The Power of Culture in Business
by Donny F Lauderback, President F2OnSite
Business Culture. A topic that has been written about, discussed and sometimes debated more so than perhaps any other in articles and papers written by some very smart people. When people talk about business success, they often focus on strategies, goals, and products; however, behind all that, there is a force at play that is just as important—Culture.
Culture has immense power as a competitive advantage, or it can be a competitive disadvantage. Whether it is an IT company, a heavy equipment firm, or even a hospital, culture shapes how people work, treat each other, and ultimately determines the success of the business.
Later in my career, I took multiple courses at Harvard Business School Online and quickly realized how much I did not know about the power of culture. Professor Michael Tushman emphasized that culture is a “social control system,” guiding behavior through shared values, norms, and reinforced actions. Similarly, Professor Charles O'Reilly from Stanford highlighted that culture can either be intentionally created or evolve over time. Both approaches can work; however, either one can go wrong if not managed carefully.
What I have learned is that culture cannot be one-size-fits-all. For example, I am a partner in a heavy equipment, earth-moving company where the culture is entirely different from F2OnSite, our IT Services company. What works in one environment might not work in another and that is completely fine—each business needs a culture tailored to its people and goals.
In the hospital and healthcare business, where I started my career many years ago, the culture was all about the patient—everything revolved around delivering excellent care. In business, it is often more customer-centric, but there is still a focus on creating the right environment to attract and retain top talent. I have walked onto customer sites where the culture felt like an afterthought—employees appeared to be waiting for a rescue. I would see heads pop up over cubicle walls looking at visitors, as if to say ‘Help Me!’ My job at a finance company in the early ‘90s used this approach: "Do this or get fired." That culture was toxic, and the results were predictable—high turnover and low morale. That company no longer exists, which is not surprising at all.
On the flip side, during the dot-com boom in the early 2000’s in Austin, the culture was the extreme opposite. Companies were throwing parties every weekend, blowing through millions just to entertain employees and potential customers. Some dot-coms even gave away BMW Z3s just to attract top software developers. The ‘High Tech Happy Hours’ drew (literally) hundreds, if not thousands of people every Thursday, sponsored by tech companies based in Austin who spent hundreds of thousands of dollars on the weekly event. While it was fun for a while, that kind of culture burned out quickly, leaving companies to pick up the pieces.
The point is that culture needs to be purposeful. Research from Harvard Business Review and other studies consistently shows that companies with well-defined cultures perform better. Employee well-being, as shown in a Harvard study, can boost productivity by up to 12%, demonstrating the tangible benefits of a positive workplace. Culture is not just a soft skill; it is a competitive advantage. This article will explore how culture works in business, the different ways it can develop, and, most importantly, how to fix it when it starts going off the rails.
Defining the Art of Culture
Culture is more than just the "feel" of a company—it is about the behaviors, expectations, and norms that influence decisions and actions every day. Some companies build their culture intentionally, while others let it evolve naturally. In either case, it defines how a business operates from the inside out.
One thing I have learned is that culture is not a standard one-size-fits-all. Take two budget airlines: Southwest Airlines and Spirit Airlines. Both operate in the same industry, but their cultures are completely different. Southwest has built its reputation on friendliness and customer service encouraging employees to go the extra mile, which shows in their cheerful interactions with passengers. On the other hand, Spirit Airlines focuses on efficiency and cost-cutting. Their approach might seem transactional, but it appeals to travelers who value price over comfort. The result? Two vastly different public perceptions, each driven by the values, norms, and behaviors at the heart of their cultures.
At F2, we have embraced elements of both approaches. For example, our “Meet on the Minute" culture was intentionally created to address a specific problem: people arriving late to meetings. Now, if an employee is not in the room by 10:28 AM, the door is locked. I remember people sprinting down the hall, trying not to be late as the door was locked at 10:29 sharp. So, all of our meetings start on the minute, for example at 1:06 PM, or 4:22PM. Another part of our culture, “Grab a Broom”, evolved naturally over time. It is a principle my father instilled in me—when there is nothing to do, find something to stay busy. Create value now, even if it can wait until later. These norms are as much a part of F2OnSite culture as the services we offer.
Culture builds creativity and connection. Studies have shown that positive affect—a sense of well-being at work—fuels creativity, improves problem-solving, and strengthens workplace relationships. It’s not just about creating a nice environment; it’s about making sure people feel empowered to contribute and innovate. That’s why we’ve incorporated our F2DNA norms like “Do You Need Me?” which both fosters respect for each other’s time and encourages stepping up when needed.
Culture is built on three elements: values, norms, and behaviors. Values are what a company stands for—its core beliefs. Norms are the unwritten rules that guide behavior, and behaviors are how those values and norms manifest in day-to-day work. For example, at Southwest, their values of friendliness and fun translate into behaviors such as flight attendants joking during safety announcements. At Spirit, the focus on efficiency drives behaviors like minimizing in-flight services to keep costs low. I will be honest, I do not fly Spirit; however, I have friends who swear by it. Of course, they travel with a backpack, a bottle of water and some snacks.
