What Is Company Culture: 6 Steps to Building a Thriving Organizational Culture
Company culture has been a hot topic among people leaders in recent years. Many executives will probably say their organizational culture is their most valued asset when considering what makes their company unique.
While many organizations take pride in their culture, the truth is not many leaders have wrapped their heads around it. Company culture is not tangible; therefore, it is not easy to understand, measure, and iterate.
A strong workplace culture runs deeper than having a laid-back dress code, free beverages, and team-building activities. It is about shared values, goals, and principles that drive the entire organization.
In this article, we're going to explore the many facets of organizational culture by looking at its definition, importance, and six steps to building a high-performing one. Plus, a free quiz waiting for you at the end will reveal your organizational culture type.
What is organizational culture?
Organizational culture is a collection of values, norms, beliefs, assumptions, and practices that shape a company's social and psychological environment. In simple terms, company culture is the identity that defines the entire organization.
Workplace culture is typically developed and promoted by founders and HR professionals, but it is an ever-evolving, employee-driven principle. Furthermore, company culture governs how team members act, feel, interact, and make decisions.
Every organization has different goals and a diverse workforce. Therefore no two organizational cultures will ever be the same.
A strong, well-defined organizational culture promotes positive attributes that result in high employee engagement and increased productivity. On the contrary, a dysfunctional workplace culture brings out certain traits that can impede even the most successful companies.
This is one of the many reasons organizations should strive to understand and improve their culture, which leads us to the next section of this article – why is company culture important?
The importance of culture within your company
It goes without saying that a company's culture is an invaluable asset that can differentiate you from your competitors.
According to a Deloitte survey, 94% of executives and 88% of employees think having a distinct workplace culture is crucial for business success. All facets of a company are influenced by its culture, from sales and profits to employee morale and recruiting efforts.
In a positive work environment, people are inspired and motivated to perform their best and work collaboratively to achieve common goals. In addition, people feel safe, supported, and appreciated when a company culture aligns with their core beliefs.
Moreover, companies that emphasize culture can better withstand challenging times and changes in the business environment.
Here are four ways a strong culture can elevate your company:
Facilitates recruitment efforts
Attracting and retaining top talent is extremely difficult in today's work environment, especially with many emerging companies.
Many people have adjusted their hiring standards as a result of this. Whenever they consider joining a new company, they research its culture because it can be one of the biggest deal breakers.
According to a Robert Half study, one-third of U.S. workers said they would turn down their ideal employment prospects if the company culture weren't a match.
This is why getting to the bottom of what drives a company's culture is mandatory.
Keep in mind that no two people are the same. Therefore, even a well-established company culture will not resonate with all prospects.
The goal is to nurture a workplace culture aiming to lure the people you want to work for your organization, and the appropriate personnel will eventually follow.
Increases employee engagement
Employee engagement is the term used to describe how dedicated, connected, and enthusiastic a person is about their work at a particular company. It provides long-lasting advantages and helps people form genuine relationships with their peers.
Having an engaged workforce has been a constant challenge for modern companies in recent years. Although organizations acknowledge the importance of employee engagement, studies show that many still struggle to offer a positive work experience for their people.
For instance, according to Gallup data, only 21% of employees are engaged at work in 2022. On the bright side, research shows that companies with strong cultures have employee engagement rates up to 72% higher than those with underdeveloped cultures.
Employee engagement skyrockets when companies create and foster an immersive organizational culture.
Naturally, employees who work for companies with strong cultures are motivated to do their job and develop close relationships with their peers and organization, thus improving their work experience and raising engagement.
Boosts employee productivity
We've already touched on the fact that employee engagement and satisfaction are closely tied to company culture. Consistently, highly engaged employees who are content with their jobs work harder and produce more remarkable results.
Companies that engage their people effectively experience an 18% increase in productivity, according to Gallup.
Although company culture is intangible, it permeates everything your people do daily. Therefore, you may boost staff productivity and, consequently, overall work production by developing a strong business culture that aligns with your organizational goals.
Endeavor to create an organizational culture that balances each person's demands while still supporting your business's objectives. Your people will thank you for it by producing more work and performing better.
Decreases employee turnover rate
For many organizations, employee retention is a real struggle due to the volatile nature of today's business environment.
By fostering an inclusive environment and a sense of community while respecting your employees' wellbeing, a solid organizational culture can aid in reducing your turnover rate.
According to Gallup research, three in four disengaged employees actively seek a new job. More precisely, 38% of employees say they want to leave their positions because of weak company culture.
These whopping statistics demonstrate that companies with a disengaged workforce have higher turnover rates than companies with actively engaged people. Therefore, it is crucial to take the time to establish positive cultural values that support your firm's goals to decrease turnover.
Six steps to building a high-performing company culture
Organizational culture is a complex subject that doesn't lend itself to quick fixes. While developing and fostering a strong company culture isn't an easy job to do, even for the most progressive organizations, there are undoubtedly areas where actual change is possible.
