Good employees are everywhere, but great talent is hard to find. Today’s companies understand that to recruit and retain the best people, their culture must be designed to engage and empower its workforce.
Though executives often state the importance of company culture, it isn’t always carried out. Far too often, core values are not communicated clearly throughout the organization, or they are never put into practice. One Deloitte survey found that only 12% of executives believe their company is driving the right culture. And only 28% of executives understood their organization’s culture.
We hear executives harp on about the importance of culture in the workplace, and it typically has a couple paragraphs in every employee handbook. But why exactly should a company have culture in the first place, and what makes it so important?
How do you define company culture?
Before we can understand why company culture is important, we first have to find a common understanding of what exactly it is. The Society for Human Resource Management (SHRM) defines company culture as values derived from human nature, the organization’s relationship to its environment, appropriate emotions, and effectiveness.
Organizational culture, corporate culture, company culture— no matter how you decide to call it, they all define and impact the personality and character of a business.
Usually, company culture is made up of three parts: mission statement, vision statement, and core values.
- Mission Statement – This is a short statement that answers the question: “why does your company exist?”
- Vision Statement – This statement outlines the organization’s goals for their medium to long-term future.
- Core Values – These are the principles that help guide a company’s decision-making and internal interactions.
Keep in mind that some companies may label these elements differently, but they are the building blocks of every company culture. Even if you already have yours defined, it’s important to continually revisit your own mission, vision, and core values. Do they still seem relevant today as when they were first instituted? Are you successfully conveying them to your team?
If not, then this next section is for you.
How to improve company culture
Company culture is so ambiguous, and each company so different, that there is no one way to improve upon it. However, here are a few actionable steps that any company can take to work on its culture.
Hire the right people
This should go without saying, but your company culture is only as effective as the people it hires. Historically, companies have aimed to hire candidates who are “culturally fit.” But today, that phrase has become outdated. Today, “culture fit” is perceived as an example of unconscious bias, an unintentional form of prejudice and groupthink. Put simply, emphasizing “culture fit” only encourages people to think and act the same.
Instead, companies are turning to focus on “culture add”. These individuals still mesh well with the company, but also bring in their own unique perspectives to help make the company more diverse. For example, a remote worker from Poland could help provide an outsider’s perspective on the company’s processes, or a graphic designer could offer useful insights on the company’s marketing material. In choosing between culture add versus culture fit employees, remember how a more diverse company often lead to more creative and original ideas.
Master the art of communication
Never underestimate the importance of strong communication. You may have a company culture that emphasizes hard work, empathy, and other equally important values. But if you fail to convey them to your team, then those values won’t be practiced in actuality. They’ll simply remain as words on a wall.
For example, employees of a recently acquired company often face increased challenges in communication as they attempt to navigate a new company culture. In fact, one 2018 study from Quantum Workplace found that companies that recently underwent a merger or an acquisition saw their employee engagement rate drop by 3%.
Build respect among team members
Trust and respect form the basis of any relationship. Workplace relationships are no different. But trust remains a common issue in the workplace even today. In a Harvard Business Review study of 9,800 full-time workers from 8 different countries, only 46% placed a “great deal of trust” in their employers. The top five reasons for the lack of trust were listed as:
- Unfair compensation
- Lack of equal opportunity for pay and promotion
- Lack of strong senior leadership
- Too much employee turnover
- Lack of a collaborative work environment
Encourage team building and social interaction
Your employees spend most of their waking hours at work, so fostering a workplace environment that promotes health and motivation is crucial. One of the most effective ways to do this is by promoting teamwork. Beware, team building can sometimes carry a stigma, especially if it forced or disingenuous. But when it’s delivered right, intentional socialization can really be a game-changer for your employees. Everything from a company-wide retreat to a team lunch for someone’s birthday can instill a greater sense of solidarity among workers.
Growth Culture vs. Performance Culture
Culture comes in various forms, but it can typically be organized into two buckets: growth culture and performance culture. Almost every organization you come across will feature some mixture of each, but how exactly do they differ?
Performance Culture: Success at all costs
Let’s start with performance culture. This type of culture tends to focus on efficiency and results above all else. Employees are generally perceived as cogs in a machine rather than individual humans; as a result, they are often incentivized by fear, money, and the threat of replacement.
The result: workers frequently experience burnout. Popular examples include brands like Amazon and Walmart, where employees are paid on a minimum wage despite being consistently ranked based on output.
