Team Culture Explained. Develop and Build a Strong Team Culture

September 17, 2021

Team culture in an organisation is the most important element in success.

And yet, the vast majority (about 70% according to Margaret Heffernan) of companies that embark on trying to change their culture fail. Despite us knowing that culture is our secret sauce for success, most of us have no idea how to create it or maintain it.

“Numbers are comforting - income, expenditure, productivity, engagement, staff turnover - and create an illusion of control. But when we’re confronted by spectacular success or failure, everyone from the CEO to the janitor points in the same direction: the culture. Beyond measure and sometimes apparently beyond comprehension, culture has become the secret sauce of organizational life: the thing that makes the difference but for which no one has the recipe.”

- Margaret Heffernan, Beyond Measure: The Big Impact of Small Changes

So, what is team culture?

The Oxford dictionary definition of culture is “the ideas, customs, and social behaviour of a particular people or society.” So for team culture in an organisation, we can say it is the ideas, customs, and social behaviour of a team within a company or an organisation. 

If you’re thinking that sounds very broad, you’re right. 

This article from the Havard Business Review gives us a little more to work with. It defines culture as

“... the tacit social order of an organization: It shapes attitudes and behaviors in wide-ranging and durable ways. Cultural norms define what is encouraged, discouraged, accepted, or rejected within a group. When properly aligned with personal values, drives, and needs, culture can unleash tremendous amounts of energy toward a shared purpose and foster an organization’s capacity to thrive.”

Again very broad, and herein lies the problem. 

What typically happens in companies is a group, normally led by HR, are tasked with coming up with the values for the organisation that will drive the culture. There are lots of meetings to review research and see what has worked in other organisations.

The intentions are genuine and the output is usually some lofty aspirations that on the surface make the company appear authentic, caring, ethical and a great place to work.

“Putting people first” and other catchphrases will appear painted on the wall or in the header of the staff bulletin. 

This is not creating culture.

As Margaret outlined earlier despite these lofty, authentic, caring, and ethical intentions, projects aimed at improving company culture fail 70% of the time.

It is totally unrealistic to believe that a whole organisation with a variety of different functions and priorities can focus on the same things.

Team culture should be the focus, not company culture.

Why is team culture important?

Culture in the workplace is a non-linear system. 

As we’ll see a little later, there are different types of culture in an organisation. Each team should have the autonomy to decide what is important for them to focus on to allow the team members to do their best work.

Think about it… a production team tasked with building ‘units’ will focus on precision, efficiency, minimising errors, maximising efficacy - compared to the sales team tasked with 'moving the units'; they will focus on narrative, storytelling, problem-solving, competitor analysis, pricing.

If the teams’ focus is different how could expect their cultures to be the same?

A teams culture is not just about what they do, it’s about how they do it and what they stand for.

Creating a team culture should be about capturing the purpose behind the work.

A great demonstration of this and the impact creating a positive culture can have is the New Zealand All Black’s road to the 2011 Rugby World Cup victory.

Since winning the inaugural tournament in1987, New Zealand failed to capture the Webb Ellis trophy for over 20 years only making it to the final on one occasion. Yet, as a rugby team, year after year they beat team after team, just not at the World Cup.

The All Blacks did not have a rugby problem. They had a culture problem. When it mattered they couldn’t produce the goods as a team.

Through the 2000s, the New Zealand management embarked on a detailed program to manage their culture and central narrative by attaching the players’ personal meaning to a higher purpose. As outlined in the fabulous book “Legacy” by James Kerr “It is the identity of the team that matters – not so much what the All Blacks do, but who they are, what they stand for, and why they exist.”

The result, of course, was back to back World Cup Final wins in 2011 and 2015.

Culture is important as a way of defining purpose.

How to build an effective team culture

Building a team culture is not about starting with a lofty goal that makes your company sound cool.

Equally, it is not about defining an outcome and working towards that goal.

Rather, it should start with providing purpose and meaning to the work that people are doing.

In 2011, the American Career Advisory Board ran the largest study of its kind, designed to understand the career aspirations of the millennial generation. The perception held by older managers was that money and status were the main drivers for this younger generation. 

What they found was the actual views of millennials themselves pointed to something far more crucial and interesting. 75% of the surveyed employees between the ages of 21 and 31 said that having a career with a sense of purpose and meaning was most important to them.

For people to generate their best performance they need to feel connected and engaged with purpose and meaning. This is true irrespective of the arena. This is not how just Google employees work or how the All Blacks play. It is how people, at their best, work and play.

How toxic workplace culture is harmful

Bottom line, a toxic and harmful workplace is bad for your health and bad for business.

In 2011 several Australian institutions published the results of a longitudinal study into “The psychosocial quality of work determines whether employment has benefits for mental health” and the results were stark.

The research found a linear relationship between adverse psychosocial job conditions and mental health. The mental health of the study candidates in the worst jobs - ones with high job demands, low decision latitude or control, job strain, a lack of social support at work, effort-reward imbalance and job insecurity - were considered worse than the mental health of those unemployed.

