Market Culture: What HR Practitioners Need to Know

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Market Culture: What HR Practitioners Need to Know

Being customer-focused and result-oriented as an organization is undoubtedly a recipe for business success. Those are also some of the key characteristics of the market culture. Let’s dive into all you need to know about the market culture and how to promote aspects of the market culture within your organization to become a more competitive and profitable business.

Contents
What is market culture?
Key characteristics of market culture
Advantages of market culture
Disadvantages of market culture
How HR can help promote aspects of market culture

What is market culture?

Market culture has one goal: to have high-profit margins and outperform the competition. Therefore, it is results-oriented with a strong external focus to satisfy the customers. This culture is frequently a competitive environment, even among colleagues, and attracts talent who want to “be the best.” In a market culture, managers and leadership are inspiring yet demanding and expect their staff to perform excellently in this high-pressure environment.

This kind of culture is most commonly found in large businesses across different industries. Examples include Amazon under the leadership of Jeff Bezos and Apple under the watchful eye of Steve Jobs and later Tim Cook, where there is a persistent demand to have new or improved products on the market. Industries where market culture is common range from big tech, and aerospace, to media and entertainment. 

While many businesses turn to this type of culture to ensure the organization’s longevity and profitability, these companies place less emphasis on the employee experience or satisfaction.

Market culture as a type of organizational culture

The Competing Values Framework is the best-known organizational culture classification. It identifies four types of organizational culture:

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  • Adhocracy culture – Create/Do things first
  • Clan culture – Collaborate/Do things together
  • Hierarchy culture – Control/Do things right
  • Market culture – Compete/Do things fast
Market Culture

Every business has its own unique mix of these four culture types, with one more prevalent one. And sometimes, in larger organizations, there may be more than one culture present. This is what a culture mix at a company with prevailing market culture could look like:

Prevalent Organizational Culture Example

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You can also think of your culture as the personality of your business. It creates shared beliefs and behaviors that define how your staff interact and make decisions. It also enables the company to achieve its strategic objectives and attract the right talent. As a result, your culture is essential to your company’s success.

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Key characteristics of market culture

  • Competitiveness – Market culture emphasizes the competitiveness between the organization and its competitors and between employees. Internally, overcompetitiveness can cause an issue because staff cannot collaborate well. Many consulting companies and law firms are renowned for this kind of environment.

    For example, former CEO Jack Welch at General Electric would ask managers to rank their employees from best to worst, and then he fired the bottom 10 percent. Welch believed that not only this would help the company by only keeping top performers, but it was also appropriate for the fired individuals because it took them out of an environment they were failing in. 
  • Results orientation – Market culture heavily focuses on performance, results, and achievements. Success is defined by profit and market penetration. One company that is very well known for being results-focused is Amazon. According to a book written by two Amazon employees called Working Backwards, Amazon uses a process improvement method called DMAIC which stands for Define, Measure, Analyze, Improve, and Control. The team then creates a Metric Owner that will look at the results daily to see what can be improved. 
  • Customer focus – Customers are at the center of how a company with a prevalent market culture makes decisions. This includes products, in-store experience, online experience, and customer service. It involves a lot of customer research but is hugely important to the company’s success. 

    Let’s take Amazon again as an example. Amazon’s current mission statement is, “To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.”
  • Getting things done – Finishing the work is very important in the market culture. In this culture, staying late or working outside of working hours to get things done is often celebrated and seen as required to achieve business goals.

Advantages of market culture

Productivity and profitabilityThe focus on performance, results, and competitiveness helps the employees become more productive and the organization more profitable. Often, teams in this type of corporate culture meet their targets and exceed expectations. 
Continuous improvementDue to the intense focus on the customer, market company culture compels organizations to continuously improve their products and services. For example, think about the various ways the iPhone was redesigned inside and out and the massive following Apple received from this improvement mindset.
Ambitious employeesDriven employees who thrive in the market culture are also performance-oriented and productive, which benefits the bottom line. This culture unites teams to pursue big wins, which can be a rewarding environment for employees.

Disadvantages of market culture

Toxic work environmentMarket company culture can potentially create a toxic working environment. It can lead to unhealthy competition bordering on obsession, knowledge-hiding, working long hours, etc. Also known as a cut-throat environment, only a select few team members will be able to climb to the top of the corporate ladder, and the rest will burn out. Take a look at this article in the BBC that discusses the impact such competitive environments have on employees. 
Employee stress and burnoutSuch an unhealthy environment leads to employees being stressed and eventually having a burnout because of the pressure being put on them. Additionally, employee turnover can cost an organization a lot of money
CostsMaintaining a market culture with a solid external orientation is not cheap. You need to invest a lot of money into market and customer research and constant product iterations. Additionally, it is increasingly important to invest in technological infrastructure to collect, analyze and use customer data.

How HR can help promote aspects of market culture

While the market culture certainly has its challenges, fostering certain aspects of it such as healthy competition and strong customer orientation can help your organization serve its customers better and achieve higher profits.

Here are some things HR can do to promote elements of the market culture within your business:

Adjust your compensation strategy

In this type of culture, it’s important to have a compensation strategy that focuses on rewarding people based on their performance and results. So, for example, you can reward your top performers with larger salaries, salary increases, and bonuses based on results. You can also offer prestigious learning & development opportunities to top performers, like paying for their MBA.

This kind of compensation will also attract the right candidates, who tend to be more competitive and base success on monetary incentives. 

Highlight results and achievements

Work on an employee recognition program based on achieving results and hitting the targets. The first thing to do is find a target framework such as OKRs (Objectives and key results) or KPIs (key performance indicators) to track how your team and employees are doing to reach their goals. Then implement a recognition program.

It’s not just as easy as using a recognition tool and hoping for the best. Businesses need to tailor their recognition programs to their unique work environment to ensure it delivers the desired result.

Foster customer orientation

According to HubSpot Research, “70% of companies with growing revenue say customer success is ‘very important.’ Less than half of companies with stagnant or declining revenue said customer success was ‘very important.'” This is why customer orientation is vital to the market culture.

Provide employees across different departments with ample opportunities to understand the needs of customers and serve them better. For example, this could be training on product knowledge, working with customer feedback, showing empathy, etc. You can then your organization can create a system to reward employees for their exceptional customer-focused behavior.

Hire driven people

You need people who will help advance the company’s productivity and profitability. Make this clear in your job postings and candidate communication. Set selection criteria that help you assess your candidates based on relevant characteristics, such as how goal- and results-oriented they are.

Ask the right interview questions. Some examples of interview questions are as follows: 

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  • What is your most meaningful achievement? 
  • How do you drive results? 
  • Tell me about a time you set challenging goals for yourself. What did you do to achieve them? Could you walk me through your process?
  • What is the most complex or difficult goal you’ve set for your team, and how did you pursue this goal?
  • Describe a time when you went above and beyond the minimum requirements of your goal. What were the results?

Develop strong leaders

Your leaders should inspire your employees to perform their best. They should be ambitious. The fitting leadership style for a market culture is transformational and servant to be able to motivate employees and be a role model. Identify future leaders and create leadership development plans for them.

Provide leadership coaching opportunities to current leaders to ensure they can motivate and effectively lead their workforce.

To sum up

Promoting some aspects of the market culture within your organization can help your employees and your organization perform better and achieve a larger market share. However, you need to make sure to find the right balance between focusing on performance and achievements and building a healthy, supportive organizational culture.

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