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How Companies Like Patagonia Align Culture With Policies & Procedures


When it comes to building a strong company culture, we tend to hear a lot about the big picture: how to make work more meaningful, what a diverse culture looks like, when to prioritize culture over compensation, and the like. All of this is important, but…

When was the last time you took a good, hard look at your company’s policies and procedures?

If it’s been awhile, you’re not alone. It’s not uncommon for organizations to create formal processes separate from the more ambiguous concept of culture.

However, the two should go hand in hand. Why? Because your organization’s policies are manifestations of your culture. And until they align with your vision and mission, it will be very difficult to create the culture you want. Something as seemingly harmless as a misplaced dress code or overly strict PTO policy can, in fact, be a big hindrance to achieving your cultural ideals.

Think of it this way: A mission statement that focuses on the value of a nimble workplace and candid communications is going to be rendered useless the moment new hires are handed a 75-page employee handbook filled with legalese.

Bottom line: It’s incredibly important to ensure your internal structures are reflective of your ideal culture.

So, how do you achieve this? As a general rule, the more a company focuses on employee engagement when developing policies, the more its culture will be strengthened. To see what I mean, let’s take a look at some inspiring examples to see what successful companies are doing in this area — and which employee engagement drivers are at play.

Patagonia’s culture of purpose, shared values, and authenticity

Patagonia’s stated values are as lofty as they are ambitious. Build the best product. Use business to protect nature. Don’t be bound by convention. Implement solutions to the environmental crisis.

With such grandiose language, you’d think it would be difficult for an outdoor clothing company to live out these ideals in the day-to-day. Yet Patagonia’s reason for being has stood the test of time.

Now that it’s been close to 50 years since Patagonia first took a formalized stand on environmental activism, leaders decided to get even more aggressive with policies and procedures. The company recently rolled out a new mission statement with a rather idealistic headline:

“We’re in business to save our home planet.”

Sure, it sounds great on paper. But there’s no way a clothing company can align such an ambitious statement with day-to-day processes, right?

Oh, but it can. And Patagonia does. Thanks, in large part, to a focus on employee engagement.

First and foremost, Patagonia employees are driven by purpose: They understand why the business exists beyond making a profit and have a clear vision they can connect to. Because the company has always been vocal about its underlying mission to protect the planet, employees are able to find true passion and purpose at work.

This, in turn, provides a path to shared values: Patagonia’s people are united by common work attitudes and principles, due in part to a hiring process that ensures alignment with the company mission. Founder Yvon Chouinard has even specified the type of candidates HR should seek: “Whenever we have a job opening, all things being equal, hire the person who’s committed to saving the planet no matter what the job is.”

It’s all manifested in uniquely desirable benefits such as paid time off: While many companies tout PTO as part of benefits packages, more than half of workers end each year with unused vacation days. Not so at Patagonia. The company has designed its policies to ensure people feel comfortable taking time to refresh and rejuvenate.

Workers set their own hours, headquarters are locked on weekends, and people surf during lunch. Patagonia has long encouraged time away with company-sponsored climbing trips and paid sabbaticals to work on environmental projects. To think outside the box, the theory goes, you need to get outside the cubicle.

Semco Partner’s culture of feedback and autonomy

Brazil-based Semco Partners is marked today by a turnover rate of 2% — a remarkable achievement, considering the average across industries is 18%. But it wasn’t always this way.

Before its pivotal turning point in the 1980s, Semco was still largely defined by the same bureaucratic style of policies and procedures that defined many other businesses at the time. Managers ruled, subordinates obeyed, and everyone counted the minutes until it was time for lunch or time to leave. Then owner Ricardo Semler — today known for his bestselling books and guest lectures at Harvard and MIT — decided to give company procedures a complete overhaul.

First and foremost, Semco operates with a focus on employee feedback: Leadership actively seeks input on everything from where its people should work to what they should be paid. Management is regularly and anonymously evaluated, and feedback on fellow team members is always welcomed. The approach has proved so successful that it became the basis for a training program through the Semco Style Institute, where leaders learn to “organize wisely around humans instead of smartly around structures and procedures.”

This, in turn, opens the door to autonomy: Semco employees are trusted to use their expertise to make decisions about how best to do their jobs. There are no organizational charts, no five-year plans, and no values statement, much less a vacation policy. Subordinates hire and review their supervisors, and employees initiate moves into and out of businesses. Rather than dictating from on high, freedom is given freely and conditions are created so people can find their own best solutions.

When aligning policies with culture leads to profit

Autonomy, paid time off, passion, and purpose… this all sounds idealistic, but can such cultures survive and thrive long-term? Based on the latest data from Patagonia and Semco, the answer is a resounding “yes.”

A top contender for Inc. Magazine’s Company of the Year, Patagonia’s revenue and profits have quadrupled in recent years, with sales hovering around $1 billion.

Turning Semco’s policies and procedures on their head, meanwhile, resulted in massive growth from 90 to 3,000 workers and from $4 million to $212 million in annual revenue.

Admittedly, these examples are some of the most intense. And they certainly didn’t happen overnight. We’re not trying to inspire you to rewrite your company mission to change the world, or to undertake a complete overhaul of your business practices employee manual.

It is important to note, however, that these companies and others like them have been wildly successful because they take the time to align statements with action. We believe virtually any business can do the same. When a company turns its focus to the psychological conditions and drivers of employee engagement, it becomes much easier for people to be excited about propelling the business forward.

No, it’s not an easy undertaking. And it won’t happen overnight. But by implementing a series of small changes starting today, you can bring about big transformations for your culture.

Looking for more insights you can use? You’ll find plenty in our Employee Engagement Trends report. Download your free copy to learn about the underlying elements needed to align policies and procedures with culture.

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