Understanding organizational culture: what it is and how to shape it

Executive overview

Culture is not a poster on the wall — it is the sum of underlying assumptions and authentic values that drive behaviour. Most leaders either ignore culture or try to manufacture it, producing lists nobody believes in.

Real culture must be excavated from what people actually do, not declared from an executive meeting room.

The gap between espoused values and lived values is where culture breaks down — and where performance quietly bleeds out. The path forward is patient, layered conversation that progressively reveals what is actually driving behaviour, so leaders can decide whether to reinforce or redirect it.

Three lenses for reading culture

• Artifacts — visible signs: greetings, rituals, physical spaces, how meetings run.
• Espoused values — what the organisation says it believes.
• Underlying assumptions — the shared, unspoken beliefs that actually drive decisions.
• Schein's model starts at artifacts but requires digging to the assumptions layer to understand root causes.
• A random admin employee who cannot explain the culture posters is a diagnostic signal: the values were invented, not discovered.

Why culture is hard to see from the inside

• Culture is like the water a fish swims in — invisible to those inside it.
• National culture example: Americans rarely identify patriotism as a cultural trait, yet they stand for the national anthem at every sporting event.
• People joining a new organisation see cultural differences immediately; after months inside, those differences become invisible.
• This is why outside perspective — consultant, supplier, customer — is essential for accurate diagnosis.

Founder values as cultural origin

• Trader Joe's founder Joe Coulombe opened a neighborhood store and personally greeted every customer.
• Every hire mimicked him; the behavior became an assumption, then a company-wide norm.
• Decades later, staff at every new store greet customers by name without being told to — the artifact of a founding value.
• Culture persists through climate shocks: during Nashville ice storms that emptied shelves, Trader Joe's staff greeted customers with the same warmth.

Authentic vs. manufactured culture

• Authentic culture: values that employees actually hold, can articulate, and voluntarily perpetuate.
• Manufactured culture: values assembled in a boardroom, posted on walls, and unrecognised by the people they supposedly describe.
• When culture is authentic, employees take ownership — it becomes "us", not a mandate from above.
• Authentic culture has direct bottom-line impact; misaligned culture suppresses performance even when a company is technically profitable.

The espoused-vs-actual gap in practice

• A global organisation publicly committed to inclusion; HR messaging was textbook-correct.
• Internally, a clear (unspoken) hierarchy determined who would succeed and who would not.
• Employees discovered the gap after one to two years — most quietly left rather than raising legal challenges.
• The subtlety of culture: exclusion was never codified, so it was never addressed.
• Performance was below what it could have been; the authentic culture was a drag, not a driver.

Culture vs. climate

• Climate is weather — temporary external conditions (recession, supply disruption, a harsh winter).
• Culture is the underlying structure that persists through climate shifts.
• During the 2007–2008 downturn, companies restructured, shed staff, and changed tactics — those were climate responses.
• Core culture (how decisions are made, what matters, how people treat each other) remained intact underneath.
• Confusing climate with culture leads leaders to change the wrong thing.

How to start a culture conversation

• Begin with another trusted leader: bounce ideas, test hypotheses, build initial coalition.
• HR — especially professionals with organisational development backgrounds — is a structured resource.
• Questions to ask the team:
  • What are our real goals?
  • What tactics do we default to without thinking?
  • At what point do we encourage different thinking — and when do we shut it down?
  • What are the ways we interact that we won't or can't talk about?
• The last question surfaces tacit cultural rules — the most powerful and least visible drivers.

Working with outside perspective

• An outside consultant brings the "fish out of water" view that insiders cannot generate.
• Suppliers and customers also hold outside perspective and can identify gaps between stated and lived culture.
• Dave's example: his early employer championed employees over customers in every dispute — internally celebrated, externally read as "stubborn" and customer-dismissive.
• Most customers will not say this. They simply leave. Waiting for explicit feedback means the damage is already done.

Culture change: what to expect

• Culture is not changed in one meeting or one offsite — it emerges through repeated, layered conversations over months.
• The onion metaphor: each conversation peels back another layer; early sessions reveal the obvious, later ones reach the core.
• Large family enterprises have spent months revisiting the same conversation before the authentic values became clear.
• Set a recurring rhythm — monthly culture conversations — even if just sharing and discussing a relevant article.
• Harvard Business Review has accessible, practical articles on culture suitable for group reading.

The leader's disposition

• Working on yourself precedes working on others.
• Curiosity about why people hold different values creates space — for understanding, for relationship, for growth.
• See people and organisations as a snapshot in time, not as permanently entrenched.
• The goal: help people move to a more productive spot, not root out the problem.