May 30, 2022
Why does company culture matter now more than ever?
Company culture has always been important. It has been a key part of how organizations operate for years. But its impact on business success matters now more than ever. To make that statement isn’t to follow the latest fad. The employees are saying it too!
According to LinkedIn’s Workplace Culture Trends report in 2018, nine out of 10 millennials would take a pay cut to work in a company where their values align with those of the company. Earlier research by Columbia University shows that 48% of employees would look for a new job due to poor company culture. If your organization wants to hold on and attract top talent, it has to make the company culture a priority.
But what is a healthy company culture and how can you cultivate it in your organization?
What is company culture?
The definition of company culture is about the attitudes and behaviors a company and its employees have. It is sometimes referred to as corporate culture, workplace culture or business culture. The basic definition is the same: it is about the way in which the company conducts itself and how it operates.
The attitudes and behaviors making company culture encompass a variety of elements, including:
- Company values and ethics,
- Work environment,
- Company mission, expectations and goals, and
- Leadership style.
These attitudes and behaviors show how the different people within the organization interact with each other and its customers. They are part of the decision-making process throughout the organization.
Each organization sets its unique company culture. Sometimes corporate culture is deliberate and part of the process of setting up a business. But very often company culture can be a result of specific decisions made over time.
Company culture examples can range from a team-based culture where employee participation is emphasised on all levels to a traditional management style culture. It can manifest in values of communication and innovation or those of integrity and impact. What is your ideal company culture can be different from another organization’s ideal.
Importance of company culture
While business culture varies from one organization to another, having a clear and identifiable company culture is important. Because company culture characterises an organization, influencing it creates positive results across it. A healthy culture is an important part of work satisfaction and productivity.
For employees, the company culture of an organization can be a dealbreaker in terms of how happy they are at work. Since much of your daily life is spent at work, you want to find a workplace that feels like home and fits your own core values. Another LinkedIn survey highlighted how 66% of job seekers consider company culture as the most important factor when choosing career opportunities.
For the organization, happy employees lead to higher productivity and increased value. Not only can company culture help attract the right type of talent, but also result in a workforce that stays put longer. According to Deloitte’s research, organisations that actively cultivate corporate culture have 40% higher employee retention rates to organisations that don’t.
How to create a healthy corporate culture
The importance of company culture is clear. But how to ensure it’s healthy? Company culture occurs naturally whether or not the organization develops it intentionally. Left unchecked, an organization could create a corporate culture that isn’t healthy or lead to desired outcomes.
How should your organization establish and nurture its corporate culture?
1. Identify your organizational culture.
Robert E. Quinn and Kim S. Cameron have identified four attributes that are often accepted as four core types of corporate culture. These are:
Clan culture – People-focused company culture where the primary focus in on mentorship and teamwork. The work environment is highly collaborative and action-oriented.
Adhocracy culture – These organizations are rooted in innovation and risk-taking. They value individuality and employees are encouraged to think creatively.
Market culture – The company culture focuses on competition and growth. Profitability is at the core of the organization’s actions and behaviour. The organizations are result-oriented and emphasise external success.
Hierarchy culture – Structure and stability are the main drivers of these organizations. Their corporate structures are often traditional and risk-averse.
It is beneficial to examine which of the above best describes your organization’s current corporate culture. Is that also what is your ideal corporate culture? Identifying where you are and where you’d want to be are important in ensuring you cultivate a healthy corporate culture.
2. Establish core values.
Pick core values for your organisation but remember to select them based on those you can put in action. It’s not enough to say you promote sustainable practices without following it up with sustainable practices. At Contractbook, sustainability is part of every action, such as the commitment to plant 1 million trees. Core values need to be practised to become the cornerstone of a healthy company culture.
3. Set a company mission.
An organisation will have goals it wants to meet but also a deeper, fundamental mission. By setting a clear company mission and communicating it to your employees, you will impact the corporate culture.
4. Appreciate and support your team.
Whether you are opting for a hierarchical, traditional leadership or a more shared style is not that crucial for a healthy corporate culture. What is important is that your attitude towards your employees is appreciative and supportive. You need to demonstrate this for everything your team does, provide opportunities that are motivating, and offer support to allow your team to be productive.
5. Set an example and provide feedback.
Business culture is not about writing fancy words on a piece of paper and then occasionally reminding your workforce about them. You need to set an example by practising what you preach and reinforcing the types of actions and behaviours you want to see. You do not need to incentivise corporate culture with financial rewards, although that’s also an option. You simply want to recognize people who live up to the standard and provide regular feedback. Honest feedback when people get it right, and wrong, will lead to healthy company culture.
A healthy workplace culture leads to business success
Figuring out what is your ideal company culture is worth it. Today’s employees want to be part of organizations that have aligning values and practices. Healthy company culture will make it easier to attract talent and hold on to it.
When it comes to setting a healthy company culture, the key is putting words into action. It is not enough to have a document detailing what you aspire to me, you also want to showcase that in practices and actions – from how you draw your contracts to how you manage your teams. Take time to think about the values your organization holds dear and support your team in showing those values in action every step of the way.
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