A comprehensive plan with specific goals you can work toward is necessary for building a great workplace culture. The six stages listed below should act as a road map for creating a continuity culture that will benefit your entire company in the long run.
Step 1: Implement a recognition program
Implementing a recognition program can have a long-lasting positive effect on the culture within your company.
When people feel valued at work, they are more engaged and motivated to go above and beyond.
Studies show that key measures like employee engagement, retention, and productivity increase when a company makes employee appreciation a cornerstone of its culture. In fact, employees are 2.7x more likely to be highly engaged when they feel their organization will recognize them.
For recognition to become part of your culture, it must occur frequently rather than only on special occasions like work anniversaries.
Remember that social recognition is just as important as monetary one. Recognition comes in many forms, so find out what your people value the most and adapt your model accordingly.
Step 2: Encourage constant feedback
Feedback is a powerful tool for team cohesion and high performance. It is also a crucial mechanism for self-evaluation and determining areas of improvement.
According to Microsoft, employees who feel their companies use feedback to drive change are more satisfied (90% vs. 69%) and engaged (89% vs. 73%) compared to those who believe their companies don't drive change through feedback.
Collect feedback from your employees to understand how they're feeling and act on these findings while they're still relevant. Not only does this improve your company culture, but it also positively affects employee satisfaction and profitability.
Gathering feedback from your people can also reveal cultural deficiencies. Take the time to offer feedback on any areas of the business that need improvement, and encourage your people to do the same.
Be professional and candid in your communication while leaving feedback. Give specifics and potential fixes for any issues the employee is having.
Step 3: Prioritize employee wellbeing
The link between our mental and physical health has never been more evident. As mental health discussions become less taboo, companies have increased their investments in wellness programs to boost their resilience.
Employee welfare isn't just a perk of a great job; it's quickly becoming a fundamental component of modern workplace culture.
When employees' wellbeing is taken care of, organizations benefit from positive outcomes, such as increased productivity and satisfaction, more sales, customer loyalty, organizational citizenship, and higher retention rates.
Recognize the difficulties each team member faces and decide on a plan that will enable each person to accomplish their goals while also enticing them to take some time off work.
Encourage your people to establish boundaries so they may take a break and unwind at the end of the day. Empathy and adaptability are mandatory in this process.
Step 4: Promote autonomy
Establishing a relationship of trust with your people is mandatory for nurturing a healthy workplace culture.
Give your employees autonomy over their projects and assure them that you trust them to complete their tasks effectively and on time.
Workplace autonomy improves employees' overall wellbeing, motivation, and job satisfaction.
Studies show that when companies abandoned micromanaging in favor of autonomy and self-governance, their people were more productive.
In addition to increasing productivity and satisfaction, companies can increase employee loyalty and adaptability through employee autonomy.
Step 5: Alignment with company values
The cornerstone of your company's culture is its set of values. Organizations with strong company cultures strive to achieve ongoing alignment with their vision, mission, and objectives.
Start by creating a mission statement and then ensure that you incorporate those company values into your daily operation.
Your company will be known and respected for living out its values by its people, partners, and clients.
To demonstrate that your values are more than words, you can reward employees for their actions that uphold your principles. This will encourage them to foster the value-based culture you desire.
Here are some benefits you can expect from aligning your teams with your company's values:
👉 Your people will find meaning and purpose in their work;
👉 Your teams will have clarity on their goals/objectives and how their work impacts others;
👉 Your employees will feel that their work contributes to a better work-life overall.
Step 6: Foster a sense of community
A healthy and prosperous workplace culture means nothing without its people. Therefore, creating a safe space where people feel connected with their colleagues is essential to any company that wants a thriving workplace.
It takes strong relationships among team members to create a corporate culture that can withstand adversity.
However, fostering a sense of community is challenging, especially in remote or hybrid settings. Luckily, many resources are available to encourage collaboration, such as team-building exercises or virtual activities.
Look for and foster mutual interests between team members, especially those from different generations who might otherwise find it difficult to get along. This can open up fresh channels for comprehension and empathy, two things that are essential for enhancing conflict resolution, creativity, and other interpersonal skills.
What is your organizational culture type?
The bottom line is that if you want to differentiate yourself from your competitors, you must have a strong company culture.
There are many elements that contribute to a company's culture, but this article's key takeaways are a good starting point to get you thinking about what your organization has to offer.
So, what are your upcoming plans? Whether you're just shaping your organizational culture or you already have one and want to improve it, you need to learn which facets of your corporate culture are most significant to your workforce.
Start this journey by taking this quick quiz, which will help you find your organizational culture type.
You'll walk away with thorough information on the culture within your company. With those insights, you can strategically adjust your organizational culture and nurture one that will make your team flourish.