Company culture determines how your organization feels about their work, work environment, and team. A positive company culture has numerous benefits for teams and organizations including job satisfaction and increased engagement. In this guide, we'll define company cultures, discuss more benefits, and describe how to create a healthy company culture.
Company culture is an integral part of business, as it affects nearly every aspect of a company. From recruiting top talent to improving employee satisfaction, it’s the backbone of a happy workforce. Without a positive corporate culture, many employees will struggle to find the real value in their work, and can lead to a variety of negative consequences for your organization’s bottom line.
According to research by Deloitte, 94% of executives and 88% of employees believe a distinct corporate culture is important to a business’ success. Deloitte’s survey also found that there is a strong correlation between employees who claim to feel happy and valued at work, and those who say their company has a strong culture.
There’s a reason why companies who are named as a Best Place to Work see so much success. These organizations tend to have strong, positive corporate cultures that help employees feel and perform their best at work. Research gathered by CultureIQ found that employee’s overall ratings of their company’s qualities – including collaboration, environment and values – are rated 20% higher at companies that exhibit strong culture.
Executives are often confounded by culture, because much of it is anchored in unspoken behaviors, mindsets, and social patterns. Many leaders either let it go unmanaged or relegate it to HR, where it becomes a secondary concern for the business. This is a mistake, because properly managed, culture can help them achieve change and build organizations that will thrive in even the most trying times.
Company culture is the business’s shared values, goals and behaviors. It affects how employees interact, the way work is executed, and the decisions a company makes. Company culture includes the following elements:
Company mission. Your company mission statement is the purpose of the enterprise. It says why your business exists, what you hope to achieve and what your core values are. A strong mission is important because it gives employees something to rally around – a reason to work at your organization (beyond a paycheck).
Management style. There are several leadership styles a business can adopt when creating a company culture. The key is to stick to the one you choose.
Work environment. When establishing a company culture, consider the employee experience you are trying to create how you want your employees to collaborate. If you are in an office, is it an open space or walled-off cubicles? If everyone is working from home, are they required to check in regularly or on an as-needed basis?
Expectations. Employees want to do a great job, and it’s up to the organization’s management to define what that entails. With a good company culture, employees should know what is expected of them and why. The more transparent you are, the better the company culture.
Goals. Businesses need goals to grow, and employees must understand those objectives to meet them. Ask employees to strive to meet milestones that contribute to the business’s goals. Doing so can increase productivity, particularly if there are incentives for meeting goals.
A great company culture has many benefits for both remote teams and onsite employees. Here are some of the big ones:
A survey by TINYpulse found that transparency is the number 1 factor in employee happiness. When your organization’s culture is focused on transparency, everybody knows what’s expected of them, how business is faring, and the direction of the company.
A good company culture can bring employees together. When everyone shares values and a mission, your workforce becomes a team.
If your employees like their work environment and are happy with the people they work with and for, they are more likely to be satisfied in their jobs.
Toxic work environments can harm not only productivity, but also your employees’ health. Several studies have shown that employees at high-stress companies spend more on healthcare, miss more days of work, and experience more on-the-job accidents. A healthy company culture can do the opposite. When your employees don’t feel overwhelmed or afraid of losing their jobs, their well-being may improve.
A fantastic workplace culture benefits organizations as well. These include:
Recruiting and retaining employees can be expensive. A key way to reduce turnover and increase employee retention is by creating a fantastic company culture, because new hires and employees will stay with the company if they are happy there.
Companies that foster an open and collaborative work culture tend to have engaged employees. That engagement has a direct impact on productivity and, in turn, the company’s bottom line.
Work-life balance is essential to keeping top talent. A company culture that supports a healthier work-life balance will have healthier employees overall, and there will be fewer reasons for workers to take sick days.
If you offer employees a strong company culture, people will hear about it, either by word of mouth or on online company review boards. When employees tout your company’s great culture, it will be a lot easier to recruit talent.
The answer doesn’t lie in sky-high salaries, fancy physical spaces, and flashy perks.
The answer lies with successful leaders who focus on creating a culture of positivity and healthy employee motivation that encourages everyone to believe in the mission of the organization.
The following are six powerful tips that will help you build the foundation of a corporate culture that will help your organization, and employees, thrive.
