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Culture is the water the organization swims in. Culture is the unseen force in the organization that causes, shapes, and upholds behavior.

Culture is a set of rules that we follow, often without knowing it. Culture defines a group's identity, and, like personality in an individual, is often an unconscious component that impacts the entirety of how the group functions - every team, department, and product/service.

Culture, though amorphous and difficult to make legible, defines the day-to-day experience of working at an organization.

Culture gives us shared language and rules for how to behave in the social order within an organization.

We're rewarded by the culture when we behave by its rules. As we notice behavior modeled by others, and observe how that behavior is rewarded or punished, we have the option to fit into the social order or be rejected by it.

Great organizational culture helps teams avoid inertia. A great organizational culture is the only way to avoid backsliding behavior over time. We need to build great systems and hire great people, but if we can't create healthy cultures for people to operate within, we won't have excellence.

If the culture is high-functioning and supports the goals of the organization, it gives an organization a strategic advantage by improving trust and cooperation, better and more efficient decision-making, and through the control it exerts over people's actions.

Great company culture wins over groups of A-players. You need great team members, but having a productive context in which those A-players work is critical.

One way to think about culture is to drive a wedge between the explicit articulation of the organization and the actual experience of working within that organization. We can think of two types of "organizations" one experiences at work. The formal, explicit organization is visible in the org chart and the official hierarchy. The informal organization is below the surface, and actually explains how work gets done.

The formal or "apparent" organization is described as:

The informal organization is described as:

Why don't people follow the process? Why did that salesperson say that? Why is this team not executing handoffs? Understanding the informal organization at work gives you clues as to why certain behaviors occur, and gives you a chance of creating change that works.

The gap between the described formal organization and the actual experience of employees within the informal organization determines the strength or integration of that culture. A well-integrated culture is one in which the gap is small.

Cultures with large gaps between formal and informal cultures are often described as differentiated or fragmented. A differentiated culture is one in which subcultures disagree about appropriate behavior. A fragmented culture is one where many subcultures rule and there is no single set of shared assumptions across the organization.

Culture is a broad, expansive topic, with many interacting elements. Edgar H. Schein and Peter A. Schein break down the elements of culture in their book Organizational Culture and Leadership, which I'll paraphrase here:

I'll lay out three different models of understanding organizational cultures.

The Organizational Culture Assessment Instrument (OCAI), developed by Kim Cameron and Robert Quinn at the University of Michigan seems to be the most commonly used breakdown of organizational cultures.

The best way to understand the choices that go into creating these four types are cultures is on two axes: Egalitarian vs. Authoritarian Structures and Internal (organization) vs. External (market) focus.

A "Create" culture, or Adhocracy culture, is innovative, creative, displays autonomy, and has challenging and difficult work. These cultures have a high degree of informality and flexibility.

Startup tech companies are generally Adhocratic in nature, as the ability to innovate, collaborate, and solve difficult problems is the big challenge. Consulting agencies and research labs are often also Adhocracies.

A key feature of Adhocracy cultures is the use of flexible teams that come together for projects and to solve problems.

One study found that the culture that employees feel the most engaged in Adhocracy cultures.

The Collaborate, or Clan culture, is collaborative, flexible, and can be described as "family-oriented." While the Adhocracy culture is focused externally on solving hard problems, the Collaborate culture is focused internally, usually on employee development, or employee satisfaction.

With a more egalitarian structure, "Upper management commonly assumes the role of mentors and coaches. Loyalty and group work are important here. Employee collaboration is a key process and long-term employee development is practiced." (Source: Compensation and Culture)

These organizations tend to be focused on social structure and interpersonal relations and place emphasis on collaboration and community.

The Collaborate culture is most similar to the People or Incubator culture from other research.

Control, or Hierarchy cultures are bureaucratic, with lots of rules and procedures that must be followed. They are stable, predictable businesses with a clear division of labor and lines of accountability.

Management rules over the organization and is focused internally on monitoring, organizing, and enforcing the structure of the machine. Management prescribes rules and procedures and the rest of the staff executes them.

