The definition of the term “company culture” has never been clear.
To add to that, the pandemic has introduced hybrid workplaces, which drove entrepreneurs, startups, and large companies to a culture change. And today, corporate culture is not just in the office as it dictates the quality of life of an employee.
A proper understanding of corporate culture is necessary for effective leadership, employee engagement, and gaining a competitive advantage over the competition.
But what is corporate culture?
What is Company Culture?
Company culture can be described as a set of shared values, attitudes, and behaviors that are present in a work environment. It determines how people feel about their work and how employee experience aligns with the company’s values.
There are four types of corporate culture:
- Clan Culture: This type of workplace prioritizes communication and is heavily people-focused, where the managers act as mentors.
- Adhocracy Culture: This is an adaptable and entrepreneurial work environment that often values risk-taking, creativity, and individuality.
- Market Culture: Market culture is a results-oriented work environment where the bottom line is prioritized.
- Hierarchy Culture: There is little room for adaptability and change, with more well-defined processes and uniformity.
A strong culture is based on every employee understanding the expectations and acting accordingly. The company’s values can be reflected in an office setup, employee benefits, dress code, business hours, and hiring decisions.
Now that you have a better understanding of company culture, you can start building your own.
How to Develop Company Culture?
Creating a strong culture will contribute to the company’s success, but how do you kickstart your own cultural initiatives?
Let’s find out.
Step #1: Establish your company’s core values
The first step in creating a culture is setting your company’s values.
Talk with your leadership team about what core values you want to incorporate into your culture. Define these values clearly, as they will serve as a foundation for your organizational culture.
Remember: Core values are just words on paper unless you put them into action.
Step#2: Set culture goals
Your business sets a goal for everything; culture should go through the same process.
Think about the fundamental idea behind your company, then try to find ways to bring these core values to life.
While some goals sound grandiose, like Zappos’ “Live and deliver WOW,” they act more as aspirational messages that define the companies and might align with some people’s ideals.
Step #3: Demonstrate appreciation for everyone
Employees are the ones most impacted by your organization’s culture and can give feedback on what can be improved or what they like about the existing culture.
Initiate conversations with your team members and use their insights to drive your corporate culture initiatives. This way, you will build a work environment that fits your goals at the same time as being appreciated by your employees.
Step #4: Create company culture guidelines
There are some guidelines your employees need to follow to ensure that you do not foster a work environment that permits people to get away with improper behavior.
You can avoid this problem by:
- Reinforcing the behavior you want to see
- Setting an example
- Making sure you provide feedback
Step #5: Measure the progress
Creating a corporate culture takes time and effort but it can build lasting partnerships.
However, don’t get discouraged if your attempts at building a corporate culture don’t produce the desired employee experience right away.
It’s important to get regular feedback and by monitoring the right metrics, you can find where your culture fits.
Elements of Company Culture
While no corporate culture looks exactly the same, there are some universal best practices you can follow to ensure a healthy culture by having:
- A diverse and inclusive workforce.
- An environment that supports collaboration, communication, and teamwork.
- A strong focus on psychological safety, which helps people express their opinions without being degraded or shamed.
- Employees who are recognized and rewarded fairly for their accomplishments.
- A corporate culture that offers plenty of opportunities for professional growth and development.
- Trustworthy management, which has a positive impact on employee retention.
- A corporate culture that offers workplace flexibility.
- Workers involved in the decision-making process, greatly influencing the culture.
- An organizational culture that engages in a healthy work-life balance and cares about employee well-being.
- A business that fosters a culture of learning that improves productivity and drives innovation.
These elements can be easily overlooked, but use them to build your own culture.
Why is Company Culture Important?
Company culture impacts every aspect of your business. A survey from Jobvite found that 37% of employees ranked company culture as “very important.”
Company culture has many benefits, such as:
1. Employee retention
A company’s success depends on its ability to attract and retain top talent. Culture has a direct impact on retention, with 35% of employees turning down the perfect job if they don’t feel it is the right culture fit.
2. Customer satisfaction
Many studies confirm that employee satisfaction has the same effect on customers. Companies where employees rank their culture highly are 34% more likely to have five-star reviews from clients.
3. ROI and Profitability
Employees are satisfied with the workplace culture. Customers are satisfied with the services your company provides. This can result in a better return on investment (ROI) for companies with great corporate culture, compared to those who don’t invest in their company values.
4. Better productivity
With a positive company culture, employees have a good experience at work. They feel better about going to work every day and are emboldened to speak up and share ideas.
5. Greater employee engagement
Engaged workers drive positive business results. Highly engaged employees outperform their rivals by 10% and have a 41% lower rate of absenteeism.
As you can see, the right approach to corporate culture can reap many benefits—so don’t neglect it.
Over to You
As you’ve read, company culture is beneficial to ensuring employee engagement and retention.
Any business can create a positive and cohesive work environment by creating a sense of belonging and demonstrating recognition and appreciation.
To achieve that, learn more about human resources by exploring our HR Glossary.