The first post in a series based on the National Center for the Middle Market’s in-depth research report, High-Performance Culture: How Middle Market Executives View & Harness the Power of Culture, this article introduces the seven primary culture types found in middle market companies.

Culture is a notoriously squishy concept. It’s not always easy to define or measure, and it’s often viewed as more of a vibe as opposed to a tangible aspect of a business.

Still, culture clearly matters to middle market executives. In our latest research, we found that 73% of leaders rank culture as one of the top business priorities, and that percentage rises to 86% among the fastest-growing middle market firms. We also found that a solid majority of companies are relatively satisfied with the current culture in place in their organizations. Satisfaction, however, shifts depending on the type of culture a company displays.

Culture Comes in 7 Flavors

Nearly all (96%) of the executives we interviewed identified with one of seven different culture types:

  • Customer-centric: Nearly a quarter (22%) of middle market leaders align their organizations with this camp, making it the most popular type of culture in the middle market. These organizations define themselves by emphasizing a customer-first approach to business. They are concentrated in the healthcare and manufacturing segments and they tend to be somewhat more established and larger than companies with other types of cultures.
  • Innovative and creative: These companies encourage finding new ways to create value through new channels. They are pacesetters and can come from any industry. They tend to be young and they grow quickly, likely as a result of their dedication to continually introducing transformational products and services.
  • Great-place-to-work: Businesses in this category tend to be some of the youngest in the bunch. They are also smaller. Great-place-to-work businesses are most prevalent in the technology and business services sectors. They foster an employee-centric mentality and believe people are key to their competitive edge, so they work hard to keep their employees engaged.
  • Continuous improvement: Companies with a continuous improvement culture work to continually get better at what they do best through a serious commitment to excellence and sustained energy. They are common in the services, manufacturing, and construction industries.
  • Technically-oriented: These businesses are most often found in manufacturing. What defines their culture is a focus on the quality of the products and services they offer, which they achieve through engineering acumen of all kinds. These companies are some of the fastest growing in the middle market.
  • Highly-efficient: Companies with this type of culture are dedicated to eliminating inefficiencies and becoming continuously leaner. They don’t grow as fast as innovative, great-place-to-work, continuous improvement, and technically-oriented companies; but they still grow at a decent clip. They are the most likely to be family-owned and to have private equity investment.
  • Risk-averse: Companies with this type of culture are focused on minimizing risk and avoiding situations that appear to be risky. Note that risk aversion is not the same thing as risk management. Risk-averse companies often fail to understand their real risks and opportunities, which can stifle initiative as a result of their tendency to hold back and always play it safe.

Those with an innovative/creative or great-place-to-work culture are most satisfied.

In general, most middle market leaders are satisfied with their company’s culture, and many believe that culture is strong with a positive impact on company performance. But those perceptions vary significantly based on the type of culture found within an organization.

Executives who believe their culture encourages innovation or is oriented around creating a great work environment are most satisfied and most likely to believe culture contributes positively to performance. On the other end of the spectrum, executives who describe their corporate culture as risk-averse are the least satisfied; indeed, 25% of these leaders feel their culture holds them back or has a negative impact on performance.

Learn more about culture’s impact on business metrics.

To learn more about the seven culture types and how they stack up when it comes to performance metrics such as revenue growth and customer and employee acquisition and retention, download our latest research report, High-Performance Culture: How Middle Market Executives View & Harness the Power of Culture.

Next in this series
Post 2: Culture and Performance: What's the Connection?