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What Is Company Culture?

Culture Is The Water We Swim In

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

"Culture is to a group what personality or character is to an individual. We can see the behavior that results, but we often cannot see the forces underneath that cause certain kinds of behavior." - Edgar H. Schein (Source: Organizational Culture and Leadership)

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.

"If it means anything, culture should describe the day-to-day experience of the ordinary worker. Culture is what makes the experience of working at one company different from doing the same work at another company offering similar services or products." - Peter Scholtes (Source: The Leader's Handbook)

Culture Is The Foundation of Social Order

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

"The 'rules' of the social order make it possible to predict social behavior, get along with each other, and find meaning in what we do. Culture supplies us our language, and language provides meaning in our day-to-day life." - Edgar H. Schein (Source: Organizational Culture and Leadership)

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.

Culture Is The Leading Indicator of Organizational Health

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.

"Defaulting to a system as the solution for tight lug nuts is dangerously shallow and usually produces debilitating 2nd-order consequences (red tape and bureaucracy). Systems are wonderful for creating consistency but rarely result in excellence…Keeping problems fixed is all about the culture." - Keith J. Cunningham (Source: The Road Less Stupid)

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.

"Ron Johnson, Jeff Smisek, Juergen Schrempp, Marissa Mayer, and Richard Thoman aren’t outliers, they’re just some of the more familiar examples of a phenomenon that is all too common. None of them 'lost their touch' or were exposed as frauds – they only changed settings. It bears repeating: skills are more specific and more difficult to transfer than many of us would like to believe. You can’t divorce performance outcomes from context, because the context is the thing you’re actually good at." (Source: The Myth of A-Players)

Your Organization Is Two Organizations

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 Organization

The formal or "apparent" organization is described as:

"The visible, formal, obvious, and officially reported version of the organization. It consists of the products, services, customer segments, and markets; the hierarchical structure and chain of command; the official roles, functions, job descriptions, and accountabilities; the facilities, equipment, machinery, materials, and supplies; the official systems, processes, and methods of work; the official policies, goals, plans, objectives, and standards." - Peter Scholtes (Source: The Leader's Handbook)

The Informal Organization

The informal organization is described as:

"Shaped by the styles and values of its founder and leaders, and by its history - the residual impacts of past victories and setbacks, old feuds and rivalries. The informal organization has its own communication channels, its grapevine; it consists of unofficial networks and cliques. The informal organization often determines how well-included and respected an employee feels." - Peter Scholtes (Source: The Leader's Handbook)

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.

"If we understand the dynamics of culture, we will be less likely to be puzzled, irritated, and anxious when we encounter the unfamiliar and seemingly irrational behavior of people in organizations, and we will have a deeper understanding not only of why various groups of people or organizations can be so different but also why it is so hard to change them." - Edgar H. Schein (Source: Organizational Culture and Leadership)

The Gap Between Formal & Informal

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.

"There’s the glossy, official, Comms Department-approved culture — and then there’s the real, lived experience of showing up every day and working at a place. If the difference between those two versions is large enough, the result is generally serious, sustained, employee-management resentment. Let’s call that 'culture gap.'" - Charlie Warzel (Source: Executives Don't Decide if the Company Culture Is Good. Employees Do.)

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.

The Elements of Culture

Types of Organizational Cultures

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

Create, Collaborate, Control, Compete

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.

Create Culture (Adhocracy)

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.

"Adhocracy emerges in companies facing dynamic environments. Employees in this culture commonly are risk takers and the leadership style is entrepreneurial." (Source: Compensation and Culture)

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

"The company consists of a series of working teams, with variable membership. Coordination within teams is conducted by direct mutual communication, which is also why this organizational model cannot be implemented in larger companies" - Nebojša Janićijević (Source: The Mutual Impact of Organizational Culture and Structure)

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

"We find that the Adhocracy culture type is the one where the employees feel the best in terms of engagement towards the organization. Hence the management and HR can focus on enhancing the Innovativeness, encouraging creativity among employees, enabling more autonomy for taking decisions that affect their day to day work, increase variety in work, and make work challenging and stimulating for the employees" (Source: Impact of Work Culture on Employee Engagement)

Collaborate Culture (Clan)

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 Culture (Hierarchy)

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.

