Building a desirable company culture - A comprehensive guide
What is company culture?
A company’s culture is the shared values, beliefs, behaviors, and customs that shape an organization and its interactions with employees, customers, and stakeholders. It encompasses the organization's mission, vision, and goals, as well as the behaviors and practices that are reinforced and rewarded within the company. A strong company culture leads to increased employee engagement, improved customer satisfaction, and better overall performance.
“Culture is not the most profound thing in the world. It is not the solution to every problem. But it is the foundation upon which more profound things and solutions rest.” - Simon Sinek, Leadership expert
Different types of company cultures
Depending on what a company values and encourages, it can have a unique culture. It may be good, bad or just different. You can however broadly classify the prevalent workplace cultures as follows:
1. Hierarchical culture
In this type of culture, there is a strong emphasis on following rules and procedures, and employees are expected to follow the direction of their superiors. This type of culture benefits organizations that value a clear separation of power between different levels of management and employees. For example, military, healthcare, banking and so on.
2. Participative culture
In a participative workplace culture, employees are encouraged to play an active role in the decision-making process. In this type of culture, there is often less emphasis on hierarchy and a more equal distribution of power among employees.
Consulting firms, such as McKinsey & Company where teamwork and collective problem-solving are valued embrace this type of culture.
This type of culture fosters a sense of empowerment among employees, but it may also lead to a lack of clear decision-making and accountability.
3. Innovative culture
An innovative workplace culture encourages and fosters creativity, experimentation, and risk-taking among its employees. In an innovative culture, employees are empowered to think outside the box and challenge the status quo. They are encouraged to take calculated risks and are provided with the resources and support they need to bring their ideas to fruition.
Leaders in an innovative culture often promote a climate of experimentation and learning and are open to change and new ways of doing things. Such a culture is beneficial for companies and organizations looking to stay competitive and adapt to an ever-changing business environment - for example, technological companies like Google, Apple and Amazon.
4. Competitive culture
A competitive workplace culture is one in which there is a strong emphasis on individual achievement and success. In this type of culture, employees are driven to outperform their colleagues and be the best in their field. There is often a focus on individual goals and targets, and employees are rewarded for their performance.
This culture benefits companies that operate in highly competitive industries such as investment banking, pharmaceutical sales and hedge funds. However, it also leads to a cutthroat and stressful work environment, where employees may engage in unhealthy competition. Also, collaboration may be unconsciously discouraged.
5. Collaborative culture
A collaborative workplace culture promotes employees working together in a supportive and cooperative environment. In this type of culture, employees share their ideas, knowledge, and skills, and work together to achieve common goals. There is a focus on teamwork, and employees are rewarded for their contributions to the team.
Collaborative cultures foster a sense of community and belonging among employees. They help to build stronger relationships and trust among team members. Worker-owned cooperatives and marketing and design agencies are some great examples of companies with collaborative cultures.
6. Entrepreneurial culture
An entrepreneurial workplace culture fosters an entrepreneurial mindset and spirit among its employees. It is characterized by innovation, rapid growth, and risk-taking, and is focused on identifying and seizing new business opportunities. Here, employees are encouraged to think like business owners and take the initiative to drive growth and success for the company. For example, startups, small businesses, venture-backed companies and family-owned businesses.
7. Stable culture
A stable culture promotes predictability, consistency, and minimal change. There is a clear set of rules, procedures, and expectations for all employees. There is also a strong emphasis on maintaining the current business operations and avoiding unnecessary risk.
It benefits companies and organizations that operate in industries that require a high degree of consistency and predictability. For example, government agencies or utility companies. This type of culture provides employees with a sense of security and stability, knowing what to expect from their work environment.
8. Learning culture
Constant learning is the fulcrum of a learning culture. As a result, training and development are valued and integrated into the daily operations of the organization. Learning culture can be found in industries such as education, consulting, technology and financial services.
One of the primary advantages of this culture is that it enables your workforce to adapt to changing business needs.
Remember that companies can have a mix of multiple cultures and some of them have different cultures in different departments or locations. The culture at companies can also change with time.
What are the characteristics of a company’s culture?
The characteristics of a company’s culture are the elements the culture is made of. It could be the little or big things you see or experience when you work at a company.
