13.07.2016

What is a Culture First Company - And Why Does it Matter?

We use the term ‘Culture First’ a lot at Culture Amp. We use it both to describe a type of organization (a ‘Culture First company’), and as a descriptive term (‘We believe to be successful, you need to put culture first’). It's also our mission - both for our company, and those we work with - to grow Culture First companies.

It shouldn’t come as a great surprise to discover that a Culture First company is one that puts culture first. But ‘first’ ahead of what? And why would you want to do that?

How the Culture First movement has evolved

Putting culture first means turning traditional boardroom conversations upside down. Instead of concentrating first on the end result (profits to shareholders) a Culture First company focuses first on employees, as the driver of that performance.

Fifty years ago, conventional wisdom had firms loading their board with lawyers and accountants and concentrating almost exclusively on finance and risk. Balance sheets and P&Ls were the only tool management had to track how the business was performing. Management thinking was “if we can make it cheaper, or faster, or better, profits will increase.”

A Culture First boardroom doesn’t look like that.

Fast-forward to a few decades ago and that same management thinking had become all about the customer. Lawyers and accountants were joined at the board table by marketing specialists. The management thinking shifted to “make the customer experience good and the profits will follow.”

A Culture First boardroom doesn’t really look like that, either.

That's not to say a Culture First boardroom does not have profits to shareholders as its ultimate goal and knows that to be financially successful, a company it must be customer-centric. But we’ve only recently begun to recognize the Culture First Company focuses first on employees as the path to both.

The Culture First boardroom has opened up a chair at the table for a People Geek – someone who understands people and data and can tell management whether employees are truly on board and engaged (backed up with quantitive analysis). The same type of analysis that we've used in digital marketing, only this time the focus is on your people and what is working and not working, for them.

Customer satisfaction should be understood as a lag indicator of another force. Customers don’t buy what we’re selling until they buy why we’re selling. The 'why' comes from those who believe in the brand promise of your organization. In this world, you can’t have highly engaged customers if you don’t have highly engaged employees.

A Culture First company is one that measures employee behaviors against the values of the company and does what is necessary to ensure all employees buy in to those values.

Why should organizations focus on Culture First?

Quite simply, culture is the biggest lever that any organization has to drive performance. It’s the bottom line and a leading indicator for almost every other performance metric. A Culture First company recognizes that if you take care of the culture, then the customer experience and profits will take care of themselves.

Consider animal food, product or service companies that promise ‘pets before profits.’ Rather than risk any animals being harmed, a pets-before-profits company may recall products at great expense or refuse to perform unsuitable services. Employees (who are probably not big-game hunters and puppy-kickers) know that they can put the wellbeing of an animal above a lost sale and will be supported for it. The result is animal lovers give their loyalty to a company with the same values. Those companies that can prove that ‘pets before profits’ is imbued in their culture, have, ironically, seen profits soar.

We do the same at Culture Amp: Our people are are empowered to work independently and make decisions that are driven by our core values and culture.

Is there only one best culture?

Different organizations have different cultures and it can be a mistake to try and transplant another company's culture to your company. Organizations have different cultures, and their people are often driven by different motivations. Copying another culture won’t work unless both companies address identical problems, have a common values structure and share the same makeup of employees. Every organization should find its own cultural DNA.

For example, complete transparency of salaries, revenue and marketing strategies works for Buffer, but the same culture is unlikely to be successful if transplanted to, say, a Wall Street investment bank.

When Amazon bought Zappos for $800 million, they weren’t paying for an online brand or a supply chain. They were paying for a unique culture that informed everything Zappos does. Amazon, sensibly, has not tried to change the Zappos culture to that of Amazon, but nor has it adopted Zappos' culture across all its business units.

Culture First is about performance, not perks

Building a Culture First organization is not easy. Culture should not be something that only exists while the CEO is watching. It should exist in every employee’s actions, every day of the year. It is not about the perks, or about being being perfect (a perfect culture isn’t a culture, it’s a cult). It’s definitely not about following a manual with an unyielding adherence to the letter of the rules, no matter the circumstances.

Despite the effort, Culture First is definitely worth the journey. Because as more and more companies are beginning to recognize, if you don’t get people and culture right, your efforts in every other area will ultimately result to nought.

To learn more about Culture Amp, contact: sales@cultureamp.com

About Culture Amp

We've brought together experts in technology, data science and organizational psychology to ensure you can get the clarity you need, when you need it. Measuring employee engagement, experience and 360° feedback is simple using Culture Amp.

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