"The organization is represented by the metaphor of a machine. This metaphor suggests a high level of formalization and standardization, since the organization, like a machine, must accomplish its purpose in a precise and prescribed way." - Nebojša Janićijević (Source: The Mutual Impact of Organizational Culture and Structure)

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 Culture (Market)

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

"Our companies were all Marine Corps, not much Peace Corps. We did not come in peace. Emerging companies like ours fought giant incumbents for their existence every single day. We were paranoid and felt constantly threatened with our survival. You could not escape the combat mentality at our companies. We were in a shit fight all the time." - Frank Slootman, CEO of Snowflake

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

"Commonly employees are rewarded for individual performance. Rather than being collaborative, the relationship between employees is generally tournament-based, promoting competition between employees for the purpose of reaching aggressive financial performance goals (Cameron, et al., 2006)" (Source: Compensation and Culture)

Amber, Orange, Green & Teal

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

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.

"With processes, critical knowledge no longer depends on a particular person; it is embedded in the organization and can be transmitted across generations...They operate on the hidden assumption that there is one right way of doing things and that the world is (or should be) immutable." (Source: Reinventing Organizations)

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

"The underlying worldview is that workers are mostly lazy, dishonest, and in need of direction. They must be supervised and told what is expected of them...A good organization should be run like an army. Within a rigid hierarchy, there must be a clear chain of command, formal processes, and clear-cut rules that stipulate who can do what." (Source: Reinventing Organizations)

Orange Organizations

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

"They drill holes into rigid functional and hierarchical boundaries with project groups, virtual teams, cross-functional initiatives, expert staff functions, and internal consultants, to speed up communication and foster innovation." (Source: Reinventing Organizations)

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

"Rationality is valued above all else; emotions, doubts, and dreams are best kept behind a mask, so that we do not make ourselves vulnerable. Our identity is no longer fused with our rank and title; instead, it is fused with our need to be seen as competent and successful, ready for the next promotion." (Source: Reinventing Organizations)

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

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:

"Leaders should not merely be dispassionate problem solvers (like in Orange); they should be servant leaders, listening to their subordinates, empowering them, motivating them, developing them." (Source: Reinventing Organizations)

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

This type looks most like "Stage 4" cultures.

Teal Organizations

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

Cultural Stages Two Through Five

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

Stage Two (25% of Workplaces)

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.

"People in this cultural stage are passively antagonistic; they cross their arms in judgment yet never really get interested enough to spark any passion. Their laughter is quietly sarcastic and resigned. The Stage Two talk is that they've seen it all before and watched it all fail." (Source: Tribal Leadership)

Stage Three (49% of Workplaces)

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.

"The theme... is 'I'm great.' Or, more fully, 'I'm great, and you're not.' Normally, doctors operate at this level on their best days, as do professors, attorneys, and salespeople. Within the Stage Three culture, knowledge is power, so people hoard it, from client contacts to gossip about the company. People at Stage Three have to win, and for them winning is personal." (Source: Tribal Leadership)

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:

"Warlord firms succeed when management keeps the 'big hitters' happy and productive. The past and the future are not often items high on the agenda. Consequently, over time, the performance of extreme warlord firms often swings through peaks and valleys. Much management energy is expended in modulating the politically charged environment." - David Maister (Source: Strategy And The Fat Smoker)

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

"Everyone is trying to look good, display expertise, minimize and hide any mistakes or weaknesses, and demonstrate what they already know and can do well. In a culture of practice, in contrast, everyone is learning and growing." (Source: An Everyone Culture)

Stage Four (22% of Workplaces)

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.

