What Is a Company Culture? (+ How to Establish a Successful One)

A company’s overall culture, work environment and atmosphere play a large role in employee satisfaction. By having a strong rapport with colleagues, a supportive management structure and a comfortable office environment, you can ensure your employees are able to excel. As company culture is becoming more important to job hunters, fostering it for your teams is in the best interest of your company. 

Company culture can influence the way employees work, resolve conflicts and grow, greatly affecting their output and overall productivity – in fact, did you know that companies who prioritize company culture have 33% increases in revenue on average? Culture contributes to overall company success – in today’s article, we’re going to show you ways you can foster a positive company culture.

A ‘good’ company culture is made up of many different features that go beyond the office environment. If you are looking to improve your organization's culture, you need to consider the company as a whole. Things that contribute to a company’s culture include

Clear Vision and Mission

Many companies state their vision and mission on their websites, but actually, the mission of a company should also be embodied by its employees. Having a strong, clear company mission is key to keeping employees aligned and motivated, as it provides a sense of meaning and fulfillment. By keeping the company vision and mission central to company culture, employees can feel a sense of belonging to their work and goals. This can be stated in a short phrase, paragraph or presentation which incorporates company values and mission.

Respect and Inclusivity

Diversity, Equity, and Inclusion (DEI) plays a great role in the modern workplace. A safe working environment fosters rapport and teamwork naturally, but by also upholding standards for a respectful and inclusive culture, you can ensure all employees feel like valued members of their team. DEI principles underpin many company dynamics in modern workplaces, as they greatly contribute to an employee's overall satisfaction. Additionally, a company with strong DEI programs and principles is greatly sought after – 76% of people will consider DEI when applying for jobs.

Transparency and Open Communication

Open communication is one way to foster a strong company culture. Encouraging people to share their opinions fosters teamwork and connections between employees. Being heard and having your ideas listened to is also a great way to foster a sense of belonging and make employees feel appreciated. Also, having policies to encourage open communication can reduce conflict and tension, as people will speak up before issues arise. 

Accountability and Ethical Conduct

Although it is great to encourage positive behaviors in the workplace, company culture also relies on being able to reduce or handle negative or unethical behaviors as well. Not only do accountability and ethics keep people safe, but it also provides peace of mind for employees. Accountability and ethics can be implemented with company policies, training programs, and workflows for reporting behavior that is unethical or unacceptable. By having a strong system in place to handle unacceptable or unethical behavior, you can be sure that employees feel safe and supported.

Recognition and Reward

Acknowledging and celebrating employees' efforts and rewarding their successes is a great way to motivate employees and boost morale. Recognition and rewards are one way to continuously show your appreciation to your team, and encourage them to keep striving towards improvement. Lack of recognition for your employees' efforts can lead to disengagement, and reduce productivity of your team. By showing appreciation and rewarding employees for their work, you are ensuring that both productivity and morale are kept high.

Professional Development and Growth 

Fostering an employee's professional growth is essential to a positive workplace culture. If an employee feels supported in their professional growth, they are more inclined to stay with their company to progress through the career ladder. Fostering professional growth can improve company culture by improving employee engagement, leading to overall positive morale. Professional development also involves leaders and team members collaborating on projects or providing mentorship, which also improves employee rapport. 

Company culture plays a role in every facet of an employee’s day-to-day experience of their job. Not only is company culture relevant to employees but is also a part of your company’s overall reputation as well. Every company’s organizational culture is unique, but there are still ways you can ensure your employees are subject to an overall positive culture. Here is exactly why an organization's culture is important: 

It Influences Employee Performance

A great company culture makes employees feel valued and appreciated; which then improves their engagement and productivity. Additionally, workplace culture is also shaped by factors like its leadership team and work-life balance; all of which contribute to an employee’s productivity as well. If an employee feels valued and respected in their workplace, it will lead to greater employee satisfaction. Likewise, if your company culture rewards successes, your employees will be more inclined to produce higher quality work and reach goals. 