These cultures are rigid and slow to change, as change is disruptive to the continued functioning of the machine.

The Control Culture is most similar to the "Role" and "Eiffel Tower" cultures from other culture research.

Compete, or Market cultures, are focused on beating competitors and winning in their market. Because of that, they tend to have short-term goals, usually financial in nature, and are focused on market share or profitability.

Compete cultures are aggressive, are usually driven by centralized decision-making processes, rely on strict rules, and tend to reward individual achievement and superstars.

That competitive atmosphere is focused externally but can also be seen internally between staff within the organization.

Another breakdown of cultures comes from the book Reinventing Organizations. Author Frederic Laloux also categorizes five different types of cultures - Red, Amber, Orange, Green, and Teal.

Red Organizations are most similar to street gangs and mafias. Because they're so rare in the business world, I'll address only the Amber, Orange, Green, and Teal cultures.

Amber Organizations are typified by central control and can plan for the medium and long term. The Catholic Church is one of the defining organizations of Amber. They're able to develop strong processes and uphold them over time.

Amber Organizations are "Theory X," thinking and operating like armies, with rigid hierarchy and chain of command.

Orange Organizations are results-focused, rather than moralistic and rigid. They use cross-functional teams to tackle big projects and drive innovation.

These organizations use objectives to enforce accountability for results and promote expertise and specialization in their staff.

Still, these organizations are viewed as machines by their leaders and are often led in a top-down fashion. This is the cultural stage that most organizations operate from today.

This type is most like the "Stage 3 Organization" from Tribal Leadership.

Green Organizations empower their people, are values-driven, and usually have an inspiring purpose. The power structure is often removed by having the leadership at the top give away power to front-line workers.

The mandate for management is:

Examples of Green Organizations are Ben & Jerry's, Southwest Airlines, The Container Store.

This type looks most like "Stage 4" cultures.

Teal Organizations have shifted from ego-driven growth and external yardsticks of success to places where people bring their whole selves to work, work without needless hierarchy or consensus, and where the organization has a life of sense of direction of its own.

Self-Management is a key concept of Teal Organizations. People are gathered in teams, and trained on decision-making skills, listening, communication styles, how to run meetings, and how to coach one another. Instead of leaning on hierarchy, teams get outside facilitators to help.

Teal Organizations trade efficiency and scale for commitment and motivation from their people.

Examples of Teal Organizations are Morning Star, Patagonia, AES, Buurtzorg

From the book Tribal Leadership, cultures have five distinct stages, with Stages Two through Five representing the most common and critical to understand.

Stage 2 cultures look most like the workplaces seen in The Office or at your local DMV. Stage Two employees are allergic to talking about values and seem resigned to cynicism.

Stage Three cultures are organizations where individual superstars rule and the culture is internally competitive and political. People hoard information and gain favor through relationships.

These cultures exhibit internal competition and a "warlord model," which prioritizes entrepreneurialism, decentralized decision-making, and high autonomy for superstars. These cultures can be successful, but only under certain conditions, and always at a high cost:

Stage 3 cultures have a distinctly "performance" focus, which over time blunts learning, and innovation, and is costly for individuals and teams.

Stage four cultures are purpose-oriented and values-aligned. They're focused on competing in the market, not with one another internally.

Many of these organizations talk extensively about external competition. External enemies give their teams a shared purpose. Steve Jobs did this well at Apple.

Stage Five Cultures are rare organizations that have remarkable, "play" oriented cultures where there is no discussion of competition, either internal or external. They're focused on maximizing the potential of the organization and of its people.

Cultures form from the beliefs, values, and assumptions of the early founders of the organization. The culture evolves through shared collective experiences, and through any new beliefs, values, and assumptions of new team members that are added (Source: Organizational Culture and Leadership).

Ultimately, founders have the biggest impact on cultural formation in the early stages of a new organization.

New companies can define their culture deliberately. When they're just getting started, founders can combine very clear intentions for the culture with a sensing and probing approach to shaping the result. As they simultaneously shape the culture and gain an understanding of what they've created, they seek to articulate what they see.

