What is Great Company Culture (And Why Do You Need It)?


HR Insights for ProfessionalsThe latest thought leadership for HR pros

Wednesday, January 10, 2018

Companies that invest in developing and nurturing their culture, benefit in many different ways.

Article 4 Minutes
What is Great Company Culture (And Why Do You Need

From increased productivity to cost savings associated with lower employee turnover, developing a great company culture is a large priority for many businesses across all industries.

Although company culture is a concept that’s been around for a while, the rise of Silicon Valley has placed more emphasis on the importance of company culture in a successful business.

What is company culture?

A company’s culture is unique in the sense that it is specific to the company and cannot be copied. Culture involves much more than the kind of people that work for a business, it is about how companies do things, having defined visions, values and behaviors and the sharing of beliefs.

The Virgin brand is renowned for breaking the mould when it comes to culture and is often aspired to. How did they achieve this? CEO Richard Branson describes his approach quite simply:

“There is no magic formula for great company culture. The key is just to treat your staff how you would like to be treated.”

Why do we need a great company culture?

According to Deloitte, 86% of respondents to their 2016 Global Human Capital Trends survey rated corporate culture as ‘important’ or ‘very important’ to business success. So there is clearly a large majority of businesses who have benefited from the value that culture adds to their overall proposition.

Companies can invest in the latest technology and develop the most efficient processes but if the culture isn’t working, you will not see the business results that you are targeting.

Mark Miller, VP of Marketing at Emergenetics International describes culture as a unique value proposition that you hold over the marketplace. So, in addition to having several internal benefits, culture can be a highly effective external marketing tool.

In terms of the internal benefits, having employees that enjoy working within a company culture will influence how long they stay working for that company. Developing a good company culture will therefore increase employee retention, and therefore more likely to keep hold of their talent.

For similar reasons, the company should also be able to attract a higher caliber of job applicants, as more people will be keen to work for a business with a good culture.

How do you change a culture within a company?

Changing the culture within an organization is no easy task. A good starting point would be to evaluate the existing culture. There are many metrics that contribute towards this evaluation but Sarah Landrum of Business.com suggests that adaptability (to change), personal wellness, comfort level of the working environment and feeling recognized/supported are the key areas to focus on.

Culture is often discussed synonymously with engagement, however if you focus purely on improving engagement, you can miss out on some of the key drivers of establishing a great culture. Many HR professionals have made the mistake of thinking that employee incentive schemes are the main ingredients of a strong company culture. Mission and value alignment and employee accountability are other factors that define a culture and would not necessarily be considered a key aspect of employee engagement.

In an article published by Forbes, author Erika Anderson shared five steps to change company culture:

  1. Start on the same page (agreeing on a common definition for culture)
  2. Define the core values
  3. Add clarification to the values (how the values look in real examples by adding behaviors to each one)
  4. Review the behaviors (to prioritize and make them simpler)
  5. Implement across the organization (through communication and integration plans)

How do you integrate the culture change?

A good way to help with the integration of company culture into the organization is to involve employees along each step of the journey. So you may want to take suggestions for values, or put different options to the vote. When defining the behaviors, ask people in different roles to identify how they interpret the behaviors and how they would apply them in their everyday tasks. This level of involvement will help employees feel a part of the shaping of the culture, rather than feeling that they are being told how to behave.

The success of any type of change within a business is defined by communication and engagement with employees. Choosing the most effective communication tools and understanding what works best for the existing culture will determine the success of the culture change.

CIPD offers guidance on developing an effective change communications strategy. They outline the key principles as being:

  • Built on a shared sense of purpose and aligned to business strategy
  • Supported by senior leadership
  • Driven by genuine dialogue
  • Requires good people management
  • Draws on a range of digital channels and tools
  • Is reviewed and measured for its effectiveness

If your company has the framework that will enable all of those principles then you are in a good position to implement culture change and start to gain the many business benefits.

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