Culture by Design: How Leading Organizations Shape Their Identity

TL;DR

Most culture initiatives fail because leaders treat culture as a marketing exercise rather than a design discipline. Effective organizational culture isn't declared—it's engineered through systematic alignment of four layers: structural (how authority flows), process (how work flows), decision (who decides what), and interaction (how information flows). The organizations winning the talent war understand that culture emerges from the friction between what people are asked to do and what systems reward them for doing. Instead of trust falls and values posters, they design cultures around three fundamental conditions—dignity, creativity, and human connection—while building adaptive capabilities that allow their culture to evolve consciously as conditions change.

The executive team gathered in the gleaming conference room, armed with Post-it notes and markers, ready to define their company culture. Three hours later, they emerged with a list of aspirational values that would soon be laminated onto desk placards...and forgotten by Friday. Sound familiar?

This ritual of culture creation—treating organizational culture as a marketing exercise rather than a design discipline—explains why most culture initiatives fail to move beyond wall art. The organizations that truly harness culture as a competitive advantage understand something different: culture isn't what you declare; it's what you design.

The Culture-Structure Paradox

Seasoned organizational design consultant and the founder of Brass Tacks Consulting, Ron Schwartz, whose work several decades ago at consulting firm Human Synergistics introduced him to the intricate relationship between leadership and culture, discovered something that challenges conventional thinking about organizational development:

"It was a cultural shift that was required to get people to focus on a holistic view of success rather than purely economic or financial, and that was what really opened my mind and started me thinking about what is possible there with the human side? The more you dove into it, the more it came down to people, it was cultural and it was there that it all exploded for me." (The Org Design Podcast, Apr 10, 2024 Episode.)

This "explosion" of understanding reveals the first insight about culture design: it cannot be separated from the technical systems that govern how work gets done. Culture emerges from the intersection of human dynamics and organizational mechanics—a paradox that most leaders miss entirely.

Gary Cohen, who, as Principal Consultant and Owner of Practical Agility LLC specializes in agile transformations, articulates this connection with surgical precision:

"He (a former leader) was very big about how you cultivate culture and how you incentivize people and the importance of leadership, and so that was my entree into learning some of the things that are important related to how organizations function. When you're trying to change ways of working you need to understand how incentive structures drive certain behavior, and if that's perpendicular to what you're trying to achieve in the new ways of working, you'll see the friction and the resistance there." (The Org Design Podcast, Aug 1, 2024 Episode.)

The paradox lies in this: leaders often try to change culture directly through values statements and training programs, when culture actually emerges (or diverges!) from the daily friction between what people are asked to do and what systems reward them for doing. Change the systems, and culture follows. Ignore the systems, and culture statements become corporate fiction.

The Architecture of Authentic Culture

Founder of Evolve Leadership Group, Glenn Bergsma's experience helping organizations align structure with purpose reveals a crucial distinction between surface-level culture work and deep cultural architecture:

"So in this particular situation I was brought in to deal with a cultural issue. There was a toxic culture that was developing within the organization. And they were like, "Glenn, we want you to do kumbaya sessions, we want trust falls, we want all this stuff..." And what was interesting was at the heart of this toxic culture was actually their org design, their roles and responsibilities, people scrambling over jobs, multiple people doing doing the same thing, fighting for the resources to get that done. There wasn't clarity of structure, there wasn't clarity of accountability, there wasn't clarity of ownership of tasks that need to get done." (The Org Design Podcast, Sep 18, 2023 Episode.)

This integration of culture development with organizational design represents a more sophisticated approach—what I call "Cultural Architecture." Unlike traditional culture initiatives that focus on aspirational statements, cultural architecture designs the organizational environment to naturally produce desired behaviors and mindsets.

Cultural architecture operates through four interconnected layers:

• Structural Culture emerges from how authority, responsibility, and accountability are distributed. For example, hierarchical structures cultivate different cultural norms than networked ones, regardless of stated values.
• Process Culture develops from how work flows through the organization. For example, bureaucratic processes breed compliance cultures; streamlined processes enable innovation cultures.
• Decision Culture forms around how choices are made and who participates in making them. For example, centralized decision-making creates approval-seeking cultures; distributed decision rights foster ownership cultures.
• Interaction Culture arises from how information flows and relationships form across organizational boundaries. For example, siloed communication patterns produce territorial cultures; open information architectures enable collaborative cultures.

The power of this framework lies in its systematic approach. Rather than hoping culture will emerge from good intentions, leaders can deliberately design each layer to support their desired cultural outcomes.