"Teams are the norm, focused around shared values and a common purpose. Information moves freely throughout the group. People's relationships are built on shared values. They tend to ask, 'what's the next right thing to do?' and to build ad hoc partnerships to accomplish what's important at the moment. Their language focuses on 'we,' not 'me.' (Source: Tribal Leadership)

Stage Five Cultures (2% of Workplaces)

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.

"Your tribes hardly ever refer to the competition, except to note how remarkable their own culture is by comparison, and how far their results outstrip industry norms. The theme of communication is limitless potential, bounded only by imagination and group commitment. People in this culture can find a way to work with almost anyone, provided their commitment to values is at the same intensity as their own." (Source: Tribal Leadership)

How Do Cultures Change And Evolve?

How Cultures Form & Stabilize

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.

"Founders not only choose the basic mission and the environmental context in which the new group will operate, but they choose the group members and thereby shape the kinds of responses that the group will make in its efforts to succeed in its environment and to integrate itself." - Edgar H. Schein (Source: Organizational Culture and Leadership)

Culture In Young Companies

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.

“I compare company building to growing up as a person. When you're a kid, you don't really know who you are yet. As a teenager, you're trying to figure it out and you go through different phases to see what feels right or wrong. And eventually, after all that process of discovery, you start to figure out who you are as an adult." - Jeff Lawson, CEO of Twilio (Source: The CEO Test)

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.

"Many of the retiring CEOs reflect... that cultural change was by far the hardest and yet the most impactful change they had instilled in the business. They frequently wish they had placed more attention on culture earlier." (Source: The CEO Next Door)

Subcultures Develop As Organizations Mature

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 exist among groups or individuals who may have their own rituals and traditions that, although not shared by the rest of the organization, can deepen and underscore the organization's core values." (Source: Understanding and Developing Organizational Culture)

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.

"Building an effective organization is ultimately a matter of meshing the different subcultures by encouraging the evolution of common goals, common language, and common procedures for solving problems." (Source: Organizational Culture and Leadership)

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.

Strong Cultures Constrain

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.

"With group maturity, culture comes to constrain, stabilize, and provide structure and meaning to the group members even to the point of ultimately specifying what kind of leadership will be acceptable in the future." (Source: Organizational Culture and Leadership)

"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.

"If the organization didn't have such an immune system, every alien 'germ' would take root, and the organization wouldn't have enough stability to get anything done or enough continuity to give people the identity they need. But immune systems carry a price tag: even good germs get filtered out or killed off." - William Bridges (Source: Managing Transitions)

Great Organizational Culture

What People Want From Company Culture

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.

"Among the different cultural types we find that the Adhocracy culture type is the one where the employees feel the best in terms of engagement towards the organization. Hence the management and HR can focus on enhancing the Innovativeness, encouraging creativity among employees, enabling more autonomy for taking decisions that affect their day to day work, increase variety in work, and make work challenging and stimulating for the employees" (Source: Impact of Work Culture on Employee Engagement)

Autonomy

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.

"Autonomy is a license issued by a leader for people to use their brain, personality, intellect, and judgment to get things done in the best way they think possible. Issue that license to your team if you want them to go places." - Max Klein (Source: 7 Habits of Bosses People Love)

Competence

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.

"Competence is supported by providing the person with optimal challenges and opportunities (specific goals that are challenging enough, but not overwhelming), encouraging their sense of initiation (try it out!), providing structure to mobilize and organize behavior and providing relevant feedback." (Source: link)

Connection

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.

What Makes A Great Culture?

Objectively Great Cultural Attributes

Context Above All

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.

"No plant can survive in all environments because it will ultimately be outcompeted by another plant that is more effectively adapted to a specific environment. Like a plant, a culture must be willing to make tradeoffs to survive and thrive. There is no such thing as a universally good company culture." - Taylor Pearson (Source: What Is Company Culture & Why Is Culture Important)

Understanding an Organization's Culture

Cultural Anthropology For Qualitative Understanding

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."

