Culture Beats Capital — A Short Guide to Shaping Corporate Culture

What is corporate culture?

Corporate culture is the collectively accepted, deeply rooted code of conduct within an organization. Through everyday actions and interactions, it signals “how we do things here — and how we don’t.” This code evolves over time and continues to develop. It forms the basis for decisions like who becomes part of the team — and who doesn’t. The most visible indicator? Behavior.

If we want to work with corporate culture, we need a clear and practical definition. Otherwise, we risk talking past each other.

Who and what shapes corporate culture?

Corporate culture is shaped over time. While everyone contributes, it’s especially influenced by individuals in leadership or key positions. Why? Because they define rules and processes, make decisions, set examples — for better or worse — and have more visibility and authority than others. The saying “like leader, like team” still holds true.

But people alone don’t shape culture. Structures do too. Your management system — the rules, processes, and organizational setup — plays a powerful role. So does the way communication happens: formats, tools, tone, and frequency all matter. This might surprise some — we often think of structure and culture as separate. But in truth: structure shapes culture, and culture shapes the people who shape structure.

This is also why you can’t change culture directly. You can influence it — by changing the people, rules, or communication — but you can’t fully predict the results. For every intended effect, there might be some unintended consequences.

So if you want to work on your culture, your main levers are:

• People
• Your management system
• How you communicate

Are “Indians, women, chemists…” all the same?

Let’s clear this up: stereotypes don’t work — especially when it comes to culture. “Germans are more punctual than Indians.” Really? Are all Germans more punctual than all Indians? “Women are more sensitive than men.” Really? All women? All men? So what about a punctual Indian chemist versus a sensitive German sociologist? Even if group averages differ, there’s a massive overlap between individuals. Culture isn’t binary or linear — and group identity doesn’t define individual behavior. In a company, real leadership shapes real leadership culture — which might have little to do with national or professional norms. In fact, corporate cultures can transcend national or subcultures entirely. That’s why it’s better to ditch the stereotypes and observe what’s actually happening.

One culture? Try dozens.

Let’s be honest: no company has just one culture. It has many. Culture varies by location. The marketing department has a different culture than production. Engineers think and work differently than lawyers or business economists. On top of that, specific topics also create subcultures — think innovation, leadership, quality, or error culture. And these subcultures can develop layers of their own.

Bottom line: your company doesn’t have a single, standard culture — and that’s a good thing!

Quality and error cultures

Quality culture and error culture are facets of corporate culture. Yet they’re often misunderstood. Take the common complaint from quality managers: “We lack a quality culture!” That usually misses the point. Poor quality culture is rarely the root cause of quality issues — and increasing “quality awareness” alone won’t fix the problem.

More often, the real culprits are:

• People (and how they’re rewarded or punished)
• Processes and rules
• Communication

To improve, you need to:

• Identify false incentives
• Eliminate dysfunctional rules
• Resolve conflicting goals

And crucially: figure out which managers are consistently undermining quality through their decisions or behavior. Now let’s talk about the often-misused term “error culture.” What’s usually meant is a learning culture, where people can openly acknowledge mistakes — their own and others’ — so the whole team learns and avoids repeating them. That’s great. But in some areas, mistakes simply aren’t acceptable. Think high-risk tasks or safety-related roles. In these cases, “error culture” is the wrong framing. What’s needed instead is discipline, accuracy, caution, and prevention. It’s important to differentiate: some departments need space to experiment and fail; others need to eliminate failure altogether. And one more thing: people in organizations generally want to deliver quality. If they don’t, it’s rarely a character issue — it’s a system issue.

Mission statements fade, appeal fizzle

Many cultural initiatives revolve around creating a new mission statement. But here’s the thing: “Written mission statements often just reflect what leaders or employees miss the most.” (Thanks to Jochen Muskalla for that one — it’s stuck with us for years.) So the posters go up. The mission is published online. And then… nothing. If the company hasn’t changed the people, processes, or communication structures, then — culture included — everything stays the same. Worse, expectations rise and then crash. Disillusionment sets in. The mission statement becomes just another forgotten document. Mission statements only work when they articulate what’s already alive in the organization. So beware of cosmetic fixes. Real cultural change is work on the management system.

What to do instead

1. Understand your culture(s).
Use a shared, descriptive definition. Don’t label it as “good” or “bad” — just observe what is.

2. Identify the drivers of culture.
Which people, rules, and communication styles influence behavior? Pay attention to rewards and punishment, contradictory rules, and conflicting goals — great audit topics!

3. Put the right people in key roles.
Hard to do, but essential. Remember: “Hire for attitude, train for skills.”

4. Design a culture-compatible management system.
Possibly the toughest part: shape your rules and communication intentionally. This takes iteration — you won’t get it right the first time.

5. Do nothing before you’re ready.
Only start a culture project if you understand the causes, have clear goals, and realistic solutions. Work on it cross-functionally. Pure wordsmithing won’t move the needle.

Final takeaway

Corporate culture isn’t something you can change overnight. It’s the result of your people, your processes, and your rules. Forget stereotypes and false solutions — real progress comes from working on the right levers.