It Attracts Top Talent

A positive company culture is not only important to current employees; but also to prospective employees as well. Did you know that 88% of job seekers consider a healthy company culture key to their success? Therefore, a strong culture can help you build a positive reputation and company image, which can be used to your advantage when trying to attract talent to join your company. Attracting top talent is also a key part of your organization’s success, growth, and productivity as well, as you can expand your team faster. 

It Retains Top Talent

Company culture highly influences employee job satisfaction, so building a corporate culture that is supportive and positive can improve employee retention and reduce turnover. Research by Oak shows that 61% of employees have resigned due to a toxic company culture – meaning that a healthy culture is key to employee retention. Likewise, if your company culture values professional development and growth, you are likely to keep employees for longer, as they see the value in staying loyal. Upskilling your talent with professional development is one way to ensure you have a high-performing team. 

It Drives Business Success

A strong organizational culture is correlated with improved business outcomes. Company culture influences every aspect of a business, and will therefore influence business success. Did you know that 47% of companies with very successful company cultures experience significant revenue increases compared to ones with average or poor company cultures? Developing company culture is directly related to a company’s success – so evaluating your current culture could lead to improvements for employees and the company. 

It Enhances Innovation

A positive company culture that supports employee growth and development will allow employees to upskill, gain mentorship from peers, and develop as professionals. By encouraging skill development and collaboration, employees will become more innovative and creative, further improving business outcomes. If company culture allows employees to invest in their careers and skills, the business will benefit from it. Successful companies are constantly innovating, and this is reflected in company values. 

Companies should strive to have an overall positive and supportive company culture; however, there are many ways to achieve this. Choosing the right company culture is critical to improving the overall dynamics of a company, and will allow you to foster positivity and improvements for your employees and in the business. Here are some of the types of company culture for you to consider: 

1. Clan Culture

Clan culture is a type of organizational culture that encourages a collaborative working environment through the active participation and input of all employees. Clan culture is often seen as a ‘family-like’ corporate culture, which is very horizontal and often makes decisions based on consensus, valuing equal input from all employees.

Key Features

Clan culture is non-competitive, collaborative and flexible in nature, and does not impose any strict rules on its employees. There is some corporate structure, but there is no rigid or formalized structure enforced by leadership. Employees interact and collaborate freely with senior management and leaders, and oftentimes employees collaborate on projects. 

As for the atmosphere, companies who adopt clan culture feel very casual, and there is often no strict dress code, meeting agendas, or strict rules, as well as flexible working hours, as clan culture values trust. Many startups adopt clan culture in their early stages. 

2. Adhocracy Culture

Adhocracy culture comes from the term ‘ad-hoc’ which means to do tasks as they arise. Therefore, adhocracy culture is a form of company culture that allows individual employees to do tasks independently, based on their skill set. 

Key Features

Adhocracy culture focuses on innovation, autonomy and initiative. Roles in a company that employs an adhocracy culture are not rigid; instead, leadership and ownership are given to employees based on their skills. Employees are given freedom and autonomy over their tasks and roles, and are allowed to utilize their creativity in finding solutions or driving outcomes. Giving this sense of ownership to employees also leads to better employee satisfaction. 

Adhocracy can also easily become disorganized, as team members become too engrossed by individual projects, and can cause some division and lack of cohesion between teams. It is also hard to define roles in an adhocracy workplace, and this can pose issues in the interview process. Additionally, giving ownership and autonomy can mean that tasks and ideas do not have an approval process, meaning time and money can be spent on ideas that are not beneficial to the company. 

3. Market Culture

Companies that employ a market culture strive to outperform competitors and maximize profits. An organization with a market culture is incredibly results-oriented and focuses on the output and productivity of individual employees. As market culture is a high-performance culture driven by results, it means that there is often a more rigid structure in place to ensure that goals are met. 