There is also an important distinction between descriptive norms, the behaviors people see, and injunctive norms, the behaviors that are expected or approved. At our company, a descriptive norm is being on time for meetings. People see it, they follow it. However, we also have injunctive norms such as stepping up to help a colleague, even when it is not part of an employee’s formal role. These unspoken rules are just as influential as the written values that appear on our website.
Strong cultures also help with employee retention. According to Gallup's research, companies with high employee engagement see 59% lower turnover, which highlights how culture impacts retention. Here, we see that employees who make it through the first year typically stay long-term. We know that culture needs to be nurtured carefully to ensure it remains an asset, not a liability.
A strong culture is a competitive advantage, but only if it aligns with entity goals. Southwest Airlines has capitalized on its culture of friendliness and customer care, creating a loyal customer base. Spirit Airlines thrives by being upfront about what they offer—an ultra-low-cost option with no extras. Both approaches work because they match their business models.
Our culture of trust, respect, and accountability has helped us build strong relationships and retain top talent. In contrast, I have also seen companies where culture was not a priority, and the results are detrimental—high turnover, low morale, and a general sense of disconnection. That is why managing culture is essential, whether it is created intentionally or allowed to evolve over time. If not nurtured, culture can become a liability instead of an asset.
The Evolution of Culture Across Industries
Culture is a powerful force, but it does not always follow the same path. Every industry, every company, and every team experience culture in its own way. No matter how carefully a leader tries to guide it, culture will evolve—sometimes for the better and sometimes for the worse. The leader can set the tone, but the people within the organization play a massive role in what the culture ultimately becomes.
For example, I am an investor in a Texas-based, earth-moving company that has been family operated since 1983. In this industry, mistakes happen and sometimes happen often. We work with heavy machinery, and errors are inevitable, but the culture is forgiving—we will rehire people who make mistakes, knowing they have learned from their experiences. Contrast that with a high-pressure corporate environment, where mistakes could cost an individual his job and make him ineligible for rehire. What is even more interesting is how small-town dynamics affect this company’s culture. Nepotism rules do not hold up because of the familial nature of the workforce. Families are so interconnected at the company that cliques form naturally, and those cliques can be nearly impossible to penetrate. Even when we set cultural values, those familial connections can overtake them, creating a new, clique-based culture.
It is a reminder that no matter how carefully a culture is designed, it must be monitored closely because it will shift, evolve, and sometimes deviate from the original plan. One danger in this small-town familial culture is that when an employee is upset, a dozen others may become angry. Word spreads fast, and culture can become toxic very quickly; therefore, it is important to understand that one-size-fits all culture does not work, period!
Another experience that opened my eyes to the concept of culture came 25 years ago during the “dot-com boom”. At the time, I was just starting in a new role in sales, and I was eager to meet all the managers. During each interaction I would introduce myself and ask if they had time to chat. I always got the same response:
"Great to meet you! I look forward to our meeting,” and then, I was ushered out of their office. Later, I was told by a coworker that I needed to send out a calendar meeting invite to formally schedule a time with them. When I asked why, (since it was less than 100 employees at that time and just walking around seemed much easier) a colleague said, "That’s just the company culture."
It was the first time I heard the word “Culture” described as a business concept. That moment made me realize how deeply culture is woven into even the smallest interactions in a company. FYI, I sent out the invites, and some accepted immediately for a meeting five to ten minutes later.
Over the years, I have seen cultural extremes across different industries. After college, I worked as a paramedic and firefighter, where the culture was one of seniority over skill or education. In this environment, the person with 30 years of experience could say whatever he wanted to whomever he wanted, whenever he wanted, and in front of whomever he wanted, with no consequences. Even if this individual did not have the rank or education, seniority placed him at the top of the pseudo social pyramid. Comparing these extremes shows how culture shifts over time—what worked decades ago might be obsolete today.
I worked with a WWII veteran once who was one of the original Doolittle’s Raiders and was an “I can say whatever…” kind of individual. He would call a hospital administrator an S.O.B. and get away with it; in fact, he did so on multiple occasions. The culture was such that he was untouchable, even by top level executives–and he was indeed, untouchable by all.
HBS Professor Mike Tushman would call this ‘Informal Power’, part of a company’s culture where individuals possess cultural capital to affect change, without the title or official standing.
The Role of Leadership in Sustaining Culture
Leadership plays a crucial role in sustaining culture; however, when leaders come from different backgrounds, have varied life experiences, and bring different styles to the table, keeping a consistent culture can be a challenge.
I have experienced this firsthand. I grew up in West Texas in Hereford, Texas, a ranching and cattle community, where Friday night football was king and 'Americana' culture ruled.
My business partner, Jonathan Poole, grew up in Twickenham England, just west of
London, and had a completely different set of European cultural influences than I experienced.
So, how do two people with such diverse backgrounds create and agree upon a company culture that is sustainable and consistent? Our secret was trusting each other to rely on whoever knew best in any given situation. We constantly discussed the "why" behind our company’s culture and tried to learn from each other.
