Six Components of a Great
by John Coleman
MAY 06, 2013
The benefits of a strong corporate culture are both intuitive and supported by social science.
According to James L. Heskett, culture “can account for 20-30% of the differential in
corporate performance when compared with ‘culturally unremarkable’ competitors.” And
HBR writers have offered advice on navigating different geographic cultures, selecting jobs
based on culture, changing cultures, and offering feedback across cultures, among other
But what makes a culture? Each culture is unique and myriad factors go into creating one, but
I’ve observed at least six common components of great cultures. Isolating those elements can
be the first step to building a differentiated culture and a lasting organization.
1. Vision: A great culture starts with a vision or mission statement. These simple turns of
phrase guide a company’s values and provide it with purpose. That purpose, in turn, orients
every decision employees make. When they are deeply authentic and prominently displayed,
good vision statements can even help orient customers, suppliers, and other stakeholders.
Nonprofits often excel at having compelling, simple vision statements. The Alzheimer’s
Association, for example, is dedicated to “a world without Alzheimer’s.” And Oxfam
envisions “a just world without poverty.” A vision statement is a simple but foundational
element of culture.
2. Values: A company’s values are the core of its culture. While a vision articulates a
company’s purpose, values offer a set of guidelines on the behaviors and mindsets needed to
achieve that vision. McKinsey & Company, for example, has a clearly articulated set of values
that are prominently communicated to all employees and involve the way that firm vows to
serve clients, treat colleagues, and uphold professional standards. Google’s values might be
best articulated by their famous phrase, “Don’t be evil.” But they are also enshrined in their
“ten things we know to be true.” And while many companies find their values revolve around
a few simple topics (employees, clients, professionalism, etc.), the originality of those values
is less important than their authenticity.
3. Practices: Of course, values are of little importance unless they are enshrined in a
company’s practices. If an organization professes, “people are our greatest asset,” it should
also be ready to invest in people in visible ways. Wegman’s, for example, heralds values like
“caring” and “respect,” promising prospects “a job [they’ll] love.” And it follows through in
its company practices, ranked by Fortune as the fifth best company to work for. Similarly, if
an organization values “flat” hierarchy, it must encourage more junior team members to
dissent in discussions without fear or negative repercussions. And whatever an organization’s
values, they must be reinforced in review criteria and promotion policies, and baked into the
operating principles of daily life in the firm.
4. People: No company can build a coherent culture without people who either share its core
values or possess the willingness and ability to embrace those values. That’s why the greatest
firms in the world also have some of the most stringent recruiting policies. According to
Charles Ellis, as noted in a recent review of his book What it Takes: Seven Secrets of Success
from the World’s Greatest Professional Firms, the best firms are “fanatical about recruiting
new employees who are not just the most talented but also the best suited to a particular
corporate culture.” Ellis highlights that those firms often have 8-20 people interview each
candidate. And as an added benefit, Steven Hunt notes at Monster.com that one study found
applicants who were a cultural fit would accept a 7% lower salary, and departments with
cultural alignment had 30% less turnover. People stick with cultures they like, and bringing
on the right “culture carriers” reinforces the culture an organization already has.
5. Narrative: Marshall Ganz was once a key part of Caesar Chavez’s United Farm Workers
movement and helped structure the organizing platform for Barack Obama’s 2008
presidential campaign. Now a professor at Harvard, one of Ganz’s core areas of research and
teaching is the power of narrative. Any organization has a unique history — a unique story.
And the ability to unearth that history and craft it into a narrative is a core element of culture
creation. The elements of that narrative can be formal — like Coca-Cola, which dedicated an
enormous resource to celebrating its heritage and even has a World of Coke museum in
Atlanta — or informal, like those stories about how Steve Jobs’ early fascination with
calligraphy shaped the aesthetically oriented culture at Apple. But they are more powerful
when identified, shaped, and retold as a part of a firm’s ongoing culture.
6. Place: Why does Pixar have a huge open atrium engineering an environment where firm
members run into each other throughout the day and interact in informal, unplanned ways?
Why does Mayor Michael Bloomberg prefer his staff sit in a “bullpen” environment, rather
than one of separate offices with soundproof doors? And why do tech firms cluster in Silicon
Valley and financial firms cluster in London and New York? There are obviously numerous
answers to each of these questions, but one clear answer is that place shapes culture. Open
architecture is more conducive to certain office behaviors, like collaboration. Certain cities
and countries have local cultures that may reinforce or contradict the culture a firm is trying
to create. Place — whether geography, architecture, or aesthetic design — impacts the values
and behaviors of people in a workplace.
There are other factors that influence culture. But these six components can provide a firm
foundation for shaping a new organization’s culture. And identifying and understanding
them more fully in an existing organization can be the first step to revitalizing or reshaping
culture in a company looking for change.
John Coleman is a coauthor of the book, Passion & Purpose: Stories from the Best and Brightest Young
Business Leaders. Follow him on Twitter at @johnwcoleman.
This article is about ORGANIZATIONAL CULTURE
FOLLOW THIS TOPIC
Leave a Comment
2 days ago
In a recent dissertation I wrote on learning in a transient alliance in a post-earthquake context I found that
organizational culture trickles down from the highest levels of the organization through leaders that embrace
its culture. So leadership alignment with the culture and values is key. Good communication, or narration, as
John Coleman nicely explains, is needed at all levels of the organization to promote the core values.
JOIN THE CONVERSATION
We hope the conversations that take place on HBR.org will be energetic, constructive, and thought-provoking. To comment, readers must sign
in or register. And to ensure the quality of the discussion, our moderating team will review all comments and may edit them for clarity, length,
and relevance. Comments that are overly promotional, mean-spirited, or off-topic may be deleted per the moderators' judgment. All postings
become the property of Harvard Business Publishing.
Purchase answer to see full