1. Values: Company values are the guiding principles and beliefs that shape the way a company operates and interacts with its employees, customers, and the wider community. They serve as a framework for decision-making and behavior within the organization. Examples: Integrity, customer focus, responsiveness, sustainability, transparency and so on.
2. Norms: Company norms are the unwritten rules and expectations that govern behavior within an organization. It's usually important for employees to understand and comply with these norms to fit in and be successful within the organization. Examples: Communication styles, Decision-making processes, Dress code, Social interactions, Meeting practices and so on.
3. Customs: The traditions and practices that have developed over time within the organization. For example, a healthcare company focused on employee well-being can offer different fitness programs such as dance classes and meditation sessions.
4. Symbols: The visual and tangible representations of the organization's culture, such as its logo and office design. Examples: Logos, mascots, taglines, slogans and the brand’s color schemes.
5. Language: It’s how language is used and understood within the organization Examples: common jargon and acronyms, level of language proficiency expected from employees, formalities expected, and so on.
6. Assumptions: The underlying beliefs and attitudes that shape how people within the organization view the world and their work. These assumptions could be about a company's goals and priorities, culture, priorities, future, and so on.
7. Celebrations: Recurring activities and ceremonies that mark important events or milestones within the organization. Examples: employee birthdays, individual or team achievements, local/global festivals, and so on.
8. Heroes: Individuals within the organization who are held up as role models and exemplars of the organization's values and culture.
9. Climate: The overall emotional and psychological atmosphere of the organization, as perceived by the employees.
10. Outcomes: The tangible results that an organization achieves as a result of its culture, such as productivity, employee engagement, and customer satisfaction.
11. Communication: This is how information is shared and ideas are exchanged within the organization.
12. Leadership: The style, approach, and beliefs of leadership and management within the company.
13. Diversity and inclusion: The degree to which the company promotes and values diversity among its employees.
14. Flexibility: The level of flexibility and adaptability of the company's policies and procedures.
15. Employee innovation: The extent to which the company encourages and fosters creativity and innovation among its employees.
16. Employee engagement: The level of employee involvement, commitment, and satisfaction with their work and the organization as a whole.
17. Customer focus: The degree to which the company prioritizes and values the needs and satisfaction of its customers.
18. Ethics and social responsibility: The company's approach to ethical behavior and its impact on society and the environment.
19. Technology: The technology opted for by the company to facilitate a conducive work atmosphere for employees. It starts with simple and smart everyday tools that employees seek.
The benefits of having a strong company culture
A company’s culture is intangible. Yet, it deeply affects employees’ experiences, business outcomes, and the moral fabric of the company. Let’s look at the key areas impacted by organizational culture.
1. Reduced turnover: A trust-winning culture leads to improved employee satisfaction, loyalty and a lower turnover rate. In the long run, it saves the organization money and resources and helps build a community of loyal employees who bring their best to work each day.
2. Outstanding employee engagement and commitment: When employees experience a positive company culture, they engage better and work efficiently. As a result, there is increased productivity and guaranteed job satisfaction.
3. Exceptional recruitment and retention: The famous Hubspot culture code cannot be truer - "Culture is to recruiting, as product is to marketing." A well-defined culture helps attract the right people to the tribe and retain them. In this day and age, people look for more than money from a job. They value work friendships, professional growth, mental health, social responsibility and the list goes on.
4. Enhanced decision-making: A well-defined culture acts as a guide for decision-making, helping employees to understand the organization's values and goals, and making it easier for them to make decisions that align with these.
5. Better communication: An open organizational culture strengthens effective communication among employees, which results in improved collaboration and problem-solving.
6. Greater innovation: When employees feel valued and empowered, they are more likely to be creative and come up with new ideas, which drives innovation and growth for the organization.
7. Stronger employer brand: A positive company culture enhances the organization's reputation, both within the industry and in the community. It increases business and customer loyalty.
8. Maximized customer experience and satisfaction: Your culture tells your customers how you treat employees and eventually how you will treat them. Businesses these days want to work with people who value people and demonstrate social responsibility.
9. Creates an alumni base of ex-employees: Former employees who feel positive about their time at the company remain connected to the organization even after they leave. They refer new employees, recommend your products to new customers and always have nice things to say about the company wherever they go.