Placing an early emphasis on improving culture is important. If you wait, you end up with a certain type of culture you may or may not like. An unintentional culture will often limit your growth, as downstream problems are a result of upstream cultural issues. Not focusing on culture early on is a regret of many CEOs.

In more mature organizations, culture ceases to be a single thing, and exists in different forms across departments. Subcultures develop naturally as departments (or divisions) are built out.

Subcultures are part of the normal evolution of an organization. One of the key challenges for Leadership Teams is getting different subcultures to work together effectively, under the umbrella of the larger culture and organization.

Two examples of archetypical Subcultures are those that develop in Engineering departments and those you see with the Leadership Team. Engineers bias toward treating problems like puzzles to be solved, and likely view the lens and their projects from a machine view. Leadership Teams may bias toward vertical forms of hierarchy and may have a financial bent.

Cultures strengthen as time goes on, and mature companies with strong cultures can benefit from this strength or can be held back by it. Strong cultures are lauded for stabilizing the organization and giving structure to the people within it.

"Strong" cultures aren't necessarily good cultures. Organizational cultures function like immune systems as they grow. They allow in certain types of people and behaviors and kick out types that don't fit. This is a gift and a curse, as it serves to strengthen the culture and the togetherness, but it also makes change exceedingly hard.

Surveys may say that people want "fewer meetings," and "leaders who are trustworthy," but I believe that at the core of what people want from work culture is the ability to grow.

I believe that we both grow and perform well when we work in cultures that promote Autonomy, Competence, and Connection. Those three areas are the foundation of Self-Determination Theory, our best psychological theory on human motivation.

A study by A. Louis Babu, Dr. A. Chandra Mohan, Dr. S.K. Manivannan, found that the cultures employees preferred the most were "Adhocratic" - those that exhibited Autonomy, Innovation, Creativity, and Variety/Challenging/Stimulating work.

According to Self-Determination Theory, we need to feel that we're in control of our behaviors and our goals at work (Source: link) to be motivated. If we don't feel we have some control over outcomes, we won't have sufficient motivation to act.

Autonomy means that we can think independently, take responsibility for our decisions and the outcomes and that we are free to make mistakes and grow from them.

We crave mastery. We want to develop and display competence in our jobs, and we want to see the same from the people around us. When we're allowed to upskill, pushed to stretch ourselves, grow new abilities and add new skills, we feel fulfilled at work.

Without connection with others, we feel isolated. Even the most introverted among us want to work with others to accomplish great things. Assuming we can control our behaviors, set our own goals and display mastery, we want to do it in a community, with others.

Work relationships make up a significant part of our lives. Traditional communities like churches and neighborhoods play a smaller role in our modern lives than ever before, and I believe that people are increasingly looking for work to fill those gaps.

Community starts with having a shared purpose, mission, vision(s), strategy, and goals and testing them against difficult times.

Eric Beinhocker surveyed the academic literature to identify 10 attributes that are associated with the best companies. They are:

There is no perfect culture and no right combination of cultural traits. The right kind of culture depends on the type of business you're in and the demands of the market you're competing in. The wrong approach to culture is to try to be somebody you're not.

You can't understand an organization's culture by observing people's behavior or digging through their documents. A trail of behavioral artifacts and documentation gives hints about the culture at work but does not explain culture. Understanding culture is seeing the behavior and understanding the beliefs and assumptions behind the behavior. The best way to understand a culture is to be a "cultural anthropologist."

Observe the behavior of people in the organization. Seek out cultural artifacts and processes that seem to be at work. Cultural artifacts are things in the physical environment, the language people use, the products and tech at work, the way people dress and use or stifle emotions in meetings. It's also the published messages about Core Values, the rituals, and ceremonies that management uses. Dig deep into the artifacts that interest or confuse you.

Ask people why they're doing things the way they're doing things. Ask probing questions about the values and beliefs behind their actions. What do people say is important? Ask how else those beliefs are implemented within the organization.