Growth Culture: Building Long-Term Success
Alternatively, there’s growth culture. Companies with a growth culture tend to be less black-and-white about work and place a greater emphasis on the commitment to learning. Targets and profits, but they never get in the way of the workforce morale.
Instead, failures and setbacks are taken as lessons. Continuous feedback loops reward hard work. This all leads to a happier workforce, as well as a more innovative company. Brands that adopt growth cultures include Apple. These companies are excellent at creating environments that encourage experimentation, diversity, and camaraderie. “At Apple, we’re not all the same,” their website reads, “And that’s our greatest strength. We draw on the differences in who we are, what we’ve experienced, and how we think.”
Harvard Business Review recently published an excellent article that goes into further depth about building a growth culture over a performance culture.
Examples of Great Company Cultures
Southwest Airlines Co. has a reputation for becoming the world’s largest low-cost carrier, which differentiates them from competitors focused on luxury or international destinations. But not many people are aware that Southwest Airlines is also known for having a world-class culture with a focus on employees and customer service. In fact, they have a whole webpage on their site dedicated to outlining their culture. They have even dubbed their values “the Southwest Way,” which include striving for excellence, being respectful, and delivering memorable experiences.
When asked to describe the Southwest Airlines culture, Tammy Romo, Executive Vice President & Chief Financial Officer of Southwest said this: “Our people and our culture are by far two of our key strengths at Southwest Airlines. We have a very caring culture. It’s the culture this company was founded on with 195 employees in our first year, and one that we work extremely hard today to protect even at 58,000-plus strong.”
The Vision: “To become the World’s Most Loved, Most Flown, and Most Profitable Airline.”
The Mission: “…dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.”
Values: “Warrior Spirit, Servant’s Heart, Fun-LUVing Attitude, Work Safely, Wow Our Customers, Keep Costs Low”
It’s almost impossible to have a conversation about culture without bringing up Zappos. This popular shoe and clothing retailer was early to the online shoe market back in 1999, but the fun and collaborative culture is what propelled Zappos to grow. Their mantra is simple— if customers are happy, they will come back. All new employees go through the same training, learning the same values that reflect their focus on curiosity and fun.
“At Zappos, we really view culture as our No. 1 priority.” said Tony Hsieh in an interview with the New York Times. “We decided that if we get the culture right, most of the stuff, like building a brand around delivering the very best customer service, will just take care of itself.”
The Vision: “to live and deliver WOW.”
The Mission: “We aim to inspire the world by showing it’s possible to simultaneously deliver happiness to customers, employees, vendors, shareholders, and the community in a long-term, sustainable way.”
Values: “(1) Deliver WOW Through Service, (2) Embrace and Drive Change, (3) Create Fun and A Little Weirdness, (4) Be Adventurous, Creative, and Open-Minded, (5) Pursue Growth and Learning, (6) Build Open and Honest Relationships with Communication, (7) Build a Positive Team and Family Spirit, (8) Do More With Less, (9) Be Passionate and Determined, (10) Be Humble.”
GitHub has become a household name for Software developers. If you are unfamiliar, GitHub is a Git repository hosting service— a service for hosting and managing software files and code. Just last year, Microsoft purchased the company for $7.5 billion.
However, Github didn’t always have a stellar reputation for its culture. In 2014, after a major sexual harassment scandal, GitHub tapped Nicole Sanchez as GitHub’s VP of social impact to improve diversity and inclusion practices. Since then, the brand has made major strides in creating a safer space for all of its employees.
“Any company that has not explicitly articulated the connection between the thing they’re trying to produce and the need for a diverse group of people, will just miss every single time,” said Sanchez.
The Vision: “GitHub is the best place to share code with friends, co-workers, classmates, and complete strangers.”
The Mission: “…code is about the people writing it. We focus on lowering the barriers of collaboration by building powerful features into our products that make it easier to contribute. The tools we create help individuals and companies, public and private, to write better code, faster.”
Values: “Collaboration, Empathy, Quality, Positive Impact, and Shipping.”
The industry-leading brands mentioned in this article are proof that supporting a strong company is doable. As you’ve seen with the biggest brands, it is a worthy investment to focus on your team. Provide generous benefits, create an inclusive environment, and develop character through training and mentorship. These are the essential building blocks to ensuring that your people love to come into work each day.
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