The Impact of Company Culture
Why building an appropriate company culture matters.
The importance of organisational culture is widely acknowledged. Back in 2019 there were just 500,000 references to cultural considerations in leading business publications but by 2021 this figure had leapt to over 2 million.
But culture is still a topic that businesses tend to struggle with. Identifying and promoting a culture that aligns with corporate objectives is vital but not necessarily straightforward.
What is Company Culture
The starting point is an understanding of what culture actually means in an organisational context. It’s a complex topic but reports suggest, there is a simple topline definition. Culture is “the way we do things around here.”
You can break that down into a number of components. Culture is about behaviours. How employees work with each other. How they interact with customers. How they respond to challenges or new initiatives. Equally, it is about the values and norms of the organisation. What this means in practice depends on the business. For instance, some companies will seek to create a culture where innovation is prioritised. Others might emphasise teamwork or a culture of compliance. There is no single good or bad approach. Culture should serve the organisation’s goals.
Why is Culture Important
A clearly defined culture is more than just a “nice to have.” From an employee perspective, an awareness of the company’s culture plays an important role in helping them to understand what is expected of them. Thanks to a combination of word-of-mouth recommendations, company reports and workplace evaluation sites such as Glassdoor, the culture of an organisation is no longer known only to those who work within its four walls. Highly qualified candidates will often pick and choose the companies they apply to based on what they know about the working culture. This should be seen as a good thing. A cultural fit between applicant and employer will ultimately reduce churn.
Similarly, the cultural persona of an organisation plays an important role in defining what customers, partners and suppliers can expect. It becomes part of the brand.
Culture drives performance. That’s partly about creating a culture where people are motivated to give their best. Motivated employees who feel aligned with their organisations tend to be much more productive than those who feel – for whatever reason – disengaged.
Every organisation will have its own way of engaging staff but the industry leaders provide examples of how it can be done. For instance, Google seeks to attract and retain the top talent in its industry and there is a huge emphasis on maintaining motivation and teamwork. To that end team members enjoy a range of perks, such as free meals, parties, trips, gym membership and flexible working options.
Meanwhile, IBM has sought to underpin its company culture by implementing a new employee feedback system. The aim of the initiative is to move beyond a simple metrics-based approach where staff are rated 1-10 on performance, Instead, employees report on their own experience. This provides IBM with the information it needs to support individuals towards improved performance.
Building the Right Company Culture
Organisations often take a top-down approach to company culture, the process often starts with a CEO commissioning research by HR. The findings form the basis of a strategy and the appropriate measures are implemented. It’s important, however, that the desired culture takes root and is reflected in the behaviours of staff.
To this end, organisations should be clear about what they are seeking to achieve. That means defining not only the mission of the company but also its values. This is important. Businesses have a “ why” – the purpose of their existence. Equally, businesses have an ethos – the set of values that defines how they work. Once these have been identified, the company can begin to craft the culture it is seeking to create.
Two-way communication is vital. The cultural vision should be communicated to everyone, but equally, employees should have an opportunity to provide feedback. The culture an organisation has sought to foster may not tally with the experience of employees. Managers need to know if there is a disconnect. Dialogue should be encouraged through formal and informal channels.
In today’s workplace, employee wellbeing is a priority. Again, what this looks like will depend on circumstances but factors such as work/life balance, flexible working, and a healthy working environment are key to attraction and retention.
Challenges
Creating a cohesive culture is not necessarily easy. For one thing, the working landscape has altered dramatically over the last few years. More people are working from home at least some of the time and the modern trend of creating a distributed workforce – which may contain many freelancers – has created a sense of fragmentation. So organisations need to be proactive in maintaining cohesion. Strategies include more virtual meetings – both one-to-one and group – and real-world team-building events that everyone attends.
Workforces are also more diverse. This can be a challenge but cultural differences around gender, ethnicity, social background, education and sexuality are distinct from the cultural goals of the organisation. Diversity can, therefore, be encouraged and celebrated without any conflict with the cultural goals of the business.
Culture can seem like an intangible concept but a positive appropriate culture is a driver of performance. By acknowledging its importance, businesses can take steps to create the culture that is right for them.
