Why Culture Matters for an Organization

Every organization has a culture. Whether it is willfully ignored, passively observed or intentionally nurtured, culture exists — and it is often instantly recognizable to internal and external constituents alike. Leaders who recognize the value in defining and cultivating culture will better position their firms to prosper through various market cycles and eras of disruption.

Why Culture Matters for an Organization

Ok, what is it?

Workplace culture might sound like one of those overused yet fuzzy concepts that is long on buzz but short on substance. On the contrary, definitions from industry experts are relatively consistent. Edgar Schein, professor emeritus at the MIT Sloan School of Management and one of the most well-known theorists working with organizational culture, articulates the concept as simply the basic assumptions and beliefs shared by members of an organization.

Yet, while employees are the personification of an organization’s culture, it is hardly an initiative that should be pigeon-holed in the human resources department. In fact, the interplay between a company’s culture and business strategy is both vital and inseparable.

In the January-February 2018 issue of the Harvard Business Review, the authors of the article The Culture Factor, state that “strategy and culture are among the primary levers at top leaders’ disposal in their never-ending quest to maintain organizational viability and effectiveness.” But all too often, leaders get hyperfocused on strategy and disregard their role in shaping culture. As The Culture Factor describes, the alignment of personal values, drives and needs within an organization can create an abundance of energy toward a shared purpose and expand a company’s capacity to thrive.

Peter Drucker famously said, “culture eats strategy for breakfast.”

Does culture eat strategy for breakfast?

With all due respect to Drucker, Reed Hastings of Netflix disagrees. Netflix is famous for its unwavering focus on maintaining the culture that made the company strong in its early days. As a testament to that commitment, the company created the now mythical Culture Deck, a one-hundred-and-something-page PowerPoint that was initially given to all new hires and eventually given to all applicants. While Mr. Hastings has clearly exhibited the importance of nurturing a culture in a company, he actually maintains that culture and strategy do not need to be forced ranked – both are mission critical.

Stakeholder Midstream co-founders, Gaylon Gray and Rob Liddell, tend to agree with Hastings. They see strategy and culture as inextricably linked and believe both should permeate the organization – formally and informally. “We have a core value of inclusiveness, and that really drives our culture, our strategy and our execution,” Rob says. “For example, if we include employees from across the organization in initiatives or assignments outside of their job description, we find it builds respect across teams and gains us credibility with external partners. It’s a win-win.”

While inclusiveness was a cultural pillar from the launch of the company, the idea for cross-functional interaction was born out of necessity. Gaylon tells the story from a former firm about a flood forcing him into a temporary space. “All of a sudden people were no longer sitting exclusively with their functional team, and morale, productivity and creative problem-solving all improved,” Gaylon says. That lesson lives on at Stakeholder, where they intentionally resist silos and sit in cross-functional teams to drive the culture of inclusiveness.

The “why” is why.

It is clear that culture is in the lexicon of today’s forward-thinking business leaders. But why? Meritage Midstream Director of Business Optimization Cody Pierrou has a simple yet powerful explanation. “When a company is purpose driven, it functions with focus,” he says. He further explains that alignment around a collective purpose defines the culture. As Cody puts it, it boils down to this: “Why does our company matter?”

Simon Sinek, the bestselling author known for creating powerful models for inspirational leadership, says, “Regardless of WHAT we do in our lives, our WHY—our driving purpose, cause or belief—never changes.” That is a compelling proposition for individuals and for organizations. Resilient, enduring companies are the ones that master the ability to adapt and transform to our rapidly evolving world, while at the same time providing stability when it comes to purpose and culture. In other words, strong leaders know that what they do may change, but why they exist is evergreen.

“I am always asking my colleagues to think about why our company matters,” Cody says. “Culture explains the why.”

When it comes to culture, it matters. And the “why” is why.