▪ Founder’s purpose: Organizations are the product of someone’s vision and exist to be or do something. Whatever the founders had in mind and how strongly that vision is communicated and embraced is a forceful determinant of culture. For example, nonprofits conceived for altruistic purposes will have quite a different ethos than those created to generate profit and wealth.
▪ Professional or industry norms: Each profession has its own rules and values – both explicit and implicit. Engineers, for example, value accuracy, precision and empirical data – appropriate for those entrusted to design structures. Conversely, artists engage in more qualitative and aesthetic work. Neither is right or wrong; they are just different. Therefore, their respective organizations will have vastly different cultures. (Ask an architect where and how these two intersect.)
▪ Maturity: Just like any dynamic entity, an organization has a life cycle of various stages. For example, a startup will operate more fluidly and informally than a long-established organization. With maturity often comes greater need for rules and policies that seem unnecessary in a fledgling. As a firm matures, what once worked will not necessarily work at the next stage. So maintaining the same culture will be difficult as the organization must adapt to changing demands.
▪ Ownership: Power is determined largely by who owns and governs an organization. Various models – partnership, co-operative, employee-owned, private, or public corporation – determine who makes decisions and who gains (or loses) financially. In general, broader bases of ownership bring more complex governance, which certainly affects culture.
▪ Financial performance: The track record of successes and setbacks, and how leaders respond, also shapes culture. If a firm perpetually fights to survive, its culture is likely to be reactionary and chaotic. However, if an organization always performs well financially, the culture will reflect confidence that can ultimately grow into arrogance. Complacency can then set it in, ironically undermining its competitive edge. Or if an organization lurches between boom and bust, the culture will likewise mirror that volatility.
Culture can enable your success or derail it. To win as a leader, take time to reflect, understand and communicate about your culture.
Next month: The role of employees in creating culture.
Linda Clark-Santos, Ph.D., has extensive leadership experience in both the public and private sectors. firstname.lastname@example.org.