What is Company Culture? Importance and Best Practices

How does a thriving company culture make businesses more successful? Why is company culture such a hot topic? Companies develop personalities over time. This statement is true whether you have a brick-and-mortar location or you are operating a digital workplace. It is what the term “company culture” refers to. It incorporates the company’s mission statement, as well as its values, ethics, and goals. This article will explain the importance of company culture as well as how to build one for your company and how to improve your existing one.

What is Company Culture

What is Company Culture?

Some types of companies have a very traditional and conservative culture. Banks and law firms tend to fall into this category, since these industries are governed by a number of regulations that must be followed precisely. They may operate from a top-down management style, where decisions about how the company is going to operate are made by a few people at the top management level. Information in this company culture definition flows down and workers generally don’t have a lot of influence on how the company is being run.

Companies focusing on creative pursuits, such as advertising or design, are less likely to be conservative. Along with their relaxed style, they may also use a more casual approach to their day-to-day operations.

Neither of these company culture types is better or worse than the other — on their own. Both of them can be effective and used to run a successful business.

In terms of current and prospective employees, company culture makes a significant difference in job satisfaction. When an employee feels that they fit well into the existing company culture, they can feel comfortable and focus on contributing to the best of their ability. If the company culture is not a good fit, however, an employee may not feel entirely comfortable. They may end up moving on from that employer relatively soon in search of a company that is a better fit.

 

The Core successes of Company Culture

Organizational culture differs in every business and there are many company culture types. But the core values remain the same. To be successful a company should put its employees first while respecting the needs of the business.

The 6 core successes of company culture are:

  1. Listening to ideas and opinions
  2. Encouraging people to ask questions
  3. Trusting employees to make accurate decisions
  4. Promoting team spirit
  5. Integrating relationships
  6. Providing efficient employee engagement and communication platform

 

Why would an employer be concerned about its company culture definition?

When hiring workers, it is not uncommon for an employer to ask a candidate to describe themselves briefly. The employer also needs to be prepared to do the same for the candidate to help determine whether a person would be a good fit, as well as evaluating their skills and experience.

Since the company culture is the guide to the employer’s values and expectations, it also addresses how the work should be performed. For example, all internal communications are considered confidential, whether they are communicated through the company intranet platform, orally, or as part of written correspondence.

 

Why is Company Culture Important?

There are several reasons why company culture is important. Some of these benefits are discussed below:

 

Company culture defines the company’s identity

The company culture establishes exactly how the people in the organization are going to interact with each other. It also sets out how the business will conduct itself with suppliers and its customers. These core company values become part of the company brand because they are reflected in everything the company does.

Company culture is also important for the future of a business. The best kind of company culture constantly evolves and asks questions such as:

  • How are we doing?
  • What are we doing right for our employees?
  • What can we do better for our employees?
  • Do our employees have the right tools? (e.g. internal communication platforms)

 

It can transform your employees into your most powerful advocates

One of the benefits of good company culture is that it becomes a calling card for your business. When your employees feel valued and appreciated, it is going to show in the way they perform their duties. It also becomes obvious in the way they interact with everyone they come into contact with.

It’s important to recognize employees who are doing their work well. The best company culture is one where people feel they are contributing and that what they are doing matters.

 

It helps you attract and retain the best employees

A company culture that is focused on looking after its people is going to keep its employees engaged in their work. They will want to stay with the company for the long term instead of moving on after a short time. These employees will turn into your company’s biggest advocates as you are building your brand.

 

It transforms individual workers into a team

You need your employees to move away from the WIIFM “What’s In It For Me” mentality. They need to work together for your business to be successful. Obviously, one of the rewards for an employee working for the company is financial. The feeling of belonging to a group is another benefit that comes from positive company culture.

 

A healthy company culture has a positive effect on employees’ wellbeing

When employees are healthy (physically and mentally), they are able to respond to the stresses and strains of modern life more easily. As a result, their job performance will be better than workers who are in an unsupportive environment.

 

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How to Build a Company Culture?

