Once a company gets off the ground floor, the entrepreneur's most important job is creating a corporate culture that can continue to win as the company grows and as the market for its products continues to change.

Entrepreneurs who build cultures that adapt easily are more likely to succeed in the medium and long term. Entrepreneurs who build inflexible cultures will eventually see their brainchild behave as if it's brain dead.

What is Corporate Culture?

Some people think corporate culture is how a company appears to the outside world: Do people wear ties or hoodies? Is there an in-house gym? Are video games in the break room? Flextime or time clock?

However, just as a negative person can wear a constant smile, companies with stodgy cultures can imitate the appearance of a "cool" workplace. Indeed, its easier for a company to replace its window dressing rather than to change a failing culture.

Other people think that a company's mission statement defines its corporate culture. However, there are hundreds of companies whose mission statements promise "great customer service" but where, in practice, customer service is neglected.

Based upon my observations of hundreds of companies, I've come to the conclusion that corporate culture consists of the core beliefs of a company's founder and the executives who oversee the company's period of initial growth.

I've found eight of these core beliefs, but there are three that are the most important, as I explain in this video:

3 Questions That Will Help Define Your Company Culture

How Corporate Culture Works

To illustrate how core beliefs create a corporate culture, let's step outside the business world for a moment.

For the past few decades, the US government has been waging a so-called "war against drugs." The phrase reflects a core belief that the best way to handle drug addiction is to wage war upon the addicted. Thus we fund SWAT teams rather than methadone clinics.

In exactly the same way, when the core belief that "business is warfare" automatically creates war-like strategies and tactics. By contrast, the core belief that "business is an ecosystem" creates strategies and tactics that are, well, more "organic."

As a result, companies with different cultures will approach the exact same business opportunity in very different ways:

How to Create a Corporate Culture

In the post "What Truly Great Bosses Believe" (excerpted from Business Without the Bullsh*t), I go through all eight of the core beliefs that tend to result in a corporate culture that is flexible and thus adapts more easily to changing conditions.

The essential idea here is that these core beliefs are a choice. Once you're aware of the consequences of these core beliefs, as you build your company you can choose to emphasize and encourage the beliefs that will create the best results.

The most important place to do this is in your own mental habits. By being self-aware of your own thought processes, you can consciously edit out a tendency to think in battlefield metaphors and reframe situations using the ecosystem model.

Similarly, when you're interviewing candidates for important positions, listen to the metaphors that the candidate uses. For example, a candidate for a marketing position who talks about "destroying competitors" might not be the best fit.

Finally, an entrepreneur create a more flexible culture by guiding meetings and presentations away from imagery and concepts that encourage inflexible thinking.

For example, if the management team focuses too much on organizational structure (corporation as machine), the entrepreneur can reframe the problem of "how to work together" as a leadership challenge (corporation as community).

As a company grows, the constant reinforcement of core beliefs eventually create a culture that reflects those beliefs.

3 Questions That Will Help Define Your Company Culture
Published on: Oct 1, 2014