5 Types of Corporate Culture: Which One Is Your Company?
Culture affects every aspect of your company, from the public’s perception of your brand to your employees’ job satisfaction to your bottom line. Because there’s so much at stake, it’s important that your corporate culture is adaptable and open to improvement – which starts with being able to articulate just what kind of culture your company has.
While no two cultures are exactly alike (the nuances are too great!), there are defining characteristics that tend to place organizational cultures into one of five categories, or types, which we’ve outlined below. Often, the industry of a company will dictate its culture to some degree, but that doesn’t mean your culture can’t be changed. Thankfully, culture is not static, but rather evolving.
So which of these five corporate culture types sums up your company best? Or do you have some elements of each? While no one culture is the best or worst of the bunch – each has its pros and cons – there’s something to learn from companies that fall under any of these categories.
1. Team-first Corporate Culture
aka “the comrade”
Team-oriented companies hire for culture fit first, skills and experience second.
A company with a team-first corporate culture makes employee engagement its top priority. Frequent team outings, opportunities to provide meaningful feedback, and flexibility to accommodate employees’ family lives are common markers of a team-first culture. Netflix is a great example – they offer unlimited family leave and vacation days. Employees get the autonomy to decide what’s right for them and in return they’re expected to be committed to the company.
Team-oriented companies hire for culture fit first, skills and experience second. Why? Because they know happy employees make for happier customers. It’s a great culture for any customer service-focused company to embody, because employees are more likely to be satisfied with their work and eager to show their gratitude by going the extra mile for customers.
Zappos is known for its fun culture as is clear in this parody starring CEO Tony Hsieh
Zappos is famous for its fun and nurturing culture, as well as its stellar customer service. As CEO Tony Hsieh once famously said, “Zappos is a customer service company that just happens to sell shoes.” And employees are satisfied with their job not only because they can express themselves with whacky desk decor (which everyone loves), but because they have the autonomy to help customers the way they see fit, rather than following strict guidelines and scripts. In the end, customers appreciate the straightforward, personable service.
Possible pitfalls: The larger the company, the more difficult it is to maintain this type of culture. That’s why having a team member dedicated to cultivating culture is a great strategy for any company.
You may have a team-first culture if:
- Employees are friends with people in other departments
- Your team regularly socializes outside of work
- You receive thoughtful feedback from employees in surveys
- People take pride in their workstations
2. Elite Corporate Culture
aka “the athlete”
Companies with elite cultures are often out to change the world by untested means.
An elite corporate culture hires only the best because it’s always pushing the envelope and needs employees to not merely keep up, but lead the way (think Google). Innovative and sometimes daring, companies with an elite culture hire confident, capable, competitive candidates. The result? Fast growth and big splashes in the market.
Companies with elite cultures are often out to change the world by untested means. Their customers are often other businesses that need their products to remain relevant and capable in a new environment—one often of the elite-cultured company’s creation. (That’s how trailblazing we’re talking.)
SpaceX is a high-profile example of an innovative (and relatively young) company doing big things in aerospace manufacturing and space transport. Employees report feeling elated to literally launch rockets, but expectations are extremely high and 60 to 70-hour work weeks are the norm. Still, knowing that they’re doing meaningful, history-making work keeps most employees motivated.
Possible pitfalls: Such intensity can lead to competition between employees and people feeling pressure to always be on. Perks like team outings, peer recognition programs and health initiatives can combat this.
You may have an elite culture if:
- Employees aren’t afraid to question things that could be improved
- Employees make work their top priority, often working long hours
- Your top talent moves up the ranks quickly
- You have many highly qualified job applicants to choose from
3. Horizontal Corporate Culture
aka “the free spirit”
Titles don’t mean much in horizontal cultures.
Horizontal corporate culture is common among startups because it makes for a collaborative, everyone-pitch-in mindset. These typically younger companies have a product or service they’re striving to provide, yet are more flexible and able to change based on market research or customer feedback. Though a smaller team size might limit their customer service capabilities, they do whatever they can to keep the customer happy—their success depends on it.
In a horizontal company culture executives work side by side with even junior staff.
Titles don’t mean much in horizontal cultures, where communication between the CEO and office assistant typically happens through conversations across their desks to one another rather than email or memos. This is the experimental phase, where risks are necessary and every hire must count.