If the mental health of your people is deteriorating then expect performance to fall and costs relating to the loss of productivity and healthcare to rise. There is now a wall of evidence that proves this.

  • The WHO estimates mental health problems in the workplace costs the global economy $1 trillion annually 
  • Global Wellbeing Institute research shows that work-related injuries and illnesses, work-related stress, and employee disengagement is costing the global economy approximately 10-15% of GDP each year. 
  • The American Institute of Stress calculated that job stress carries a price tag for US industry estimated at over $300 billion annually as a result of accidents, absenteeism, employee turnover, diminished productivity among other issues.
  • The CIPD HR practices in Ireland 2019 survey showed 
  1. over half (54%) of respondents identified that stress is on the increase
  2. 44% believed that stress is the top factor leading to absenteeism 
  3. over 20% of organisations reporting an increase in absenteeism rate in the last 12 months

Even though we know the costs and incidences relating to absenteeism, mental health and stress are on the rise, companies are very slow to take action.

The workplace wellbeing industry is growing faster than the broader economy (~6% vs ~3%), the Global Wellness Institute estimates that only 10% of the global workforce have access to workplace wellness programs and services. Naturally, a high concentration of this coverage is the more mature markets of North America and Europe.

Unless organisations take serious action, the situation will get worse before it gets better.

Examples of great team culture

A just culture

Too often we equate a great place to work with the perks, treats and trinkets offered by the company.

Down through the years when you heard people talk about the Google offices, you were more likely to hear about the free food served all day in the restaurant or the beanbags in the meeting rooms. Rarely (until maybe recently) did you hear about Project Aristotle and psychological safety (more on this a little later).

Organisations are slowly finding out that building positive cultures within teams takes more than a ‘lunch & learn’ on wellbeing or morning yoga classes.

The aviation and medical industries are great examples of how things can be changed for the better through team culture. Both industries adopted what is known as a just culture.

Simply put, a just culture is the opposite of a blame culture. So, instead of asking ‘who did that?’ in a just culture, we ask ‘what went wrong?’

In a just culture, we believe that problems can be created by faulty processes or systems and not solely by negligent individuals. It is not a no-blame culture as people are accountable for their willful misconduct or gross negligence. But we look for greater context as to why the person or people did what they did that caused the problem.

A just culture helps create an environment where individuals feel free to report errors and help the organisation to learn from mistakes.

The aviation industry managed to turn around its appalling safety record by implementing a just culture in the cockpits of commercial planes. A landmark safety report issued in 1979 recommended assertiveness training for all crew members. The authorities believed that crew members, even in the direst situations, were unwilling to speak up against their captains for fear of the backlash if they were wrong.

This is exactly what happened on United Airlines 173 that crashed in 1978. While the crew were grappling to understand a problem with the landing gear they failed to notice they were running out of fuel. Except three of the flight crew did realise they were low on fuel. None of them was the captain and no one spoke up loud enough to make him aware of the situation.

You can see the impact the National Transportation Safety Board report had after the United Airlines 173 crash in 1979. The report was written by psychologist Alan Diehl and investigator, Dennis Grossi. On page 13 they recommended sharing the findings of the report with all other air carrier operations inspectors and urged them to emphasise the “merits of participative management for captains and assertiveness training for the other cockpit crew members.”

Even though the number of passengers being carried has increased 6x since the United Airlines 173 crash, the number of crashes and fatalities has fallen thanks to the implementation of a just culture in the cockpit.

Psychological Safety

Professor Amy Edmondson from Harvard Business School did a similar exercise in a US manufacturing company.

In her 1999 report “Psychological Safety and Learning Behavior in Work Teams” Edmondson doubled down on the idea of just cultures by introducing the idea of psychological safety.

“The term (psychological safety) is meant to suggest... a sense of confidence that the team will not embarrass, reject, or punish someone for speaking up. This confidence stems from mutual respect and trust among team members.”

In 2004 Edmondson analysed two hospitals and noted that teams that reported the fewest errors were not necessarily the best performing. If you also factored in lawsuits, patient recovery and insurance claims, teams with the fewest errors didn’t do so well. 

Teams with the fewest reported errors typically were mired in a high-blame team culture. Though the reported number of errors were low, lawsuits, patient recovery and insurance claims suggested otherwise. 

Teams that exhibited traits of a just culture and psychological safety had a higher error count. But openness allowed team members to learn from mistakes resulting in lower numbers of lawsuits, insurance claims, and better patient recovery over time.

How to build a team culture?

So… How do you create a team culture that is a just culture and promotes psychological safety? This might seem harder than it is. 

Google asked itself a similar question in 2012 - what are the common denominators in high-performing teams. We immediately think of technical experience, years on the job, qualifications, seniority, awards and accreditations. However, none of these is a real dial mover.