The Measurement-Authenticity Tension

Carlos Valdes-Dapena's work in org redesign and culture change projects at Mars Incorporated over 18 years illuminates a critical tension in culture work:

"I found a lot of my career has been helping the organization implement its intentions in ways that work versus implementing what somebody from the outside told them they needed to do differently So the kind of interesting role of reinterpreting the suggestions from highly paid consultants into things that would work within that culture and that system at Mars Incorporated." (The Org Design Podcast, May 26, 2025 Episode.)

This "reinterpretation" challenge points to a deeper issue: the tension between measurement-driven approaches to success and authentic cultural development. While measurement provides necessary feedback, an overly mechanistic approach can undermine the very authenticity that makes culture powerful.

Schwartz addresses this tension directly:

"One of the big learnings that we've had is that as practitioners where often too reliant on data, we're too reliant on measurement, and there's a lot that can be said for simply observing. So actually sitting in (the culture) and spending some time observing, really understanding the context of what's happening there."

The insight here is important: effective culture design requires both analytical rigor and deep contextual human understanding. Data tells you what's happening; only human insight tells you why it's happening and what it means.

This suggests a balanced approach to culture measurement—what I term "Contextual Metrics." These metrics track behavioral patterns while preserving space for the qualitative interpretation that gives those patterns meaning. For example, measuring collaboration frequency means little without understanding the quality and purpose of those collaborative interactions.

The Entrepreneurial Mindset as Cultural Foundation

Seasoned HR executive, Pallavi Srivastava, introduces a crucial concept that reframes how we think about cultural adaptability:

"Rarely, do we think about org design from the point of view of, 'Is the culture right?' Part of the thing that I would really like leaders to do, is to build that entrepreneurial mindset within themselves, which is how quickly can they read the environment that they have." (The Org Design Podcast, Jan 30, 2025 Episode.)

This "entrepreneurial mindset" represents a meta-cultural capability—a culture's capacity to sense and adapt to changing conditions. Organizations with this capability don't just have strong cultures; they have adaptive cultures that can evolve while maintaining their core identity.

In the best leaders I've worked with, that entrepreneurial mindset operates through three cultural competencies:

• Environmental Sensing: The culture prioritizes external awareness and environmental scanning, encouraging people at all levels to notice and report changes in their specific teams or domains.
• Experimental Orientation: The culture treats new approaches as experiments rather than commitments, reducing the risk of trying new things and increasing the rate of learning.
• Adaptive Capacity: The culture has mechanisms for translating insights into action, enabling rapid response to environmental changes without losing organizational coherence.

Organizations that develop these competencies create what might be called "Meta-Adaptive Cultures"—cultures that can consciously evolve their own cultural patterns as conditions change.

Beyond Perks: The Soul of Organizational Culture

The conversation around organizational culture often gets trapped in superficial discussions about perks and amenities. Distinguished business transformation consultant, author, and keynote speaker Jardena London's perspective cuts through this noise to identify what truly matters:

"There's three conditions for soul in an organization: dignity, creativity, and human connection." (The Org Design Podcast, Feb 13 2025 Episode.)

This framework—dignity, creativity, and human connection—provides a somewhat deeper foundation for culture design than typical approaches focused on fun activities or flexible benefits. These three conditions address fundamental human needs that, when met, create the psychological safety and engagement that enables high performance.

• Dignity in organizational culture means people feel respected for their contributions and treated as whole human beings rather than resources to be optimized. This shows up in how decisions are communicated, how feedback is given, and how individual differences are valued.
• Creativity refers not just to innovation in products or services, but to the freedom people have to approach their work with imagination and personal expression. This includes autonomy in how tasks are accomplished and opportunities to contribute unique perspectives.
• Human Connection encompasses the relationships and sense of belonging that make work meaningful. This includes both professional relationships that enable effective collaboration and personal connections that create community.

Organizations that design their culture around these three conditions create environments where people naturally give their best effort—not because they're compelled to, but because they want to.

The Cultural Design Imperative

The war for talent isn't really about compensation packages or office perks—it's about creating environments where people genuinely want to contribute their best work. Organizations that understand this are already treating culture as a design discipline rather than leaving it to chance.

Leaders face a straightforward choice: design your culture deliberately through aligned systems and structures, or accept whatever culture emerges from the inevitable friction between strategy and operations. The organizations choosing deliberate design aren't just building better workplaces—they're creating sustainable competitive advantages that competitors can observe but struggle to replicate.

Culture, it turns out, might be the last truly defensible moat in business. But only if you build it with the same rigor you'd apply to any other critical organizational system.

About the author: Clayton Moulynox is the Managing Director of growth, leadership and culture consultancy MxGrowth, and performs fractional roles at Functionly. He's held leadership roles in tech companies across Australia and US, ranging from managed services businesses to a US$1B SaaS startup, where he was the Head of Culture.

Listen to The Org Design Podcast on Spotify and Apple.