A company's culture can significantly influence employee attraction, engagement, retention and the overall workplace environment. The right atmosphere can motivate employees and generate desired results, but the wrong one can cause low morale, turnover, a damaged company reputation and ultimately declining business growth.
If the Great Resignation taught us anything, it’s that company culture is the life-blood of an organization and employees who don’t feel a sense of belonging or cared for by their employers, will quit.
There are many different types of company culture, and the one that's right for your business will depend on various factors.
What Are the Different Types of Company Culture?
An organizational culture consists of a company's shared beliefs and values that serve as behavioral guidelines for leaders and employees to follow. With so many types of company culture, it's important for businesses to adopt the one that fits their needs and goals.
This will depend on the following factors:
- Company goals
- Size of the company
- Desired return on investment
- Core values
- Products or services the company produces
- Employee work styles
Once you understand your company's goals and characteristics, consider the following types of company culture and how they align with your business:
1. Clan Culture
A clan culture is also known as a collaborative culture. In this type of company culture, employees treat each other like friends and family. Everyone in the office or business knows each other and shares a similar worldview and interests.
The clan culture is most common in small and family-owned businesses. In this atmosphere, employees more commonly engage in teamwork than individual tasks and projects. Experienced employees mentor new employees, and everyone has equal opportunities, value, and chances to share ideas and participate. Employees typically enjoy this type of culture, which causes them to be more productive and committed to their jobs and employers.
If your business is small or family-owned, the clan culture can help your company succeed and bring in more clients or customers. Larger companies may struggle to maintain this culture, and it may limit their growth and innovative thinking.
2. Hierarchy Culture
Large or traditional organizations typically have a hierarchy culture, which is also known as a control culture. In this structure, leaders and employees are clearly defined with specific responsibilities, and there are various management levels. Leaders at the top carefully make the decisions, and they minimize risk by basing decisions on previously proven strategies.
Because businesses with a hierarchy culture emphasize evaluation and planning in their practices, these values work best for high-risk companies that prioritize security or safety such as finance, health care, government industries, and oil and gas companies. Hierarchy culture prioritizes the following:
- Tradition and rules
- Preventing mistakes
- Managing failure
- Organization
- Attention to detail
- Structure
The hierarchy culture can lead to significant efficiency. However, some employees may find it too old-fashioned with little room for flexibility and creativity.
3. Customer-Focused Culture
In a customer-focused culture, companies typically prioritize satisfying customers over personal accomplishments. Even in industries where employees have little interaction with customers, a customer-focused atmosphere emphasizes providing the best service.
Companies with a customer-focused culture expect employees to consistently consider how consumers will benefit from their products, and they closely monitor reviews, surveys, and social media for feedback. Companies with this type of structure often provide 24/7 support and expect employees to immediately respond to messages. They provide employees with the resources they need to give customers positive experiences.
Employees in a customer-focused culture typically make their own decisions and do what they need to do to achieve customer satisfaction. They often experience a sense of pride because they have opportunities to make others happy. The downside to this culture is that if taken to extremes, it can make employees feel unimportant or neglected since customers are the main priority.
4. Market-Driven Culture
A market-driven culture is also known as a competitive culture, because it prioritizes competition. Companies with this type of atmosphere strive to dominate the market, and leadership makes decisions based on what will bring the company the most success. They are willing to take risks and adapt to changes if it will help them reach their goals.
The market-driven culture operates on a hierarchy, but it has fewer layers than the hierarchy culture. Employees often work diligently and strive to be the best in their departments to move up to management positions.
Companies with a market-driven culture value results, market share, and return on investment over individual achievements. They expect employees to consistently produce quality products or services, and they offer monetary incentives such as bonuses to motivate their workforce. Their employees are often high-performing because market-driven organizations typically attract competitive individuals.
The market-driven culture is ideal for companies that are sales-oriented and want to release products or services quickly to outperform their competition. The competitive nature of this culture can cause employees to become burnt out, especially if they find that basing their success on money is unfulfilling.
5. Purpose-Driven Culture
A purpose-driven culture focuses on making a difference for the greater good. Employees strive to reach goals for a larger purpose, which could relate to human rights, the environment, or sustainability. They are more motivated by the company's goals and a desire to make a difference in the world than they are by individual achievements.
Companies with a purpose-driven culture prioritize making a difference in their communities over generating profits. They often donate part of their profits and time to local charities. Individuals in a purpose-driven company are often connected by shared values.
This type of culture is ideal for non-profit organizations, but it can also benefit for-profit companies if they have deep values. Since they focus more on giving back to the community than they do on profits, companies with this culture typically make less money than they potentially could. However, this culture often leads to high employee retention rates because it gives people opportunities to make a positive impact on the world.
6. Innovative Culture
A company with an innovative culture prioritizes new ideas and processes to benefit clients and customers. They consistently seek ways to improve current technology, find new solutions, and try new ideas. They value innovative ideas over traditional methods, and they expect employees to regularly experiment and produce new ways of doing things.
An innovative culture allows employees to practice creativity and freely try new ideas. While this often motivates and excites employees, it can also cause some team members to feel burnt out or overwhelmed. The innovative culture is ideal for companies that want to push traditional boundaries and produce the latest products or services for their clients.
7. Creative Culture
Similar to the innovative culture, the creative culture strives to provide new services, products, and stories for clients, customers, or audiences. Companies with a creative culture focus on how they can bring their ideas to life. They typically operate on teamwork and expect employees to collaborate, contribute ideas, and create new experiences for consumers.
In this type of culture, employees often support and feed off each other's creativity. They typically form strong, positive relationships, and they utilize their time efficiently to bring visions to life. Some employees in this environment may feel overwhelmed by the pressure to generate creative ideas.
Many TV networks and film companies have a creative culture because they consistently produce new shows and movies. This culture is ideal for any company that produces products, services, or content, especially for entertainment purposes.
How to Change Your Company's Culture
If a company is not intentional about its culture, its leadership and workforce will naturally develop one. This culture could be positive or negative, but a business can always shift its culture if needed. If your company culture is damaging business operations and employee satisfaction, consider the following tips to change your culture:
1. Identify Why You Want to Change Your Company's Culture
Companies change their culture for a variety of reasons. It's important to identify why you want to change your company's culture, so you know what type of goal you are working toward. Common reasons companies change their cultures include:
- Ineffective operations
- Low employee morale
- Poor financial performance
- New leadership
- Company strategy changes
- Lack of accountability
2. Choose the Best Culture for Your Business
Before changing your company's culture, you must decide on a type of culture and clearly define what that will look like for your company. Start by identifying your company's current goals. What is most important to your company? It may be achieving a high return on investment, producing the latest technology, or making a positive impact on the world.
You can implement a purpose-driven culture if you want to give back to your community, or you can shift to an innovative atmosphere if you feel that your company needs fresh ideas to get ahead. Alternatively, you could adopt a market culture if your industry is saturated and you want to stay ahead of the curve.
Next, observe and communicate with your employees to find out how they work best and how you can help them work more efficiently. If your workforce consists of creative thinkers, a creative or innovative culture may help them thrive.
If you are a small business, or you notice that many of your employees feel overwhelmed, you can implement the clan culture to encourage supportive teamwork. Determine what your company's strengths and weaknesses are, then choose a culture that will present a solution for the weaknesses while also supporting what you already do best.
3. Define Your Values and Behaviors
Once you choose a company culture, define the values and behaviors your workforce will adopt to develop that culture. For example, your company may benefit from more effective collaboration and a creative atmosphere. If this is the case, you can choose teamwork as one of your core values and encourage your employees to practice clear, positive communication.
It's also important to decide which aspects of your current culture you want to retain. You don't have to adhere to the exact characteristics that embody one culture. If it works for your company, you can blend different cultures to fit its unique goals. Identify which aspects of your current culture you want to keep and which need to shift.
When you evaluate your company's culture, focus on important factors, such as:
- Vision
- Narrative
- Values
- Employees
- Practices
- Office environment
4. Train the Company's Leadership
A company's culture involves every employee, but leaders can play an important part in shifting culture. Individuals in management and other leadership roles can set positive examples. They can put into motion the cultural shifts your company wants to implement.
Train company leaders so they know how to motivate, incentivize, and communicate with employees to create changes in the company culture. Encourage individuals to develop a leadership style that fits them and the company culture.
Anyone can be a leader when it comes to influencing a company's culture. No matter what position you hold, you can step up and lead by setting an example. Practice the cultural changes you want your company to embody so you can encourage others to follow.
5. Gather Feedback
Communicate with your workforce and gather feedback about how they feel in their positions with the company. Do they feel motivated or overwhelmed? Are they excited about the company's future and their role in it, or do they wish they had more creative freedom to contribute ideas?
Gathering feedback can help you gauge employee satisfaction and make adjustments to the culture where changes are needed. It's also important to continue gathering feedback so you can track the company's progress and evaluate how successfully the company adapts to the cultural changes.
You can also measure results to keep track of how well the company culture is improving. Distribute employee surveys and assessments to effectively manage these changes within the company.
6. Have Patience
Changing company culture takes time. It could take months or years to start seeing significant results, so it's important to be patient. It's a continual process, so begin where you can and continue to make positive adjustments as you go.
Strengthen Your Company Culture With Bundle
Different types of cultures work for different companies, so it's important to choose the organizational culture that's right for your business. Once you know which cultural changes will benefit your workforce, you can begin to shift your company's culture in a positive direction.
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