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Why company culture matters

Written 21 January, 2019, 5 minutes to read

Company culture is a massive deal and should be permanently at the top of your business agenda. Why? Because it’s singularly responsible for building corporate reputation, team engagement and sustained productivity. It works in exactly the same way in a business setting as in a social one; as the backbone unifying individuals into a community.

Just as people engage with culture in their personal life to enrich their sense of identity, so too do they seek harmony with the values of their employers. Without a strong, positive culture, you stand to drive employees away and miss out on the best talent. Here’s exactly why company culture matters and how to build a really robust one.

What is company culture?

Company culture is defined as the values, practices, and beliefs shared internally by employees, staff and managers, and reflected externally to clients, customers, stakeholders, vendors and so on. Think of it as the DNA of your corporation, informing behaviors across your entire team.

From hiring practices, to how people work on a day-to-day basis, to decision-making, to flexible policies – company culture often dictates the ‘rules’ in perhaps unwritten but very real, tangible ways.

Without a strong company culture, you either end up with a general feeling of negativity – driving excellent employees away and putting off prospective new ones – or a clash of antagonistic ideas and approaches from different workers.

Employees really care!

Many studies have shown that employees care about company culture, and that their relationship with it can make a big difference to their motivation at work. When workers don’t adapt well to a certain culture, they’re much more likely to either become disengaged or quit altogether. Meanwhile, if an employee adjusts well, they’ll contribute more, build better relationships with colleagues, and stay longer.

Additionally, when workers believe their contributions are valued and they’re acknowledged for hard work, their motivation to excel is elevated – even more so than employees who are better compensated.

If you’re still not convinced, here’s even more food for thought on the strength of company culture:

  • Happy employees are 12% more productive.

  • Companies that offer generous maternity and paternity leave enjoy better employee retention.

  • 90% of employees believe their well-being programs positively affect work culture.

  • 86% of employees between the ages 18-34 said they’d be more likely to take a job if it offered remote work options.

  • 70% of variance between "lousy", "good" and "great" cultures can be found in the knowledge, skills and talent of the team leader.

Culture, employee happiness and productivity

Let’s focus on that last stat for a moment – that link between company culture, employee satisfaction and increased productivity.

The reason for this is simple:

  • unhappy or unsatisfied employees don't tend to do more than the minimum
  • great workers who feel unappreciated will quit
  • managers who don’t promote good ethics often negatively affect workers and productivity.

Once you think about it, it really makes sense. Fostering a great business culture will not only increase employee happiness and productivity, but it will sharpen your edge when competing with other businesses for new talent. From your website and social media pages to Glassdoor reviews, there’s a ton of public information on your company out there steering the decisions of your potential employees.

Building a healthy company culture

This is all very well, but what does a healthy company culture actually look like?

Google immediately springs to mind: 86% of its employees say that they’re satisfied with their jobs, and it’s one of the top companies to work for according to Glassdoor. Why? It largely comes down to flexibility: employees are encouraged to work when they like and how they like, which builds a huge sense of trust. They also prioritize collaboration – so much so that employees are encouraged to coach each other in the ‘Googler to Googler’ programme.

But they clearly also have interests outside of themselves – Google is know for its big philanthropic ventures, providing financial aid, volunteering time and just generally helping out where they can. They’ve nailed their public PR when it comes to broadcasting their company values far and wide.

You might also think of Mars, Inc. Their Five Principles – Quality, Responsibility, Mutuality, Efficiency and Freedom – unite and guide their corporate culture for more than 100,000 Mars Associates around the world. They, too, have translated their corporate culture message through great working policies and opportunities, including flexible working schedules, bring-your-dog-to-work programs and schemes such as the Mars Volunteer Program, which supports underprivileged communities.

Yes – these are both corporate giants, and not everyone has the same resources available to publically amplify their values, but the foundations of good culture don’t require that. Ultimately, you just need to create a community that feels supported, represented, trusted and valued. Listen to what individuals need, offer useful and considered rewards, set structures for responding to difficult issues and attacks on your culture, and champion meaningful opportunities over pointless gimmick.

It basically comes down to having a soul! See our tips on how to build a thriving culture here.

The true test of company culture

Companies like Google and Mars, Inc. set the bar high, but keep in mind that company culture and employee happiness are a work-in-progress. There’s always more to do, since your team’s needs don’t exist in a vacuum. The real test of a strong culture is its ability to respond and adapt to change.

The best thing to do is to make culture as important as your business strategy. Constantly revisit it, keep discussions open and recognize everyone’s role in building it. While company culture is one of your most important responsibilities as a business leader, realize that it is not something that can be decided and imposed from above – you need to ensure everyone in your company has the opportunity to engage with it and shape it.

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