Since your company is going to develop its own culture whether you step in to guide it along or not, you may as well take steps toward building a positive workplace culture. This is a task that is not going to be accomplished overnight, so be prepared to devote some time and effort to it.

 

1. Decide on your company’s main values

What are the most important words you want to have associated with your business? If you could describe it in a few words, which ones do you want your customers (or the public in general) to think of when they picture your sign or logo? These are your company’s main values. They tell a story about the way you want the world to see your business and its employees.

 

2. Hoose goals for your company culture

These goals are not associated with selling a certain number of units or reaching a specific level of sales during a quarter. Instead, they have to do with the reasons you started your company initially. How did you want to make a difference when you decided to strike out on your own? These words or a phrase are the goals for your company culture.

 

3. Get everyone in your company involved

Employees are a key component in building company culture. If the employees generally feel good about the company culture, then their productivity will increase. As an employer, there are some things you can do to help this process along.

Be sure to let your employees know that you appreciate them and their work. Take time to say “Hello” to them when you see them. Let them know when the company is reaching its goals and thank them for their contributions.

Find out what kinds of things motivate your employees to continue doing their best. Not everyone is motivated by money (and you may not be in a position to offer your employees salary increases across the board). However, you may be able to offer other incentives that your employees might like, such as extra time off from work instead.

Great company culture also comes from the benefits a business offers its employees. Company culture is changing fast as employers offer perks such as:

  • Free drinks and snacks
  • Events (barbecues, parties, sports matches)
  • Weekends away
  • Competitions
  • Relaxed office environments with games and comfortable chairs for downtime
  • Gym/swimming pool membership

Offering these benefits as part of the working day promotes team spirit and builds a positive workplace culture. We spend so much of our lives working, so it should be enjoyable.

Part of being a good employer is providing help and support for employees when they need it. An employee who is going through a period of personal or professional challenges will appreciate an employer who is prepared to be flexible while the employee deals with the situation.

 

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How to Improve Company Culture?

If you have decided that you want to improve company culture, you will need to be proactive. The following are some suggestions you can use to change the culture in your business for the better.

 

1. Set an example from the top down

Behaviors that are contrary to the company culture you want to see in place must be stopped. You can’t have an environment where rules and regulations exist for some employees but are ignored for others. If you have been guilty of being somewhat lax about following the rules yourself, now is the best time to start following them more closely as an example for all employees.

 

2. ”Catch” your employees modeling the behavior you want them to continue to do

When an employee is demonstrating the behavior you want them to continue doing regarding your company culture, reinforce it by thanking them for it or acknowledging it in another positive manner. The employee will continue to behave similarly and others will be inspired by his example.

 

3. Be prepared to provide feedback

Tell your employees how they are doing in their efforts to improve company culture. Start by letting them know the areas where they are succeeding in this regard. Then bring up anything that requires their attention as far as areas of improvement. Finally, you want to reiterate that everyone is working together to put the company culture best practices into effect and that you appreciate the employee’s efforts to help. It’s important to end the feedback session on a positive note.

How can you monitor your company culture to determine whether your efforts have been successful? There are a few KPI (Key Performance Indicators) that you can track to find out whether you are doing well or if you still need to fine-tune your efforts.

 

4. Employee Turnover Rate

After you have taken the time and made the effort to change your company culture, has your retention rate remained the same or has it dropped? There will be some employees who decide to change jobs that have nothing to do with the company. It’s still possible to make a bad hire, no matter how carefully you screen candidates in advance.

If, however, the employee turnover rate continues to remain consistent or rise over several months or a year, it can be a sign that there is something amiss.

 

5. Employee and Manager Satisfaction Survey

If you really want to know how your employees and managers feel about working for your company, ask them in a confidential survey. Let them share whether they are using their skills effectively, if they are being supported appropriately, and whether they have enough opportunities for training. The answers to those questions will help you fine-tune your company culture more effectively.

This is the type of employee engagement that can help you make improvements in your company policies. The key is getting honest responses. Your employees and managers need to have confidence that their responses will be kept confidential. An online survey would allow everyone to share their thoughts freely. It is an excellent option for a digital workplace, since all participants can complete the survey at their convenience.