Company Culture and “Fit” Are Real – and Really, Really Important

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Dec 5, 2014

Editor’s Note: Last month, longtime TLNT contributor Laurie Ruettimann wrote about how Yes, Your Company Culture Is Just a Myth. Some took exception to Laurie’s perspective, including new contributor Ed Frauenheim. Here is his response:

C’mon, Laurie.

It’s one thing to warn against blowing smoke about workplace culture and hiring clones without considering hard data. But to claim in your recent TLNT article that firms don’t have a culture, or that “fit is nonsense,” is itself nonsense.

In fact, the data suggests that company culture is more important than ever to business success. And that paying attention to team chemistry — in addition to competency and character — when hiring is vital.

To the extent it’s trendy to talk about culture and fit, that’s a good thing. For far too long organizations have given short shrift to how it feels to work in a place.

The fact that leaders are paying more attention to building trusting, inspiring, humane workplaces is positive for employees and employers.

Culture matters

In your blog you say the term “culture” doesn’t apply to companies, because the way people behave boils down to the way they are dominated by executives.

That’s just wrong, Laurie. To start with, let’s define “culture.”

Culture is a set of beliefs, attitudes and behaviors that define a group of people. The notion that organizations have cultures is well-established in scholarly research and it makes sense intuitively.

Think about your own workplaces. You can probably describe the cultures of those places in a few words or statements. Terms like “warm,” “intense,” “backstabbing.”

And those cultures strongly shape the experience of people. My colleague Bob Lee tells a story about two organizations that gave out turkeys to employees for the holidays.

In Company A, where staffers had come to distrust management, the response was “All you’re giving us is a measly turkey?!!” At Company B, where people felt appreciated by management, the response was “Thanks for the great gift!” Same company action, with dramatically different outcomes depending on the culture.

You basically admit companies have a culture, calling it a “vibe.” But you say you can’t call it a culture because the leadership team calls all the shots, “has particular points of view about how work should ‘feel.’”

Sure, executives shape culture — more than anyone else. But their opinion on how work should feel matters less than the actions they take and the practices they establish. The CEO can proclaim she loves transparency, but culture will be cloudy if she doesn’t share financials on a regular basis, explain strategy in detail or make herself available to answer questions from the rank-and-file.

It’s not all about Execs

What’s more, middle managers can have a big impact on how work feels — cultivating hot spots of creativity or killing a team’s spirit. And in today’s more collaborative workplaces, peers are increasingly powerful in terms of a person’s experience at work.

You may be right that some companies are paying “employees in culture when we can’t pay them in cash” — in other words, trying to compensate for low pay with overblown claims of excellent cultures. But truly excellent cultures are highly valuable — to employees and employers alike.

Great workplaces allow their people to make a living even as they enrich life with meaningful work and social ties. And growing mounds of research show that high-trust cultures crush the competition.

For example, a 2013 report from research and consulting firm Interaction Associates found that “companies adept at practices that reinforce strong leadership, trust, and collaboration enjoy better financial performance.”

Why do the best cultures succeed? That leads us back to fit.

To be sure, there should be a place in any healthy culture for some employees who “don’t go along with the flow,” as you put it. But go too far in that direction and you’re going to break Stanford professor Bob Sutton’s famous “No Asshole Rule,” with debilitating results.

If you have a culture that’s all about positivity, playfulness and pleasing customers — say a company like Ruby Receptionists — and you hire in a deeply cynical person with a mean streak, you’re threatening both the chemistry of the place as well as the business strategy.

Getting “Fit”

On the other hand, if you hire people who are inspired by your organization’s vision and who are likely to enjoy the vibe of your workplace — whether that be frequent hugs or less-touchy-feely kinds of socializing — you can strengthen your culture and your business results.

In fact, given the high costs of replacing employees who don’t work out, it makes little sense to ignore the likely culture fit of a candidate. And Laurie, while you worry about companies using fit as a cover for bias or data-poor decisions, the best companies check for culture compatibility while also testing for competencies and working hard on diversity. Consulting giant Accenture comes to mind. It’s a “both-and” situation.

It’s not just on organizations to try to find people who fit their culture. Smart firms are making it easier for applicants to see if they will groove there — being transparent about their cultures, practices and what employees say about them.

This is partly because people increasingly expect to make job decisions based on sound data — such as Great Rated’s representative surveys of employees — just like they research vacations, personal electronics and cars that will work for them.

Indeed, power is shifting away from the grim bosses-rule-all work world you describe, Laurie. At Great Place to Work, we believe we’re at the dawn of what we call The Great Workplace Era, a time when all people can expect to work at a place where they trust their leaders, take pride in what they do and enjoy their colleagues.

Mounting evidence

This more hopeful epoch is being driven by factors including the rise of balance-minded, meaning-seeking Millennials, increased transparency into organizations and growing proof that high-trust cultures improve business results.

As a self-described cynic, I imagine you doubt we’re headed to such a work world. But as a data-lover, please take another look at the mounting evidence, Laurie.

Culture and fit are real. And they’re really important.