Company culture isn’t a new term, however, it may be a term you’ve seen popping up more and more in the past couple of years.
We’re not here to teach you how to suck eggs, we’re here to go into detail about the importance of company culture and the benefits to your business of having the right company culture in place.
Organisations with a strong culture will benefit from increased employee engagement, resulting in a more productive and satisfied workforce. In fact, companies with a robust culture have up to 72% higher employee engagement than those whose cultures are misaligned or need improvement.
We’re here to cover some key questions that can help leaders assess their company culture and identify areas for improvement.
What is company culture?
Company culture can be defined as the shared values, attitudes, and behaviours that collectively make up the work environment. Company culture is about the experience employees have in their workplace.
Company culture is how things get done around the workplace, and this includes both systems and behaviours. Your company might use a dedicated CRM system (system), and it may be frowned upon to schedule meetings at 3 pm on a Friday (behaviours). Your systems and behaviours show employees the ‘land of the law’, for interacting with other colleagues and within the business.
When an organisation has a positive company culture, employees are highly engaged, dedicated and look forward to coming to work. This stretches across the organisation, from new hires, up to the leadership team. Not only is a healthy culture important for your current employees, it’s also important to attract new hires.
According to a 2019 Glassdoor study, 77% of adults would evaluate a company’s culture before applying to an open position, with more than half ranking an organisation’s culture as more important than compensation.
Your company culture isn’t a set-and-forget; your company culture will grow along with you as a business. As your team expands, you can take steps to improve your culture to better the mission of your business.
First, it’s important to understand what time of culture you have…
4 types of company cultures
We want to start by saying there is no right or wrong when it comes to the type of company culture you have – Aside from having an ‘unhealthy’ one!
Below we’ve shared four of the common types of company culture.
- Market culture – A market culture is concerned with competition and being number one in their field. Those with this culture will focus on profitability above everything else. You’ll find organisations with a market culture will put an emphasis on hitting targets and delivering results to satisfy the bottom line. Market cultures are typically fast paced and looking to get heads and shoulders above the competition.
- Hierarchy – Those companies with hierarchy cultures follow the traditional corporate structure. In this structure, you’ll find a clear chain of command and levels of management that separates employees and leadership. A hierarchy culture adheres to a rigid structure, and they have a set way of doing things, which makes them a little less agile – they’re also risk averse.
- Clan – As the name suggests, a clan culture is focused on its people and has a family feel about it. A collaborative environment whereby communication is a key priority. Unlike a hierarchical culture with a clear chain of command and a rigid structure, the clan culture is often paired with a horizontal structure, this allows a breakdown of any barriers between the senior leaders and employees. Clan cultures embrace change and are well prepared to take on any bumps in the road due to their adaptable nature. We often find many start-ups and smaller organisations have clan cultures. When just starting out start-ups will put a heavy emphasis on communication and collaboration.
- Adhocracy – This company culture is focused on innovating and being the first to develop the next bit hitter! An Adhocracy Culture empowers employees to think outside the box and be creative. Employees have the freedom to innovate and show their creative flair.
Why culture matters
Those with a strong company culture can maintain the stability of their workforce at a higher rate compared with competitors.
Keeping your employees engaged increases their performance and productivity by up to 12%, especially if they feel appreciated. When people have a sense of belonging, they will feel empowered and their productivity levels improve. Employees are more likely to go the extra mile if they are invested in the company.
If you’re looking to add to your team and recruit top talent, having a positive company culture will go in your favour. Having an appealing company culture will attract talent to your company, as they’ll have a positive impression on the business. Research has shown that 32% of job seekers might consider a job with lower pay if the employer had positive company culture elements, such as flexibility and a nontoxic work environment.
Employees can also benefit from improved health and wellbeing when the company culture is positive. When employees are overworked, with little or no support and left to their own devices, this can result in burnout and negatively affect their health and wellbeing. Employees need to feel like their work matters and that they’re positively impacting their job.
A positive and motivated workforce can mean your company will be more likely to innovate. If the culture of your organisation is one of blame and shame, the chances that people will feel comfortable displaying behaviours other than sheer compliance are slim to none. Psychological safety is needed so that people feel they can share ideas and learnings, thoughts, and creativity without fear that they’ll be knocked down or rejected. Honest and open dialogue can only take place once people feel comfortable to share their true feelings.
The culture questions to ask
Now we’ve gone through the importance of having a positive company culture and the benefit it has for your organisation. How can you assess your own? We’ve shared some questions you can ask yourself and others in your business.
- What are the core values of our organisation?
Are you clear about what the core values of your organisation are? If you are, has this been communicated well to all employees? Having clear values helps you ensure that your employees are working towards the same goals.
- Do we have a shared vision and purpose?
When your vision, purpose and values are aligned, it provides a common focus, a sense of commitment and mutual purpose. An inspiring vision and credible purpose go a long way to keeping your employees motivated and enthusiastic about their work.
It’s important not to stuff your company values, vision and mission in the drawer, never to be seen again, or pop them on a forgotten page on your website; an effective vision is an inspiring one!
- What behaviours are encouraged and rewarded in our organisation?
Are you encouraging and rewarding the right behaviours in your organisation? Some behaviours we recommend encouraging and rewarding alongside collaboration are the willingness to learn, adaptability and being cheerleaders of and for our colleagues.
- How do we communicate and collaborate?
Do your teams regularly communicate to share news, ideas and learnings? Employees need to have regular communication to foster that collaborative culture. If you’re a remote-first or hybrid organisation, this becomes even more important as there’s less opportunity for face-to-face interaction.
Do you have an internal communication channel such as Teams or Slack, whereby your employees can ask questions, give feedback, share and celebrate successes?
- What do we do to recognise and celebrate successes?
And finally, what do you do to recognise success? Utilising your internal communications is a great way to do this, and if possible why not have an all hands to share and celebrate success with everyone in your organisation.
It’s a good idea to get together as a team for social events to celebrate any successes or wins but also as a way to catch up with each other, especially if your team are out of the office and spread across locations.
Identifying areas for improvement
Once you have the answers to the above questions and have a better understanding of your culture, you can uncover any areas of improvement. Maybe you’ve identified that you need to work on your communication. Maybe you’ve realised you’re not celebrating successes enough and can do better. You might have noticed some behaviours within your organisation that aren’t healthy and need to be addressed.
When making changes to your internal communications or processes, it’s a good idea to involve your employees. Use feedback surveys and polls to get their input. By asking to become involved and have their say, it will make them feel valued and appreciated.
No one organisation is the same; they all have their own unique set of values and principles that they work towards. What works for one organisation won’t necessarily work for another. It’s important to understand your own values, purpose and vision and align your teams around those.
If you could benefit from the help of an organisational performance expert, get in touch to discuss your requirements, and our friendly team would be happy to chat.
To find out more about your company culture an help you to achieve your organisational goals, our useful guide takes you through the 7 principles you’ll need to master when creating a healthy culture.
Start crafting a culture that works