Trickle-down economics—also known as supply-side economics or Keynesianism—was first popularized to describe U.S. president Ronald Reagan’s 1981 tax cuts and is defined by Investopedia as “the theory that tax breaks and benefits for corporations and the wealthy will trickle down and eventually benefit everyone”.
While some people still believe that wealth has the ability to trickle down in such a way, the concept of trickle-down economics was generally not widely accepted. The same can be said about the idea of trickle-down company culture.
Trickle-down company culture describes the model that many organizations try to implement when creating their company culture. There’s an expectation that if culture exists at the top—with executives and other leadership—then it should naturally trickle down to the rest of the company.
As an example, many organizations may offer an open vacation policy as a perk and a significant part of their company culture/work-life balance. However, the actual culture of the company or the culture within individual teams may not allow for employees to take time off as they want or need to. This is just one example of how culture (like wealth) doesn’t “trickle-down”—it’s built and requires continuous effort.
If we stick to the analogy of company culture being similar to wealth accumulation, we can also see how there’s a similar disconnect between people at the very top and everyone else.
This disconnect is not something that happens only within dysfunctional organizations; it can and does happen to the most well-intentioned executives and within well-functioning companies. In a trickle-down company culture, leaders believe that their idea and their own experience of culture permeates throughout the organization. However, culture exists at all levels and is different at all levels.
Leaders should know that company culture isn’t something that just trickles down, but rather, is something that is continually curated at all levels.
There may be organizations—perhaps very small ones—where a trickle-down company culture exists and works well. Within most companies, culture takes a bit more deliberate work.
Here are some of the ways that you can enable a positive company culture within your organization:
- Give your managers and teams the tools they need to better support culture, as well as the agency to decide for themselves how company culture functions for them.
- Create a very clear company vision and accompanying values that do trickle down into individual teams’ and employees’ understanding of what company culture looks like in your organization.
- Allow your individual employees’ experiences and values to shape your company culture—think ‘flow upwards’ instead of trickle down—and don’t be too rigid about what culture looks like.
No matter where company culture comes from—up, down, all around—it’s essential that leaders help foster it at every level.