Is there a mismatch between what people say is important and what's actually happening? Look for inconsistencies. Find the culture or subculture's shared assumptions that actually determine how the work is done and how people behave. This gives you clues as to what's actually valued by the organization, and the strengths or weaknesses of the expressed culture.

Having a qualitative feel for the culture is one thing. To gather quantitative data and to be able to "measure" culture, you have to use surveys. Though surveys won't tell you what the culture is all about, quantitative data will inform you about how the culture is functioning, and whether a culture is improving or not over time.

There are several forms of surveys you can use to gather quantitative data. The most common forms of surveys companies use to test their culture are Employee Engagement Surveys, Culture Surveys, and Employee Satisfaction Surveys.

Employee Engagement is a measure of an individual person's commitment to the organization and its Mission, Vision, and Goals. Put another way, Engagement is:

When executed well, an Engagement survey can be a diagnostic tool to understand whether cultural efforts are working or not. Engagement can also be a "report card" for a culture, as it can draw out successes and failures and areas to change.

Engagement is always results-focused rather than "happiness"-focused.

Employee Satisfaction is a measure of an employee's happiness or contentment with their job. Happiness, Satisfaction, and contentment often come down to things like job security, financial stability, compensation, benefits, recognition, and the ability to use an individual's skills and abilities at work (Source: link). These are important categories, but they generally have less to do with high performance or intrinsic motivation at work.

Satisfaction comes down to an employee's expectations versus the reality of their individual experience.

People who are happy can be unmotivated and unsuccessful. People are who motivated and successful are more likely to be happy. If you focus on Engagement, you'll increase Satisfaction. If you focus on Satisfaction, you may not get Engagement.

Catering to "happiness" often results in organizations adding benefits, perks, work/life balance, and bonus programs, instead of focusing on what drives true cultural aims. These efforts can increase morale, often temporarily, but they touch just a portion of what makes a productive culture.

Engagement and Satisfaction measure different things, and companies use both kinds of surveys regularly. Engagement is more modern and is thought to be more holistic than Satisfaction, and therefore a better indicator of cultural health.

Many organizations use annual Engagement surveys, and the Engagement survey vendor space is well-developed. Use surveys where you can customize questions to address cultural elements, not just information on whether employees are "engaged."

Cultural questions focus less on individual employees and more on your Vision, Mission, Core Values, and beliefs about teamwork, conflict management, leadership style, and your Leadership Team and Management Team's effectiveness.

Don't settle for out-of-box, generic Engagement questions. While a benchmarking Engagement survey should hold most questions constant, customization allows you to pinpoint issues and address them to intervene in the culture.

"Pulse" surveys are frequent 1-15 question surveys that run monthly, weekly, or even daily, to supplement a full Engagement survey. Their purpose is to track the drivers of Engagement, rather than to measure or benchmark it. Pulse Surveys responses can be thought of as the KPIs for Engagement.

Tools like Lattice or 15Five allow you to survey employees on a regular basis, in the flow of daily work. I think that a special culture is required to get away with this frequency. One issue I've seen is getting enough employees to actually complete these surveys - if you don't get completed surveys, you don't have good data.

Amazon's "Connections" program, a daily employee survey that is focused on Satisfaction, has run into issues outlined here.

Any survey only captures sentiment at a moment in time, so if you're surveying employees once per year, you're missing out on a lot of data points. Many HR pros find that Engagement can change frequently, and are moving to a higher frequency of surveying.

There are three ways to administer Employee Engagement surveys. The best value for most organizations is Engagement Vendor Surveys.

Google has its own custom survey:

Here are some example Engagement Questions from CultureAmp, that follow Maslow's Hierarchy of Needs.

Whatever you do, the worst sin of surveying employees is not acting on the feedback you gather. Don't ask questions that are merely "interesting," that you don't understand fully, or that you wouldn't be willing to act on the results from. "Survey fatigue" is what happens when people fill out constant surveys but see no meaningful changes over time. Always recap what you learned from the latest survey, and what you're going to do about it.

Surveying without clarity of purpose, and without follow-up action can also put employees in a place where they stop taking responsibility for their cultural contribution and expect management to "fix things."

Constant surveys: