Ask someone about the culture at their current place of employment and they may tell you “It’s very stressful. It’s a high-pressure workplace” or “It’s a fun place to work. We have video games in the break room and a kegger every Friday evening.” These statements are actually more about the climate than the culture. People often confuse the two. The climate of the workplace is often impacted by the culture of the organization, but culture and climate are two different descriptions of an organizational environment. Organizational culture is the set of values, customs, and beliefs that guide the way its people interact. Organizational climate is a description of what it feels like to work there.
Climate can include the perks of the workplace, such as the environment, the tools provided, and the available “extras”. It also includes the working relationships within a team or department and can be specific to a certain area within the organization. Some of these climate factors are a direct result of culture; others are completely unrelated to culture. Corporate climate is sometimes described as the way members of an organization experience the culture of their company.
On the other hand, organizational or corporate culture is a system of shared assumptions, values and beliefs that guide or govern how people behave in an organization. The culture of an organization provides boundaries and guidelines that help members of the organization know the correct way to perform their jobs or to interact with other people. Where a climate might vary from department to department, culture is more pervasive across the entire organization.
Corporate climate is sometimes described as the way members of an organization experience the culture of their company.
Some organizations create a document that might define their desired culture while other organizations choose to hang posters that attempt to communicate their culture. But culture is not created by documents or posters. Culture is defined by and flows from the top of an organization. It reflects the values and beliefs of the leaders regarding people and relationships. The way an organization’s leadership treats people eventually influences the way everyone in the organization understands and incorporates the culture.
Culture in a small organization is a direct reflection of the current leadership and their values and beliefs. In a larger organization, such as a multinational corporation, culture becomes embedded within the organization and changes more slowly as leadership changes. In dispersed locations, culture becomes a combination of the corporate culture and the values and beliefs of leadership at the local level.
A strong positive culture values and respects people, builds trust, emphasizes communication, values teamwork and collaboration, expects honesty, and practices equality and inclusivity. A poor culture is generally just the opposite of these values – valuing profits or politics over people. A good culture leads to an engaged and more satisfied workforce, which in turn leads to increased productivity, quality, and innovation. It’s important to note that the impact of culture is not restricted to those who work inside the organization. Culture, be it positive or negative, spills over from employees within the organization to its customers and others the organization impacts. Therefore, a positive culture leads to more satisfied customers.
Southwest Airlines, a company known for its positive culture, is guided by the value: “We treat our employees like family. Our employees then treat our customers as if they are guests in our homes.” No wonder then that Southwest ranks high in customer satisfaction and has continually grown at a rate faster than their industry.
As another example, the author once was part of an organization that had a familial climate. Within the organization people worked well together and had strong relationships. The culture, however, was based on a belief that the strong survive, and that politics and conflict would weed out the weak. Of course, this wasn’t a stated culture. Rather it was the culture that the organization’s leadership lived by, and it filtered down throughout the company, sometimes creating a conflict between the climate and the culture.
A positive culture must be continually nourished and reinforced. As mentioned, culture first flows from leadership by demonstrating the values and beliefs that are desired for the organization. Of course, values cannot be faked, so demonstrating the values and beliefs may require some personal growth on the part of the leader(s). Once the leader has thoroughly embraced the values and beliefs, they must be inoculated into the organization. The primary method for doing so is by strongly and consistently modeling them at every opportunity. As the organization begins to adopt the culture, leadership needs to publicly recognize and reward the demonstration of the desired values and beliefs. As the organization sees the desired culture modeled and recognized, it will begin to filter down through various layers of leadership and throughout the organization. Strong, positive cultures create strong, successful organizations.
Ken is a business strategy consultant and leadership coach. His passion is helping companies and people grow and succeed. With an engineering degree and an MBA, he spent more than 20 years working in M&A and business development in the corporate world before founding New Horizon Partners, Inc. in 2002. His consulting practice works with a wide variety of industrial companies, helping them make good decisions about where and how to compete and building their leadership capabilities. To read other articles by Ken on business strategy and leadership, visit the New Horizon Partners website.