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The Four Critical Parts of a Company Culture (and why leaders should care)


4 ancient pillars against a cloudy sky backdrop to represent the long-term value of the Four Critical Parts of a Company Culture
Photo Credit Ian Hutchinson via Unsplash

Company culture is a combination of these 4 things:


  • the reason you’re together [purpose],

  • what you’re doing together [mission],

  • the beliefs you agree will govern your individual and group actions [core values], and

  • the behaviors you define [practices] along with the actions you tolerate.


Why leaders should care (deeply) about company culture


There are many connections between leadership and human physiology. Among them is the leader’s responsibility to understand the way our brains work.


According to a 2022 National Institutes of Health (NIH) study:

A sense of belonging - the subjective feeling of deep connection….is a fundamental human need that predicts numerous mental, physical, social, economic, and behavioral outcomes.

Belonging: A Review of Conceptual Issues, an Integrative Framework, and Directions for Future Research (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8095671/)


Every qualified leader needs staff who are:


  • engaged (mental);

  • show up for work (physical);

  • have healthy relationships with co-workers, managers, leaders, customers, and partners (social); and

  • produce (behavioral) bottom-line value (outcomes).


If these benefits are core to success in the role, why do so many leaders resist their responsibilities in culture?


There can be many reasons. Among them are:


  • Time pressure

  • Strengths outside of the interpersonal disciplines

  • Misunderstanding


The goal of this post is to help with the third challenge and bring more clarity to the company Founder, CEO, Executive Director, and Managing Partner who wants to improve the culture for which they’re responsible. To do that, we need a shared understanding of each of the 4 company culture elements:


  • Purpose

  • Mission

  • Core Values

  • Practices


Before we dive into the four key areas of company culture, it’s important to understand the often confused term “Vision.”


 

Vision


At its core, Vision is a conceptual picture of what the future will be like.

Some people choose to think of it as equivalent to purpose. While that may be helpful to some, it can be limiting for others.


Many teams choose to combine the company’s Purpose with its Mission to explain their Vision. This approach can be valuable for a number of reasons including avoidance of redundant statements and ease of team adoption.


 

Purpose (the reason you're together)


Purpose is a clear and unambiguous statement of the organization’s reason for existing. Simon Sinek encourages individual people to “start with why”. Your company is no different.


As a founder, what’s the point of going through all the trouble of starting or growing the company you lead? Maybe it’s to get rich. Maybe it’s to build a legacy. It could be any number of things.


That’s your personal why.


In the same way, there’s an underlying driver that propels the company forward. It’s a reason it will survive through the hardships any new and growing company will go through.


What a company’s purpose is not


  • Purpose is not something that’s going to change over time. If it does, there’s a good chance there’s confusion between strategy and tactics - a topic for a different post.

  • Purpose is not the thing the company does - that’s the company’s mission.

  • Purpose is not a slogan or tagline.

  • Purpose is not the company’s vision. It’s part of the vision but it, alone, is not the vision.


An example of an effective company Purpose statement


Merk & Co, Inc.’s Purpose statement is a powerfully concise example of why they exist:

We use the power of leading-edge science to save and improve lives around the world.

Your company’s purpose statement reflects the crucial essence with such intention that, if you couldn’t accomplish it, you’d be compelled to shut the business down and go do something else.


 

Mission (what you're here to do)


The company’s Mission is a clear statement about what the company exists to do.


It is a high-level statement that provides a primary focus that is essential to avoiding mission drift over time. The well crafted Mission statement avoids inclusion of specific means and methods (e.g., Use Web3 technology to…, Write books that…., etc.) the company uses to accomplish the mission.


The mission statement flows directly from the company’s Purpose. With this direct connection to Purpose, the people in and attached to the company are able to better understand why the mission is important.


What a company’s mission is not


  • Mission is not the key focus areas or the ideal client profile (ICP) because these are more tactical in nature and are more likely than not to change over time.

  • Mission is not the detailed actions the company’s people take in particular ways. Those are practices and standard operating procedures (SOPs).

  • Mission is not the company’s vision. It’s part of the vision but it, alone, is not the vision.


An example of an effective company Mission statement


Lowes Home Improvement’s mission statement focuses directly on “what” their company exists to do without including specific tactics:

Together, deliver the right home improvement products, with the best service and value, across every channel and community we serve.

 

Core Values (the beliefs we agree will guide us)


Core Values are the shared set of fundamental beliefs the people in the company agree to use as the criteria for making decisions.


They’re core because they are the most foundational set of beliefs that, when repeatedly violated will (not “would”, “might”, or “may”) lead to difficult questions and very likely even to definitive actions like:


  • Disciplinary action and eventual firing an employee (regardless of their level or how much they contribute otherwise)

  • Ending a customer or client relationship (regardless of their commercial value)

  • Changing a source of supply (regardless of whether or not it is more expensive to re-source the materials or service)


Properly implemented Core Values help you say yes to the right things and people.


If you’re doing them right, they’ll usually cost you something along the way. There are many reasons a company’s Core Values aren’t working. In most cases, it’s because the Founder, CEO, Executive Director, or Managing Partner responsible for leading the company has not been able to drive the values into every operating aspect of the company.


What a company’s Core Values are not


  • Core Values are not a list of words designed to look good and “check the box.”

  • Core Values are not generalized and unmeasurable statements.

  • Core Values are not practices that describe how the work gets done.


An example of effective list of company Core Values


The United States Air Force (USAF) has a long history of following its core values:

Integrity First Service Before Self Excellence In All We Do

There have also been notable and serious values related failures in the USAF and other US armed services. Whether or not an organization’s people comply with the values is not a reflection on the values themselves.


Instead, the true measure of cultural strength in an organization is the way leaders investigate and correct those failures. This leadership behavior demonstrates the staying power and commitment the organization has to its most central beliefs.


 

Practices (the behaviors we agree to follow)


A company’s Practices reflect the normally expected behavior of all team members regardless of role or position when there’s a choice among good options.


Practices flow out of the organization’s Core Values and are in alignment with both the Mission and Purpose. They’re a guide that provides clarity to people so they will know how the company wants to represent itself.


What a company’s Practices are not


  • Practices are not a list of Standard Operating Procedures (SOPs).

  • Practices are not a restrictive set of rules that detail every kind of behavior.

  • Practices are not a list of do’s and don’ts.


An example of effective list of company Core Values


Authentic Brand clearly identifies the 28 Authentic Actions that help their team live out the firm’s Core Values. Here’s one example:

Speak the truth. We speak the truth with love, because we truly care. When something needs to be said to move the relationship or the business forward, we don’t hold back or delay. We speak plainly, concisely, and with empathy.

Practices are intentionally action oriented. It’s very common for them to begin with verbs like “Be…”, “Act…”, “Do…”


 

Company Culture Recap


The Four Critical Parts of a Company Culture are:


  • Purpose

  • Mission

  • Core Values

  • Practices


The company’s culture helps people align with a reason for coming to work and making active contributions. When they do, statistics like those provided by Gallup's previous engagement studies have indicated that the organization’s bottom line can improve by 20% or more when employees are actively engaged.


Leaders who build high performance teams are invested in building a sense of belonging and their bottom line(s) show it.


Further reading about Core Values


Core values are an important and often mis-applied part of the company culture.

You can read more about how to successfully set up your organization’s Core Values in our post on 3 Reasons your core values aren’t working for you (and what to do about it)


 

Paravelle offers executive coaching services to founders and CEOs with big growth goals. It's a crucial support structure that helps leaders avoid the negative results that come from being lonely at the top.


We might be a good fit to work together if you're:


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