Project Aristotle, as it was known, studied hundreds of Google’s teams to try and work why some succeeded while others failed. They analysed 180 teams across the organisation and gathered some of the company’s best statisticians, organisational psychologists, sociologists and engineers to pour over the data.

The findings pointed towards three common denominators in high-performing teams.

  1. Equality  - everybody on the team had equal opportunities and time to talk
  2. Contribution  - when people talked they felt the group was listening and they were heard
  3. Empathy - the better teams had a high average social sensitivity - being able to recognise how others felt based on their tone of voice, their expressions and other nonverbal cues.

The researchers also found that all of their conclusions were backed by previous academic research.

These three common denominators extended beyond work discussions. High-performing teams share their personal lives and experiences in the work setting. And guess what, it makes the whole group better, closer and more ready to do great work.

Now, if you are a manager of people or a leader at your organisation, think about how many times in your workweek you have a group of people together? 

Do they all get a chance to speak?

How are good ideas handled?

More importantly, how are the bad or unpopular ideas and suggestions handled?

And, how often does the group share personal stories about themselves?

If leaders focus on these for some time, there is a weight of evidence to suggest the team performance will improve.

How do you improve team culture?

If we think back to what we said at the top of this article, team culture should be the focus, not company culture.

It is totally unrealistic to believe that a whole organisation with a variety of different functions and priorities can focus on the same things.

Within each team environment, managers and leaders should try the following.

  1. At least once a month, create a group or meeting will the sole purpose of focusing on Equality, Contribution, and Empathy that worked in Google and other organisations.
  2. For all meetings test different structures, meeting cadences, and methods of running meetings to allow Equality, Contribution, and Empathy to come out.
  3. Compare what works and doesn’t work for your team with what other teams are doing AND…
  4. Share with other teams what you have tried and tested.
  5. Iterate on your processes and adopt new methods and ideas to keep things fresh making sure that Equality, Contribution, and Empathy are always to the fore in group settings.

Part of our PepTalk program includes a monthly TeamTalk that gives managers and leaders guidance on a once a month meeting that will focus on non-business as usual matters.

It provides the perfect opportunity to do #1 from the list above. This video gives an outline of how you could run a TeamTalk.

While the focus on team culture will improve teamwork, it is important that all teams come together and that the whole organisation benefits from the just culture and psychological safety. 

If teams begin to operate in vacuums, silos will be built up and reinforced.

The key to ensuring the organisational benefit is to have the whole organisation from the C-suite to individual team members all involved in creating the just culture.

In Beyond Measure, Margaret Heffernan sums up the need for organisational wide involvement perfectly.

“Culture has become the alibi, the scapegoat, for everything that is wrong. But who can fix it? Only everyone.”

Types of team culture

There are many different types of team cultures. 

Whatever route you go down it is important that team culture are aligned to each teams' purpose and not driven by business outcomes.

For example, the Harvard Business Review outlined work by a team of researchers that came up with eight types of company cultures that it measures across 2 axes

  • how people interact and
  • how people respond to change

A good place to start would be to review where your current culture is and consider what you need to change to create a more desirable team culture. 

The main attributes of each culture are (% of companies in the study ranked this as an organisational priority)

  1. (63%) Caring - big on relationships, collaboration and trust. 
  2. (9%) Purpose - idealists, tolerant, compassionate and doing good for the long-term future of the world.
  3. (7%) Learning  - adventure, curious, inventive and open-minded where explore alternatives. 
  4. (2%) Enjoyment - playfulness and stimulation; leaders emphasize spontaneity and a sense of humour.
  5. (89%) Results - achievement and goal accomplishment.
  6. (4%) Authority - strength, decisiveness, confidence and dominance.
  7. (8%) Safety - predictable, planning, caution, and preparedness. 
  8. (15%) Order - respect, structure, procedures and time-honoured customs.

By auditing your team you can choose the cultures based on whether your people are more independent or interdependent when they work. And whether they welcome stability or flexibility concerning change. This will allow you to understand what team culture is most important to uphold but also which ones are likely to be sustained.

How to create a team culture with a remote team

Naturally, this is something we have all had to grapple with since early 2020.

We’ve spent a lot of time thinking about how to navigate this and have some resources available.

Making it happen - The 1% Rule

I think the main reason why 70% of culture change projects fail is because of unreasonable expectations. Let’s face it, that’s why most projects fail. 

Team culture is like running a marathon - it won’t happen overnight. It will take time and gradual progress to reach a point where the idea becomes achievable.

In the same way, you wouldn’t do a handful of training runs and expect to be able to complete 42 kilometres, a few people and a few more meetings won’t create a team culture that works.

It will be hard and it is not a matter of if the resistance will come, it’s when.

And this is where the magic will happen. In a just culture brimming with psychological safety, your people will be able to stand up and tell you where the problem is and as a group, you’ll come up with lots of ways to fix it.

And over time things will get better… and you’ll have a team culture everyone is proud of.

Thanks for reading

Gus Ryan
Head of Marketing. Runner of kms, watcher of rugby while drinking a beer.
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