpoints of the overall culture.
Use this framework to understand either where your current company lies or where a potential employer lies. Then, think about whether or not you would thrive in that environment.
What happens if you don’t align?
If you don’t align with a corporate culture, you need to either be flexible and adjust to your environment or move on to a different employer. Otherwise, you will eventually hate your job and your employer. You will feel much more stressed and your productivity will drop. There are many people who hate their jobs. They do it only for the paycheck. You do not want to be one of those people.
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