Basecamp is the perfect example of a successful company that maintains a startup-like mindset. Originally founded as 37Signals, Basecamp announced last year that it would focus exclusively on its most popular product and maintain its relative small size rather than grow into something much bigger and broader.
Possible pitfalls: Horizontal cultures can suffer from a lack of direction and accountability. Try to encourage collaboration while still maintaining clearly defined goals and a knowledge of who’s primarily responsible for what. Horizontal structure shouldn’t mean no structure.
You may have a horizontal culture if:
- Teammates discuss new product ideas in the break room
- Everybody does a little bit of everything
- The CEO makes his or her own coffee
- You still have to prove your product’s worth to critics
4. Conventional Corporate Culture
aka “the traditionalist”
Traditional companies have clearly defined hierarchies and are still grappling with the learning curve for communicating through new mediums.
Companies where a tie and/or slacks are expected are, most likely, of the conventional sort. In fact, any dress code at all is indicative of a more traditional culture, as are a numbers-focused approach and risk-averse decision making. Your local bank or car dealership likely embodies these traits. The customer, while crucial, is not necessarily always right—the bottom line takes precedence.
But in recent years, these companies have seen a major shift in how they operate. That’s a direct result of the digital age, which has brought about new forms of communication through social media and software as a service (SaaS). Today, traditional companies still have clearly defined hierarchies, yet many are grappling with the learning curve for communicating through new mediums that can blur those lines. Facing this challenge can be a big opportunity for learning and growth, as long as management doesn’t resist it. While new office technology is often low on management’s list of concerns, more traditional companies are starting to experiment with it as more millennials enter higher-up positions.
Founded in 1892, GE is about as traditional as they come and is well-known for its cut-and-dry management practices. Just recently, however, the company eliminated its traditional performance review in favor of more frequent conversations between management and employees and is even launching an app to help facilitate feedback. It’s the perfect example of an old-school company embracing technology and change.
Possible pitfalls: This very cut-and-dry approach leaves little room for inspiration or experimentation, which can result in a lack of passion or resentment from employees for being micromanaged. Getting employees to understand the company’s larger mission—and putting more trust in employees to work toward it—can combat that.
You may have a conventional culture if:
- There are strict guidelines for most departments and roles
- People in different departments generally don’t interact
- Major decisions are left up to the CEO
- Your company corners the market
5. Progressive Corporate Culture
aka “the nomad”
Uncertainty is the definitive trait of a transitional culture.
Mergers, acquisitions or sudden changes in the market can all contribute to a progressive culture. In these situations, companies often have investors or advertisers to answer to as well as employees. Because employees often don’t know what to expect next, uncertainty is the definitive trait of a progressive culture.
But it’s not all doom and gloom. You can treat a major transition as a chance to clarify the company’s new goals or mission and answer employees’ most pressing questions. Managing expectations and addressing rumors through constant communication is the best thing a company can do to prevent employees from fleeing. Change can be scary, but it can also be good, and smart employees know this. They’ll embrace change as an opportunity to make improvements and try out new ideas. And hopefully, they rally their colleagues to get on board.
LinkedIn, which acquired Lydia.com and then was acquired by Microsoft, knows a thing or to about transitional culture.
Amazon’s $13.7 billion acquisition of Whole Foods is one fairly recent example of companies in transition. Ultimately, while Wall Street saw the move as a dream come true, the clash between Amazon’s data-driven culture and Whole Food’s culture of empowerment created a bit of a nightmare. In contrast, Disney’s acquisitions of companies like Pixar and Marvel earned the company both a greater share of the box office and praise for successful change management. The difference? Disney took the time to identify what benefits mattered most to their new employees, promised to keep those benefits and then kept the promise.
Possible pitfalls: Progressive culture can instill fear in employees. Any change in management or ownership—even if it’s a good thing for the company—isn’t always seen as good. Communication is crucial in easing these fears. It’s also a good opportunity to hear feedback and concerns from employees and keep top talent engaged.
You may have a progressive culture if:
- Employees talk openly about the competition and possible buyouts
- Your company has a high turnover rate
- Most of your funds come from advertisers, grants or donations
- Changes in the market are impacting your revenue
So which type of corporate culture does your company identify with most? Or does it have characteristics from a couple different types? Either way, taking the elements of each that work best for your company are a good bet, and if something doesn’t align with your company’s goals, leave it. Your culture isn’t merely passive, and with effort, it can be modified to suit your team.