Key Features

Market culture is based on the success of your company and its ability to gain a competitive advantage. Company success is results-oriented and will evaluate the business performance, employee accomplishments and output in detail. As market culture is defined by success and profits, there is a strong emphasis on the customer and product, and companies will focus on the experience of the customer and product quality. 

4. Hierarchy Culture

As the name suggests, a hierarchy culture is one that has a rigid structure with distinct levels of authority, especially for a leadership team. Employees know who they are managed by, what their job duties are and what rules they are required to follow. Industries such as finance and healthcare are known to employ this form of robust culture. 

Key Features

A hierarchy culture has a formalized leadership team, where leadership is a top-down structure starting from the CEO. Every level of leadership has a distinct level of authority that they exert over their team members, as well as a level of decision-making control. Hierarchy culture also follows distinct rules and policies, which every employee must adhere to, due to safety or legal reasons. Additionally, there are set goals and expectations in this type of company culture, which are apparent to all employees.

Establishing a successful company culture that reflects your business goals and promotes a positive working environment requires some thoughtful decision-making. According to Harvard Business Review, changing company culture involves input from everyone. Here’s how you can achieve your desired culture: 

Decide on Leaders

Forming a team of leaders who embody the organization’s values and are committed to the success of the business is key to setting up a strong organizational culture. Leaders will influence the daily atmosphere of your workplace, so getting experienced, motivated, and skilled leaders who can drive teams to success is essential. Leaders influence how an organization operates, so leadership training and hiring should be done with care.

Develop Core Values and Mission

A set of your company’s values and a mission statement forms a central part of an organization's culture. A company’s core values should reflect what motivates the company towards success, as well as expectations for behavior and attitude. Core values can include collaboration, innovation, and mutual respect, and should underpin all business operations. A company’s mission statement is a short paragraph or story which states the goal of a business and is used to align employees with the business goals. 

To achieve a list of core values or to form a strong mission statement, you can ask for the input of your employees and leaders. You can do an employee survey for input, or hold a team building event to allow everyone to add their ideas. 

Implement Policy

One important player in setting a strong organizational culture is your HR team. Company culture is about structure, leadership, and environment, but it is also about ensuring your team feels supported and respected. Make sure your HR team is involved in all discussions surrounding company culture, as well as setting and enforcing policies, rules, and values. Additionally, HR can be involved in setting expectations for behavior, as well as setting up procedures for violating company rules. 

Reinforce Culture Daily

You can set up company values, expectations, and a leadership team; but enforcing them is what will make changes to company culture stick. Every leader and employee should be reinforcing company values and the organization’s beliefs daily in both their work and attitude. Establishing company values can be done in daily routines, such as meetings, and through daily interactions between your employees. You can consider assigning roles such as ‘cultural ambassadors’ or a ‘cultural committee’ to ensure that every employee is aware of company values and processes.

Monitor and Adapt 

You can assess adherence to cultural policies by monitoring incident reports, reviewing productivity, or surveying and gathering employee feedback. Although establishing a strong company culture is beneficial to both employees and businesses, making too many changes to company culture can lead to issues. Likewise, some cultural changes might not be effective or realistic for your company – if this is the case, adapting some policies might be necessary. Involve managers and leaders in the discussion of evaluating company cultural changes, and see if they can provide any unique insights. 

Organizations that encourage teamwork and collaboration, protect employee well-being, and encourage professional development are more likely to have teams that are productive and happy. An effective company culture is one which embodies the needs of both the business and its core values, whilst maintaining employee happiness. A positive company culture values attitudes of respect, inclusivity, and teamwork, and strives towards success. Depending on the size of your team, the goals of your company, and the leadership structure you want to employ, you can choose from a range of common company culture styles. If you want to learn more about setting a positive organizational culture, check out Cake for more advice!

--- Originally Written by Bronte McNamara ---