10. Greater agility and ability to adapt to change: When employees are invested in the success of the company and are empowered to contribute to decision-making, they are likely motivated to work together to find creative solutions to new challenges. There are some ways in which a good company culture can support greater agility, including open communication, flexibility, collaboration, and encouraging innovation.
11. Enhanced financial performance and profitability: Good company culture can positively impact financial performance through increased employee engagement, improved customer satisfaction, higher levels of innovation and so on.
What does a positive company culture look like?
1. Clearly communicates the organizational mission and values
Having written mission and vision statements that are consistently communicated to everyone is a hallmark of a healthy organizational culture. The values to behold and the means to accomplish the mission are also laid out in simple words for all to understand.
2. Promotes psychological safety
When employees feel psychologically safe, they are likely to be open, honest, and candid in their interactions, which can lead to improved collaboration and problem-solving.
3. Listens to employees and encourages candid feedback
When employees' opinions and ideas are valued and taken into account, they are more likely to be engaged, motivated, and productive. Some ways to encourage employee feedback are employee surveys, an open-door policy, and performance reviews.
4. Promotes open communication
High-trust workplace cultures promote open communication and transparent decision-making, which can foster trust, unity and understanding among employees.
5. Believes in employee empowerment
Successful cultures empower employees to take ownership of their work and make decisions that align with the company's values and mission. Even a simple employee self-service tool can empower employees and make a huge difference in their day-to-day work.
6. Encourages Inclusion
A culture that values diversity and inclusion can lead to better problem-solving, decision-making, and innovation by drawing from a wide range of perspectives and experiences. Also, everyone feels a sense of warmth and belonging at work.
7. Values employee engagement and satisfaction
Employees who are engaged and satisfied with their work and the company culture are more likely to be productive and stay with the company long-term.
8. Aids a positive reputation
A company with a strong culture will have a positive reputation both internally among employees and externally in the industry and among customers.
9. Presents strong leadership
A company with a strong culture has leaders who value and uphold organizational culture. They actively work to maintain and strengthen the culture.
10. Recognition and rewards
A culture that values employee contributions provides opportunities for recognition and rewards to promote a motivated and engaged workforce.
11. Enables work-life balance
A successful culture values the importance of a healthy work-life balance for employees and provides support for achieving it.
12. Invests in continuous learning and development
A company that values continuous learning and development will offer a good range of opportunities for professional development. Eventually, this will help attract and retain top talent and can lead to better performance and productivity.
Who is responsible for company culture?
Honestly, everyone! As in, everyone in the organization. But different people have different responsibilities in modeling and stewarding the organizational culture.
- The C-suite and leadership carry the responsibility for envisioning, creating and maintaining a positive company culture. If they model it, others will follow in their footsteps without much effort. They also hold the financial and decision-making power to empower HR to invest in smart HR tools that enable a desirable organizational culture.
- The human resources team collaborates with leadership to define the desired company culture and communicate it to the organization. They bring best practices and suggestions into the system based on industry standards. HR also takes responsibility for making the culture code accessible to new joiners and others at any point in time. In simple words, HR facilitates, strengthens and sustains the organizational culture.
- Managers help in establishing the company culture at all levels in the organization by modeling it, encouraging it and rewarding it. They enforce policies and procedures that align with the company's values and mission. When something goes wrong, they take corrective actions to ensure that the overall culture is unaffected or set right.
- Employees play a crucial role in shaping and maintaining a company's culture. They are the ones who experience the culture firsthand and have the ability to influence it through their actions and attitudes. Employees can help create a positive culture by embodying the company's values and mission, fostering open communication and collaboration, and promoting a sense of community within the workplace.
Bonus Tip: Additionally, you can also appoint culture champions. These are people who believe in your culture and religiously model it in their everyday work life. They can help in developing and cultivating a passion for organizational culture.
How to measure and improve a company’s culture
There are multiple ways to measure the effectiveness of your company’s culture. They all have one thing in common - gathering first-hand data from employees. You need multiple perspectives from employees at all levels of the organization to get a comprehensive understanding of the company culture.
Once you have the data, you can act on it accordingly. Let’s look at some ways to go about this.
- Surveys: Use anonymous surveys to encourage honest feedback from employees. Anonymity will help them feel safe and hence be unbiased in their feedback.
