Company culture - what an overused term that very often has been used in a wrong way or with wrong expectations. Culture is not something created in People Operations and Leadership room and then shipped out like a new guideline, list of values, or a slogan. Nor it can't be healed with organizing a better Summer Day Festival or doing Friday Framily Lunch events. Yet it is the defining factor of who you as a company are able to hire and keep. Think of yourself and imagine a place you want to work. Is the place you are imagining similar to the company that you own? Now think of who and why would want to work for you? Would you want to work for you?

3 components of company culture through my eyes

For me, company culture starts from leadership drawing lines of what is accepted and what is not. By drawing lines I do not mean a list of Do's & Don't but rather guidance on the topic of ethics. For example, when the company is set on filling the sales targets, then what is the line that can't be crossed to make the sales? Claiming to be the good guys and having a value of honesty on the wall next to "we make things happen" can easily result in that everyone will use their own inner compass of what is right in their mind of making the sale. Unfortunately, inner compasses can steer towards pushing our limits in an unhealthy way or breaking the boundaries of morals. For example having a competitive winners culture, without boundaries, can easily be interpreted as "winning at all cost"

Culture's growth is supported by making sure people are equipped with knowledge of what are the tools they can use to make decisions or execute their work plus general communication on what is expected. Employees should not have to figure it out that on their own. Or if they do, then most likely it will have a different result than you might have hoped for. For example communicating that even though people should put their all into "we make things happen", then it can't come at the expense of their health or personal time. By defining boundaries you empower people to utilize their freedom in their role and keep them from having to guess what is expected or accepted. The boundaries, or ethics as I would call them, have to be explicit and repeatedly communicated on all levels of the company.

And culture is sustained by purposefully celebrating when people uphold the values by putting them into action. And showing clearly when the values and boundaries are not executed, and therefore not accepting it unquestionably.

Top snippets from what Mr. Horowitz has said

➛ Culture is not a set of beliefs, but a set of actions. It is not what is in your heart, what you declare at an all-hands meeting. In a company context, it comes down to little things from how you treat each other to how you treat your customers to micro-decisions. Do you return the unanswered call in an hour, in a day, in a week, or never? In a business deal, do you look for the partnership factor or focus on the price?

➛ Culture is about the behavior that is allowed and taking place in the work environment. Culture becomes visible in the little actions when you as the CEO are not there to guide and evaluate.

➛ Value is what you believe, what you aspire to. Virtue is what you do.

➛ From a company perspective, you should think through not only what you want, but how you will get it. Where is the ethical line of this company?

➛ You get oriented to an organization and its culture by experience and example. The experience you get from others' treatment towards you and how you see people act with one another. Plus the example which is shown by the more senior or successful colleagues. What is the behavior of those who are the most looked up at the work environment? What is allowed to them? What makes them successful?

"When you look at your company, you can’t say people are going to behave according to the values on the wall, they’re gonna go “oh that person that just got promoted lobbied the CEO for six months, took credit for her work, did those things”. That’s your culture, that’s how it gets set because when I’m coming in that’s what I have to do to succeed in your company.  So when you think about why is your company failing you have to ask yourself what is it like for a new employee here, what have they experienced, what’s their experience of the environment. It’s a complex dynamic and one of the reasons I wrote the book that way I did is you kind of have to understand holistically how does a culture move and then you can recognize it and make corrections and learn to program it, that kind of thing." - Ben Horowitz

➛ Culture is often invisible but with real consequences.

➛ The "why?" matters more than the "what?".

➛ Cultural cohesion versus top players. Having a clear understanding of company culture does not mean that everyone is supposed to be the same. Honoring the same values and showing virtues is about cohesion not cloning the same type of people. In an NFL team, you will have players who are big and weigh 160kg and skinny players, run fast and weigh 80kg. If you have all 160 kg players you will lose and if you have all skinny players who run fast, you will also lose. The key is valuing different strengths and not only the ones that you have. The diversity and inclusion problem very often is that hiring managers can't see talents that they do not have. You have to put effort into seeing and valuing things in people that you can't do.

What does it come down to?

At the end of the day, understandably every new employee brings pieces of their own culture to the company they have joined. Therefore the culture will go through changes and it is about mindful culture management that determines if the changes are for the good or the bad. Having a defined understanding of what the company is determined to have their culture baseline, helps to keep the course. With all newcomers, to set their compass on the same course, have the candidate presented not only with the offer letter but also the company culture deck. Ensuring they have a way to understand the company they are joining helps them to make a conscious decision if working in this culture is suitable for them. And always keep in mind, that people are adaptable - therefore just because a person has not experienced a similar culture before does not mean they can't embrace it.

One thing is encouraging bad behavior but another side of it is not making it clear that the means are as important as the results. Trusting your employees is a sign of a strong and contemporary leader, but trust without tools is a recipe for a mess.

Ben Horowitz is a leader, venture capitalist, management expert, and a New York Times bestselling author of "The Hard Thing About Hard Things". Read his book "What you do is who you are" and listen to many podcasts like this from a16z Podcast.

For more about culture decks, read from Entrepreneur Europe and see examples from CultureGene.