The culture bible: When should a business codify its values?

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There’s something about organisational culture that seems to attract jargon and B.S. at an alarming rate. It’s the concept that has launched a thousand Medium thinkpieces.

That’s because it’s so easy to speak about culture and values in vague and superficial terms. But what the hell is culture, even?

Edgar Schein, a since retired organisational culture scholar at MIT’s Sloan School of Management, had a great definition: “culture is a pattern of basic assumptions—invented, discovered, or developed by a given group as it learns to cope with its problems[.]”

If the senior management of the business isn't clear about their own values, you’ll struggle to communicate that to new staff members once the hiring process begins.

As Schein saw it, a business’s culture and values were the net results of common learning experiences. “Because of these common experiences, over time this group of people will have formed a shared view of the way the world surrounding them works, and of the methods for problem solving that will be effective in that world”.

A culture can’t help but develop. Ultimately, if you’re in an enclosed workspace with others for 40+ hours-a-week, conventions will develop. The question then is at what point should you move to formalise and codify what makes your business what it is.

Netflix famously publicly shared its ‘culture deck’ in 2009. It’s a 125-slide presentation that’s seen as a seminal forerunner of codified values. “We’re a team, not a family,” the deck explains. “Managers hire, develop and cut smartly, so we have stars in every position. Actual company values are the behaviours and skills that are valued in fellow employees.”

Each employee, it explained, is subjected to a keeper test: if that employee wanted to leave, would the manager fight hard to keep them? If the answer is no, then that person should be given a severance package and replaced. It sounds somewhat Hobbesian, but Netflix’s cultural bible isn’t praised because it’s heartwarming.

It’s praised because it clinically diagnoses what the business was and wants to be. It is, as the academic Dennis Passovoy told the Huffington Post, “a reflection of the community that exists within the company, and that’s unique to them.” To be sure, the presentation leaves zero doubt about what type of organisation Netflix is.

These sorts of practices – of defining culture – might seem beyond the pale for a recently formed business. But actually, for many startups, defining their values has been a crucial aspect of growing and, particularly, hiring.

Tom Shurville is the managing director for the digital agency Distinctly, a business he founded in 2009. Now at 15 employees, he characterises defining the business’s values and unique culture as a “very important discipline”. “It seems like something that just evolves,” says Shurville, “but you need to be far more prescriptive than that.

I was blinded by the things that seemed obvious to me, so I didn’t look for them in others.

“Business values should be defined at the earliest possible opportunity. If the senior management of the business isn't clear about their own values, you’ll struggle to communicate that to new staff members once the hiring process begins.”

It’s an experience mirrored on a smaller scale by Lara Sengupta of CorkYogis, an upstart social enterprise that makes yoga mats. Sengupta has taken care to define the business’s purpose from the very start, especially since the company has a humanitarian element to it. Now looking to hire a salesperson, finding someone who matches CorkYogis' ethic is important.

“We want someone who is going to deliver results and tell our story in a passionate way but at the same time, we don't want someone who is going to be overly pushy or aggressive, as this is not what our business is about. We want to focus on partnerships where all parties win.”

By doing this, Sengupta is hoping to leapfrog a familiar issue in the startup world: cultural fit. The entrepreneur Kevin Holler wrote a brilliant article for BusinessZone where he detailed how complex cultural fit can be.

Holler recruited and lost three co-founders for various reasons. The problem, he identified in retrospect, was that the proposition was never clearly defined. His co-founders would get onboard and realise quickly that it wasn’t for them. “I was blinded by the things that seemed obvious to me, so I didn’t look for them in others,” he wrote. “Risk, passion, belief and getting out of my comfort zone were not a problem for me.”

The things that were obvious to him, as Holler put it, were ultimately the crucial reasons behind the failed partnerships.  And Holler’s lessons are as true for any hiring, according to Distinctly’s Shurville. “We define our values and drum it in from the very start. The earlier, the better: ensure that it’s highlighted in your interviews, talk it through in new staff induction meetings.

“From this point, reiterate these values. Praise staff when they do something that reflects these values and share this with all the team. It has been mentioned before but the most important way for all staff to understand and adopt these values is for the senior management to lead by example. For that to happen, it needs to be defined from the beginning.”

About Francois Badenhorst

Francois

Francois is the deputy editor of BusinessZone and UK Business Forums.

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