The definitive guide to clan culture for HR professionals

Advantages of clan culture

While building company culture is never easy, it can be worth trying to build clan culture for several reasons.

• Increased communication: Like adhocracy cultures, clan cultures promote a kind of horizontal structure where all employees are valued equally and invited to contribute in all facets of the company. This fosters an inclusive, collaborative environment that makes employees feel empowered to give constructive feedback and take calculated risks they might not at other companies.
• Enhanced morale and job satisfaction: Clan culture in business is thought to significantly increase employee satisfaction. It makes sense when you consider that the point is to create a family atmosphere, where everybody is invested in the same goals and feels excited and motivated to collaborate with peers.
• Foster innovation: In a clan culture, employees are encouraged to openly share ideas with each other and management, creating a more innovative environment where everyone feels like they can provide unusual, innovative solutions to a variety of problems.
• Higher employee retention rates: It would be hard to leave your family, right? Because it fosters a sense of belonging and loyalty, clan culture is thought to lead to higher employee retention rates. Keeping skilled employees in jobs they excel at is one of the ways in which talent management can impact company success.

A strong clan culture is all about inspiring loyalty and developing employees. Leaders want happy, engaged employees who aren’t at risk of burning out and who are excited to come to work each day, learn new skills, and find new ways to contribute to the company’s mission. It’s not easy getting people to buy in to that extent, but when it works, it can be hugely beneficial.

Now that we better understand why some employers tend to use this strategy in their office environments, let’s see if there are any potential drawbacks to it.

Disadvantages of clan culture

Like any culture, there are still disadvantages to clan culture in business. Some of the most prominent include:

• Lack of clear structure: Unlike hierarchy cultures that have clear supervisors and direct reports, clan cultures often have more fluid arrangements in which it’s not exactly clear who reports to whom. The open, egalitarian culture can lead to some confusion when it’s time to be decisive and agile.
• Risk of groupthink: Clan culture often tends towards consensus-based decision-making, which has inherent risks. It just takes one particularly charismatic individual with a bad idea to convince a few people, who convince a few people, who convince a few people. Suddenly, everybody’s rallying behind an idea, and even if a few employees realize it’s not a good one, it can be hard to stop the flow when everybody else is already on board.
• Potential for slow decision-making: The lack of clear structure and consensus-based decision-making can lead to slow processes. In challenging times, that can have some less-than-ideal outcomes.

You’ve probably experienced some very frustrating moments with your family before. Everybody has ideas; nobody is able to make a decision; nobody wants to make anybody else feel bad about their ideas. Things can grind to a halt. That’s exactly the risk with a clan culture, so it’s useful to have at least a little bit of strong leadership.

So now that we have a feel for the potential pros and cons of clan culture, next let’s see what the key elements of this methodology look like once it’s up and running in a work environment.

Characteristics of clan culture and strategies for cultivating them

The clan culture definition is fairly straightforward, but it’s easier to review clan culture examples and characteristics to really get a feel for what it looks like. We break down some of the most common characteristics here.

Collaboration and teamwork

Collaboration is at the center of any clan culture. Between a flexible, more horizontal structure and a strong emphasis on making everybody feel like a contributor, clan cultures feature a lot of interdepartmental cooperation. This can break down silos and increase efficiency as knowledge sharing and process improvement across all teams becomes more standardized. And, perhaps more importantly, every individual feels like they’re a valued part of the team.

Open communication

Innovation and risk-taking are always encouraged in clan cultures. Everyone from entry-level employees to senior leaders are encouraged to cooperate and provide feedback to one another. There’s a strong sense that honesty is the best policy, even when feedback may be a little hard to hear.

In clan cultures, leaders are expected to be transparent and straightforward with employees about business decisions, the state of the business, and goals and expectations. As such, performance reviews are very important in clan cultures, since they’re honest assessments to help employees improve and do their best work.

Employee empowerment

While clan cultures empower employees by making them feel like part of a family and encouraging them to speak up and share ideas, there’s also a strong focus on employee well-being. Beyond fostering a family-like environment, companies that adopt clan culture also show their care for their employees’ lives with their actions.

Providing competitive compensation, perks like parental leave and unlimited paid time off (PTO), and investing in employees through professional development are all examples of a clan culture living by its values. Some companies may even offer a paid sabbatical for employees who have been with the company for a long time.

Mentorship and development

Clan cultures may not always have strict hierarchies, but some people will still be more experienced or have skills that others don’t. In a clan culture, everybody is encouraged to share knowledge and experience with one another so that the whole team may grow. Whether that’s having a product engineer teach Python classes or pairing new employees with mentors, there are many ways that organizations integrate mentorship and development into the culture.

One of the best ways to inspire employee loyalty is to show that you believe in them, and providing allowances for online learning or paying for credential training is a great way to do that.

Flexible structure

Clan cultures don’t have the same rigid hierarchical structure that you see at most companies. Instead, employees are more horizontally aligned, chosen at different times to lead different projects. Everybody should gain experience both as a project leader and a project contributor so that nobody feels like they’re stuck behind somebody else on the corporate ladder. Everybody is climbing together.