"What is going on here?"

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.

"Why are people doing what they're doing?"

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.

"If the beliefs and values that provide meaning and comfort to the group are not congruent with the beliefs and values that correlate with effective performance, we will observe in many organizations espoused values that reflect the desired behavior but are not reflected in observed behavior." - Edgar H. Schein (Source: Organizational Culture and Leadership)

"Do the 'Why's' Explain the 'What's'?"

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.

Employee Engagement For Quantitative Understanding

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.

What Is Employee Engagement?

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:

"A measurement of an employee’s emotional commitment to an organization; it takes into account the amount of discretionary effort an employee expends on behalf of the organization." (Source: Employee Satisfaction vs. Employee Engagement)

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.

"The primary emphasis should be on elements that engage workers and drive results, such as clarity of expectations, the opportunity to do what they do best, development and opinions counting." - Jim Harter (Source: The Right Culture: Not Just About Employee Satisfaction)

What's The Difference Between Engagement & Satisfaction?

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.

"If you need food and you want lobster, but you’re served a hamburger, you’ve fulfilled the need for food, but your satisfaction depends on your ability to align your desire for lobster with the reality of the burger. Employee satisfaction is the fulfillment of expectations related to employment." (Source: What's the Difference Between Employee Satisfaction and Employee Engagement?)

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.

"Measuring workers' contentment or happiness levels, as well as catering to their wants, often fails to achieve the underlying goal of employee engagement: improved business outcomes." (Source: The Right Culture: Not Just About Employee Satisfaction)

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.

"The concept of employee engagement is literally and philosophically a step beyond that of job or employee satisfaction: psychologists seeking a better term than 'job satisfaction' to describe the employer/employee relationship examined additional factors like motivation, interest, enthusiasm, involvement, etc. and arrived at the word 'engagement' as the cumulative term for all of these ideas." (Source: What's the Difference Between Employee Satisfaction and Employee Engagement?)

Using Engagement Surveys

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.

A Good Survey Asks Pointed Questions

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.

"A good engagement survey will consist mostly of more pointed, unambiguous, and deeper questions designed to assess areas that leaders and managers have identified as potential problems that could negatively affect engagement otherwise called "drivers" of engagement...Managers should have a finger on the pulse of the company and their teams and will be able to identify areas of engagement that may need attention or improvement.” - Jack Altman (Source: People Strategy)

Pulse Surveys Can Supplement

"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.

Surveying Throughout the Year

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.

"Your engagement score might change from month to month or even week to week. Every company is different, and we see companies increasingly moving away from annual surveys because of this reason. Typically companies move towards a quarterly or monthly survey when modernizing their engagement metrics." (Source: Think Employee Engagement & Company Culture Are The Same Thing: Think Again!)

Custom Surveys vs. Vendor-Administered Surveys

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:

"Googlegeist instead focuses on the most important outcome variables we have: innovation (maintaining an environment that values and encourages both relentlessly improving existing products and taking enormous, visionary bets), execution (launching high-quality products quickly), and retention (keeping the people we want to keep)." - Laszlo Bock (Source: Work Rules!)

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

Tread Carefully With Regular Surveys

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:

“Do not get people to reflect on their own work and behavior. They do not encourage individual accountability. And they do not surface the kinds of deep and potentially threatening or embarrassing information that can motivate learning and produce real change." - Peter Senge (Source: The Fifth Discipline)

Foundation

PurposeMissionVisionCore ValuesStrategy

Designing The Organization

Understanding CultureCultivating CultureOrganizational DesignOrganizational StructureOperating PrinciplesLeadership TeamsDesigning ManagementEffective Teams

Operating Effectively

Operating RhythmGoalsPlanningInternal CommunicationMeetingsMetricsBusiness ProcessResolving IssuesDeciding & Delegating