On the Evolution of Work Systems in the Digital Economy
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 employees’ happiness 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 – their recent decision to offer unlimited family leave gives employees the autonomy to decide what’s right for them.
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 famous for its fun and nurturing culture, as well as its stellar customer service. As their CEO once famously said, “Zappos is a customer service company that just happens to sell shoes.” And the way they keep employees satisfied with their job is by not only letting them express themselves with whacky desk decor (which everyone loves), but by giving employees the autonomy to help customers the way they see fit, rather than following strict guidelines and scripts. 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 making 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.
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 it’s not resisted by management. 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, it 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, because employees often don’t know what to expect next.
Mergers, acquisitions or sudden changes in the market can all contribute to a progressive culture. Uncertainty is the definitive trait of a progressive culture, because employees often don’t know what to expect next (see almost every newspaper or magazine ever). “Customers” are often separate from the company’s audience, because these companies usually have investors or advertisers to answer to.
But it’s not all doom and gloom. A major transition can also be a great chance to get clear on the company’s shifted goals or mission and answer employees’ most pressing questions. Managing expectations and addressing rumors that pop up through constant communication are the best things a company can do to prevent employees from fleeing or cowering. Change can be scary, but it can also be good, and smart employees know this. They embrace change and see it as an opportunity to make improvements and try out new ideas. And hopefully, they rally their colleagues to get on board.
LinkedIn’s $1.5 billion acquisition of Lynda.com is one recent example of companies in transition. Ultimately, it’s a match that makes sense—the companies’ goals are in alignment with one another, and LinkedIn’s users benefit from the partnership. LinkedIn still has a lot to prove to its stockholders (their shares fell after the company attributed its annual revenue forecast to the acquisition), and it recently reorganized its sales team and changed its advertising methods. But by being straightforward and showing how these changes will ultimately lead to greater benefits, both LinkedIn and Lynda.com can thrive.
Possible pitfalls: Progressive culture can instill fear in employees for obvious reasons. Any change in management or ownership—even if it’s a good thing for the company—isn’t always seen as a good thing. 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.
Check out our 37 Company Culture Quotes for some more inspiration for your organization.