- Interviews: Make managerial 1-1s a part of your organizational rhythm. Empower managers with the right questions and approaches to gather relevant data during these interviews. This gives you in-depth insights into how employees are affected by the culture and vice versa.
- Observations: Observing the behavior of employees and the interactions between them. It provides a sense of the prevailing culture.
- Performance metrics: Analyse employee performance metrics such as employee turnover, engagement, and productivity. You can even use thoughtful employee exit surveys to understand why employees leave and if culture was a factor.
- Benchmarking: Compare your company culture to industry standards and best practices to identify areas for improvement.
Growth never happens without measurement. Measurement never happens without intentionality. So, measure and make changes. Continue to learn and grow to build a highly trusted and valued workplace culture. It will set you apart from the crowd and undoubtedly give you an edge in the talent market.
Top brands with thriving company cultures
Hubspot believes in building a culture that enables individuals and teams to grow. It breeds a growth mindset where good judgment and solving for the customer are valued.
To promote its culture, Hubspot offers its employees a variety of opportunities to learn and grow fast through guest lectures, masterclasses, free books programs, and tuition reimbursement.
Google is widely known for its innovative culture. They believe in continuous research, experimentation and improvement. Yet, they also understand that all things start with people. They offer the right things to attract exceptional talent - employee benefits, employee autonomy, work-life balance, a fun work environment and so on.
Another interesting fact about Google is that they don't just hire for skills they also hire for character. They bring in the right people and create the perfect workplace for them to innovate!
Netflix has built a culture of excellence through a high trust and high ownership environment. In fact, the book 'No rules rules' covers their culture in-depth for companies that dream to be like them.
Their culture is based on employee freedom and optimized for maximum innovation. This is reflected in their policies and operations. For example, they give their employees unlimited vacations (without requiring approval). They do not conduct traditional performance reviews and are exorbitantly generous with their salary.
Workplace culture trends in 2023
The latest workplace culture trends are focused on creating a more inclusive, equitable, and supportive environment for employees. Some of the current trends include:
- Virtual collaboration: Remote work is no longer a pandemic-coping strategy. It’s taken the centre stage, and plays an important role in attracting and retaining top talent. Therefore, companies are focusing on developing virtual collaboration tools and strategies to facilitate a smooth virtual workplace.
- Mental health and well-being: Deadlines, huge workloads, relational strain and the pressure to balance homes and offices take a toll on the employee’s mental health and productivity. Companies understand this. So you will see many companies invest in smart employee engagement platform to hear and understand employees’ sentiments. As a way to help employees handle their workplace stress, better companies are implementing employee well-being programs and policies.
- Diversity, equity, and inclusion: The remote work world is out. There is no putting it back in. If companies want to stay competitive and innovative, they have to build a strong and diverse workforce. To do that, you need to create an inclusive and all-welcoming work environment, with a particular focus on underrepresented groups.
- Employee engagement: With remote work being globally embraced, organizations are focusing on implementing effective employee engagement strategies to keep their workforce tight, happy and productive.
- Emphasis on ethics and values: The pandemic happened. Then the economic crisis and mass layoffs followed. As a result, employees will stay with companies that show ethics and values that matter to them. The trust factor will play a key role in retaining talent in the coming decade.
- Return to Office: With the effects of the pandemic fizzling out, companies are starting to consider how to safely bring employees back to the office and how to create a hybrid work environment.
- Encouraging employee voice and feedback: In recent years, companies have recognized employee feedback in creating a positive and productive work environment. It is crucial to attract, engage and retain talent. This year, we will see companies embrace highly-effective ways to gather feedback.
- Building resilience and support for employees: Given that times are uncertain and changes are rapid, companies will focus on building resilience and supporting their people through employee support programs, flexible work arrangements, training and development and other measures.
- Fostering a sense of purpose and meaning in work: Employees who feel a strong sense of purpose and meaning in their work are likely to stay with their current employer. Companies will focus on fostering a sense of purpose and meaning in work by offering meaningful work, clarifying company values and mission, supporting employee causes and initiatives and so on.
Winning with a good company culture
Building a good employee culture is very rewarding in the long run. Your employees will be happy, and leaders, proud. The outer world will see and understand that you are a trustworthy employer/business brand. This trust will point top talent and business opportunities in your direction.
But beyond all that, one corner of this world will be a better place, a happy place, for you and your employees. That’s something, ain’t it?