What is company culture?
Company culture, also known as organizational culture, is the unspoken set of rules that define an organization. It covers the company values, attitudes, norms, and practices that characterize a business and its people. It’s about the way the people in a company go about their day-to-day working lives and how they interact with one another. At its simplest, company culture is the “personality” of an organization.
In practice, company culture is structured around values, beliefs, and shared practices that define how we do things. Each organization has a unique culture that is characterized by what its people believe and how they behave. All of that can be set in a code of conduct or in a code of ethics that will gather evetything to describe company culture. While establishing the code of conduct of the company, the HR professionnals should include the national cultures of the local community as well as multiple cultures that might be shared inside the company. Employees are encouraged to share personal values together to increase the performance management of the company and avoid working in a toxic workplace.
The organization's culture can be created in many ways: through action and words, for example, building a new office space or creating an award-winning website.
Culture affects how team members work together, how they approach their job, and what they believe should be achieved. As such, the company's culture can include:
- A cohesive set of values that everyone in an organization agrees on and lives by
- The behaviors and competencies that managers and workers demonstrate to each other and across the business
- Their company's goals, methods, and communication styles
- How they choose to interact with each other and the way they award, recognize, and acknowledge colleagues
Company culture helps give organizations a clear identity and define what kind of people are attracted to an organization. It also acts as a barometer of the company’s overall health and well-being and how it thinks, feels, and acts.
Why is company culture important in an organization?
Organizational cultures impacts everything that happens within that enterprise. And that matters when you’re trying to attract new talent. Incredibly, as many as 66% of job hunters want to know what the company culture is like. Not only is company culture influential in attracting new employees, but it’s also crucial in retaining employees too.
Company's values affects staff retention, the “stickiness” of an organization. Company culture goes beyond pay and benefits to include factors like inspiring managers, room for growth, exciting projects, or a sense of shared experience.
Besides, studies have shown that companies with strong cultures are more productive, retain talent longer, face fewer internal conflicts, make better decisions, are more innovative, and rise to market challenges better.
From the outside looking in, the company’s core values help define its behavior and approach to problems. Company culture defines how things get done within an organization. The company's core values encourages thinking and acting that makes it possible for employees to perform at their best in the business world. It is all about the way employees work together to execute their company’s mission.
What benefits can company culture generate?
Here are some other reasons for the importance of a great company culture:
- It increases employee engagement. Studies have found that companies with strong cultures have higher engagement than organizations with weaker cultures.
- It increases productivity. By creating a strong company culture and increasing engagement, you’ll also see productivity gains in your work environment. In fact, according to the Organizational Health Index, Companies with the strongest culture can perform 200 % higher than companies in the bottom quartile. A successful organization will set clear cultural values in order to encourage employees and company leaders to positive relationships inside the work environment.
- It can be your competitive advantage. Your culture is unique to you and built up over time. If you have a strong culture, it will show in your customer service, relationships with clients, and your work.
- Strong culture makes an organization easier to manage. In a mature, healthy culture, employees know what’s expected of them and behave accordingly. It inspires people to be the best version of themselves.
Effective company culture is one that people are proud to be part of. Building an organizational identity establishes a sense of pride in the work product and how it’s made and who makes it. It affects every aspect of the organization—from hiring new employees to guiding growth.
Besides, company culture helps to achieve brand recognition that in turn helps turn customers into advocates. Company cultural identity is the brand's face and will be part of how they see themselves and what they project to their customers. Culture also conveys a sense of security—about the future and doing business with the company today.
How to create a strong company culture
Creating a solid company culture begins with a commitment from the top. Company cultural identity sets the tone for how employees work together to achieve success. Company leaders have to walk the talk, live it every day, and communicate throughout the organization.
Culture also includes an element of consistency that will bring people together across different departments and job descriptions. It is a critical part of the equation, and it all starts with a commitment from leadership.
- Leaders and managers make all the difference in developing high-performing teams. Company leaders need to be able to establish an expectation of excellence by modeling these behaviors themselves. They must also make sure employees understand how they are critical to achieving company goals.
- Fostering an environment of transparency is essential, but leaders must also reinforce that trust still matters. Corporate culture can create a safe environment where people feel comfortable sharing their concerns without fear of backlash or recrimination.
How to improve company culture?
Improving the company's culture is a marathon, not a sprint. By following a series of well-thought-out changes, you can start to shift your company culture.
- Review your purpose, mission and values. Employees want to work for a real purpose and can quickly spot meaningless management speak. Make sure your purpose and values resonate with employees by consulting with representative groups for their input. Not only that, but make sure you take their feedback on board.
- Hire in line with your values and target culture. This may mean having gaps in your team for a while as you wait for the right person. But compared to hiring people who go against what you want to create.
- Engage with employees at all levels of the organization. Too often, employees at the coalface are forgotten about. Leadership and managers believe there is a great culture, but the people doing the work would disagree. Teach managers and team leaders to engage with their direct reports and make a point of encouraging senior leadership to experience front-line work more often. This will give them real insight and help them understand what needs to be done to engage with all employees.
- Show employees you care about them. Be available to support them and ask other managers to do the same. Show respect for all employees and appreciation for the work they do.
Examples of companies with great cultures
There are many great examples of companies with positive company culture.
- Company culture is one of the main reasons that employees love working for Airbnb, according to Glassdoor. Employees say it’s a very inclusive environment where they connect with other employees. There are lots of opportunities to learn and take on new challenges in their roles. Company culture is a big factor in why employees love working here.
- Company culture is one of the main reasons employees love working for Salesforce, according to Glassdoor. Employees appreciate that their CEO works to create an environment where everyone feels valued and included. There are many opportunities for personal growth at this company, making it a great place to work. Company culture is a big factor in why employees love working there.
- Company culture at Amazon, according to Glassdoor, is about "Integrity and Entrepreneurship." Employees appreciate that there's an emphasis on hiring A-players and letting them do their jobs. The company's culture is set by the company leadership and is a key factor in why employees like working here. Organizational culture is a big factor in why employees love working here.
Company culture and the future of organizations
The company's culture has a significant impact on the future of organizations, and it will remain important for businesses that want to maintain a competitive advantage.
Company leaders must stay aware of its effect on all levels of their organization, including how employees interact with each other, managers and leadership, customers and suppliers, and the work they produce. It is vital to the future of all organizations and must be nurtured with care and will remain a critical factor in why employees choose to work for organizations.