In general, people want to believe that they are part of something meaningful, that they are contributing to a common purpose. Corporate culture, therefore, must be deeply rooted in your company’s core purpose and values.
People are not going to want to be a part of your organization solely due to the tangible aspects of the job. Your culture should offer an experience that they want to be part of as employees have to feel good about what they do.
To be effective, a certain level of dedication is required if you truly want to change your culture for the better. If you are starting the process of changing your culture, your value statement should represent your vision for what you believe your company should represent.
Buy in comes from authenticity.
Your purpose and values will only create a solid foundation for culture change if you truly believe them. The process must be genuine.
Corporate leadership—at every level of the organization—must be personally accountable.
Only by committing yourself to act within the values you define will you earn the trust of your employees and help people buy into the process.
If, as an employee, one genuinely feels that there’s integrity in what’s declared from the top of the organization, and that the top of the organization deeply, deeply believes in and reinforces those values, then the employee will feel that you’re genuinely advancing a purpose for a good reason.
To create real cultural change, your leadership team must be prepared to communicate those values across the organization and to act on those values themselves.
Listening to your organization is absolutely critical.
By creating listening posts throughout your organization, you can gather anecdotal and quantitative data about your culture. If you are listening carefully, this data should confirm that your culture is motivating your employees, or alert you to signs that you may need to make a change.
Surveys measuring metrics in regard to engagement, trust, and culture, for example, can be powerful tools for collecting honest feedback from your teams.
Quantitative data such as low employee turnover, high retention, ease of hiring quality talent, high productivity, and high customer engagement can also be leading indicators that your culture is working in your favor.
It’s important that you don’t rely solely on indirect listening posts, however. Effective and meaningful direct communication must be an ongoing part of the process as well.
One-on-one meetings, working groups, workshops, and conferences enable you to communicate values from the top down while simultaneously taking the pulse of teams across the organization.
Listening posts are especially critical for alerting you to a culture that is trending in a negative direction.
High employee turnover, for instance, is an obvious sign that your corporate culture isn’t working.
Yet whatever the outward signs, the root problem is the lack of psychological safety. Your employees do not feel safe to express concerns, report problems, be proactive or creative, promote innovation, or take risks.
And one of the most powerful indicators that people in your organization do not feel safe is silence. The most dangerous organization is a silent one.
An organization with a healthy culture has to listen to the criticism and be open – not defensive. And you must stand back and have the courage and the honesty to admit when something is wrong.
It’s easy to write off the criticism you hear as nothing more than opposition to change or the bad attitude of a disaffected employee, however, successful leaders must rise above that gut reaction.
Building psychological safety requires rebuilding trust and ensuring that your actions are in line with your corporate values, Most importantly, you may need to acknowledge that your words and actions could be part of the problem.
Mistakes are true conduits for learning.
How your leadership team handles mistakes will reinforce or undermine your culture.
A great place to start is openly acknowledging that mistakes will happen. Executives should be able to admit that even they will make mistakes. Employees have a right to expect great leadership, but not perfect leadership.
When a mistake is made, examine that mistake in the context of your core purpose and values. Reviewing how a particular error occurred within that context will enable you to learn the right lessons.
Only then can you truly promote a culture of acceptable risk-taking, creativity, and innovation.
Corporations are never static, and neither is the process of creating a culture change.
The goal is to create momentum in a positive direction.
Each small action you take becomes systemic, and you start to create a movement. These small steps start to reinforce all the other steps, moving you forward. And the reverse is true as well, that if you aren’t careful, movement can trend toward toxicity.
Once you create your listening posts, never stop paying attention to what they’re telling you.
If you are creating momentum in a positive direction, your engagement surveys, trust indicators, retention and hiring numbers, for instance, should confirm that. While there will likely be false starts and missteps, the key is to look for trends that you are moving forward.
Always be on the lookout for the “canaries in the proverbial coal mine” as well, as momentum can snowball in the wrong direction just as easily.
Part of the iterative process must include frequently revisiting and revising your value system.
Organizational culture will develop even without your input, but in the absence of that guidance, it may not be healthy or productive. By following the steps in this guide, you can improve communication with employees, start creating a culture of positivity, and ensure that all members of your team put your culture into action.
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