One of the most important elements we implemented was the “Stay in Your Lane” principle, which is a key part of our company’s DNA. Staying in your lane is not about limiting an employee’s role; it is about trusting others to handle the things at which they are best. This builds trust and prevents conflicts. It allows each of us to focus on our strengths—mine in straightforward, small-town values and his in tech, finance, and a much more worldly and global view on how things should be accomplished.
One of the unwritten rules we also embraced was to discuss issues, and if there was no clear path or answer, we would ‘do nothing’—whether cultural or operational. If something did not feel right, we addressed it head-on, but only made changes when we both agreed we were doing the right thing. This approach created a culture of accountability and trust at F2OnSite , where issues were never allowed to fester, and there were fewer bad decisions.
Measuring and Adjusting Culture
Measuring culture is essential because it ensures that the company’s values and practices align with the behavior of its people. At our company, we have found a key indicator of cultural success is employee retention. If an employee makes it through their first year, and they have fully embraced the culture, they will likely stay with us long term. Our goal is to create an environment where culture becomes second nature.
To ensure we maintain our culture, we use several strategies:
Weekly corporate calls: Every Friday at 10:28 AM, we hold a call with all our corporate employees. Starting on the minute shows respect for each other’s time.
Standardizing meeting rooms: We use consistent room names for our virtual meetings, eliminating confusion about where or how we are meeting. It is easier to say, “Meet me in Room D”, rather than setting up a link, room, or anything that is a waste of time.
Culture reminders: Small gestures—such as keeping money under the keyboard as a reminder that we are here to succeed—are not only simple, but powerful culture reinforcers. Everyone is required to have their camera on and be onscreen during online meetings, regardless of whether our customers are or not.
Communication: We communicate with a common mindset, we discuss meeting times etc in Central Time, so that communication of start times is consistent, although if employees are in a different time zone, they communicate and schedule meetings referencing their time zone, but for corporate communications we always use CST.
Again, according to Gallup research, companies with high employee engagement of culture see 59% lower turnover, showing how culture impacts retention. We consistently communicate our core values of trust, empathy, and accountability and our full F2DNA list to ensure our employees are aligned.
Conclusion: The ONGOING Art of Culture
Culture is not static; it is a living entity that evolves within a company. Whether intentionally created or allowed to grow organically, culture must be measured, nurtured, and adjusted. Again, at F2OnSite, we have learned that when employees embrace the culture within their first year, they become long-term assets.
To maintain and strengthen culture, we keep in mind the Five P’s of corporate culture: People, Purpose, Processes, Performance, and Passion:
People: Culture starts and ends with people. Trust and empathy are key to ensuring our team is aligned with our vision.
Purpose: Every business needs a compelling purpose that drives strategy. Without a clear purpose, culture drifts. We revisit our Purpose each year and modify it and our culture as our business needs and offerings expand and change.
Processes: Clear, repeatable processes—such as "Meet on the Minute"—help align people with the culture. “Everyone is on camera”, sounds like a small detail but it matters when everyone buys in to the F2DNA and culture.
Performance: Purpose drives Strategy and Culture drives Performance, which is measured through customer satisfaction, employee retention, and open-door policies with feedback.
Passion: Culture thrives when passion is behind it. At our company, we live our values daily, from starting on the minute to offering educational opportunities, thus assuming positive intent in all things.
As Professor Michael Tushman from HBS puts it, "Culture is a social control system." If nurtured well, it will continue to drive success. Culture is about people, and that is what makes it both challenging and rewarding. It reflects how we treat each other and what we believe, and if nurtured, it will shape success for years to come.
Donny Lauderback is the Founder and President of F2OnSite, a national provider of onsite IT services based in Dallas (Plano) Texas. He resides in Austin in the Lake Travis area. His work experience the last twenty-five years has resulted in his strong background in executive management, human resources, staffing and recruiting. He is a continuous student at HBS and has multiple specialization certifications in Artificial Intelligence from Vanderbilt University.
Footnotes:
Michael Tushman, Harvard Business School: Culture as a social control system
Charles O'Reilly, Stanford: Managing evolving cultures
Harvard Study on Productivity: Employee well-being and productivity increase by up to 12%
Gallup Research: Employee engagement reduces turnover by 59%
Southwest Airlines Culture: A culture of customer care
Spirit Airlines Culture: Efficiency and cost-cutting culture
Additional Reading and Reference Material:
Forbes - Company Culture: Definition, Importance, and Best Practiceshttps://www.forbes.com/advisor/business/company-culture/
Harvard Business Review - The Leader’s Guide to Corporate Culturehttps://hbr.org/2018/01/the-leaders-guide-to-corporate-culture
Gallup - What is Workplace Culture?https://www.gallup.com/workplace/236562/what-is-workplace-culture.aspx
Stanford Business - How to Design a Corporate Culturehttps://www.gsb.stanford.edu/insights/how-design-corporate-culture
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#HBSOnline #HBR #CompanyCulture, #BusinessCulture, #CorporateCulture, #LeadershipInBusiness, #EmployeeEngagement, #WorkplaceCulture, #EmployeeRetention, #ContinuousLearning, #BusinessValues, #OrganizationalCulture, #LeadershipDevelopment, #TeamCulture