Workplace Culture: How Does Company Culture Impact Your Business?
- Human Resources
6 min. Read
Last Updated: 04/29/2021
Table of Contents
Every business, large and small, has its own distinct culture and norms. As a business owner, how your company's culture is supported and expressed can have a significant impact on your business, affecting everything from employee productivity to branding and sales.
Here's what you need to know about workplace culture – what it is, why it's important, and its identifiable characteristics along with the fundamentals of how to build a strong, healthy company culture.
What is company culture?
When trying to understand a company’s culture, it helps to think of culture as a personality. With people, every individual has their own set of beliefs, values, and behaviors that interact to create a unique personality. Individual businesses are no different. Company culture refers to the beliefs, behaviors, and traits that determine how a company's employees interact with one another and how they handle outside business transactions. A company’s culture can be difficult to define because it's the collective traits and norms of its members. Moreover, it can evolve over time, taking years to develop and mature.
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Why is organizational culture important?
Workplace culture permeates every dimension of business operations and employee relations. The importance of company culture resides in its impact on the success of a business and fundamentally, this is why culture matters in the workplace.
Does culture impact business? Here are 10 ways a positive and healthy culture can influence the success of a business:
- Increases employee engagement.
- Decreases turnover.
- Elevates productivity.
- Improves customer relations.
- Attracts higher-quality candidates.
- Encourages a healthier work environment.
- Creates a strong brand identity.
- Supports high-performance teamwork.
- Fosters employee loyalty.
- Boosts employee enthusiasm.
Characteristics of company culture
Within an organization, everyone plays a role in creating workplace culture. Top leaders are generally responsible for developing a mission, vision and values statement in support of an organization's purpose for existence. Organizational goals should align with the purpose and mission. These big-picture concepts provide a framework for a company's culture, but it is the people and their attitudes that shape the culture on a day-to-day basis. Some characteristics of organizational culture include:
- Leadership. How do leaders spread company culture? How authentic are their decisions in supporting the organization's purpose, mission, and/or values statements? Is employee well-being important to the company's principles in leadership actions and words?
- Communication. Is there consistency in communication of culture and values from leadership to employees to customers? How well does a company communicate clearly to staff members and to customers?
- Change management. How does your business evolve to meet external stressors like economic conditions, technology demands, employee needs, and market demand? Is your company able to adapt with open lines of communication, realistic expectations, clear definitions of roles, and transparency? Or is it chaotic and slow-paced with unclear structure?
- Attitude. What message do your company's actions send to employees, freelancers, vendors, and customers? Are those in leadership and positions of management optimistic and encouraging? Are hiring managers sensitive to vetting employees who support your company's values on creativity, communication, innovation, or working well in a team or independently?
- Employee Well-Being. Are equality, diversity, and inclusion supported in the workplace? Are employees supported in their pursuit of growth and development? Do employees feel acknowledged and recognized in meaningful ways such as with good benefits and perks?
Creating a strong company culture
Business owners have much to gain from a thriving company culture. As with most things, big rewards require effort. When it comes to molding and creating a company culture that yields the desired benefits, the approach may feel more intuitive for some leaders while others may find themselves in new territory. The following tips can help guide and organize your efforts.
- Start with leadership.
- Identify your organization's purpose.
- Solicit, listen to, and use employee input.
- Focus on clarity in language.
- Reinforce the message across all channels (branding, hiring, onboarding, performance reviews, newsletters, emails, internal social activities, community support, meeting protocol, team selections, etc.).
- Invite feedback.
- Encourage inclusion.
- Respect employee concerns and frustrations.
- Be the first to deliver bad news.
- Model your message and culture.
- Make business decisions that support your messaging and desired culture.
How to build company culture
Every business has a culture, whether you participate or even accept the concept or not. Take the opportunity to develop a corporate culture that has meaning to you, and it could play a key role in helping you achieve your business goals.
Here are six concrete action steps to boost awareness of and loyalty to your workplace culture across staff members and customers:
- Determine your company's identity. What is important to you? What is the lasting impression you want to leave with employees and customers?
- Communicate that desire, write down your expectations, and make sure all managers are on board. Hold company-wide meetings to roll it out to staff.
- Update and revise handbooks, processes, and procedures to ensure the culture is being supported at the core functioning level. Establish standard expectations for employees and create or update job descriptions that align with the overall culture you're trying to adopt.
- Don't be afraid to get help. The process needs to be managed and developed internally, but you may need some external help and guidance to get the ball rolling.
- Be a role model for what you expect and employees will naturally tend to reciprocate the behaviors and patterns you and your leadership team establish as the norm.
- Keep an open mind and respect employee concerns and frustrations. These issues may arise out of inconsistencies between perceptions of a company's culture and the actions it takes. You can use these as opportunities to improve your workplace culture for even greater benefits.
As you can glean from the advice above, your workplace culture is ultimately a complex set of beliefs, values, and characteristics that describe what is important to the company both internally and externally. While a definition is limited to words, your company culture is as much defined by all the actions it takes and all the faces who represent your company's brand, as it is by what it declares on its mission statements and established goals. In recognizing the profound importance of organizational culture business owners and Human Resource professionals have a key role to play. Your role is to be an employee advocate to help ensure that the goals and mission of the organization are accomplished while aligning with employee needs.