What it Takes to Build Company Culture

Company culture is like a company’s inner atmosphere. But building it up, measuring its impact, and maintaining it can be difficult.

Every company has its own definition of culture. Some organizations show a very conservative approach to culture, and others are more liberal.

Take banks for example. Most banks have a high degree of hierarchy, and since banking tends to be governed by strict laws and regulations, employees don’t always have much say on how the company is being run. On the other hand, design or architecture firm might tend to show a more open and “laid back” culture due to the flat structure of their organization and also the creative nature of their jobs.

Neither of the two options are the right or the wrong way to do culture. Your company’s culture is its own and it is essentially what makes your company tick and be successful. So, let us dive in and learn more about what makes company culture, how you can go about building a positive culture in your organization and also see why your culture could make or break you.

What is company culture?

While every culture is different in practice, there are very traditional definitions about what company culture actually is. One of the more common definitions of culture is defined as, “it is the shared values, attitudes, behaviors, and standards that make up a work environment.”

This definition is supported by the fact that over 50% of respondents said that they saw and felt the company’s culture through it’s missions and values, recognition and celebrations, and the company’s approach to employee performance.

Company culture is like a company’s inner atmosphere. It mirrors the values and priorities of leaders and affects how resources are used, and also influences how tasks are carried out. Together, people and the organization create shared meanings from leaders' actions, forming agreed-upon norms that assist in decision-making

There are visible and “invisible” aspects to what is encompassed in the culture spectrum. Dress code, business hours, employee policies, employee benefits are some examples of how organizations show employees and the world what kind of organization they are building. These are the things you can see.

However, there are “invisible” or unwritten aspects of the culture that are much harder to define and measure. This could include attitudes and behavior of employees, the way communication is handled within the organization, the approach to decision-making, and also the management style. These are the things you can feel.

Why is company culture important? 

At its core, company culture is how things get done around the workplace. It guides how you do, what you do. It is not just a buzzword to throw around, but company culture actually matters. Having a positive company culture is beneficial for all the stakeholders associated with your business.

Let us begin by looking at some stats below-

1. In a report, Deloitte explains that 94% of executives and 88% of employees share the belief that a distinct corporate culture is crucial for achieving business success.
2. The findings in this report indicate that companies with a positive work culture are 1.5x more likely to experience a revenue growth of 15% or higher over a three-year period.
3. Those who characterize their organization's culture as exceptionally healthy, according to this survey state that businesses are more inclined to retain employees for over six years, averaging at 45% compared to the overall rate of 29%. The survey found that 49% of employees would be willing to leave their current jobs for a lower-paying position if it offered a better organizational culture.
4. More than half, specifically 56% of workers, prioritize a robust workplace culture over salary when evaluating job opportunities. Additionally, over three-quarters of workers express that they would assess a company's culture before deciding to apply for a job there. So a strong workplace culture can help retain top talent according to the survey done by Glassdoor.
5. When your employees find your company culture exciting, it fosters more engaged team members, and heightened team engagement which translates to positive outcomes for your business.
6. According to the Gallup State of the American Workplace Report, engaged employees exhibit a 17% increase in productivity and a 41% lower rate of absenteeism compared to their less engaged counterparts. When your employees are excited about your company culture, it leads to —and when your team is more engaged, it drives positive results for your business.
7. As per research conducted by the Department of Economics at the University of Warwick, happy workers demonstrate a 12% increase in productivity compared to the average worker, whereas discontented workers exhibit a 10% decrease in productivity below the average. Additionally, happy employees tend to deliver work of higher quality.

There are more studies and more data coming out almost everyday on the impact a positive culture can have on the business. Ensuring employee job satisfaction is just one aspect of the broader importance of fostering a positive company culture in today's business landscape. A positive culture not only boosts employee well-being and engagement but can also fuel company growth and enhance financial performance.

What is your culture and how do you build it?

The modern workplace has undergone a lot of changes in the past 3+ years. The post-pandemic employee is well-read and has certain expectations from their places of work. So, if you are looking to refresh certain aspects of your organization’s culture or are a startup looking to set up some ground rules, this is the right place for you! Here is a quick step-by-step guide on how to define your organization’s culture.

Start at the beginning

First, identify what is important to you and your company, For example, if you were a car dealership, you would require your employees to follow a certain dress code (formal, most likely), offer your sales team performance based bonuses, have your team work from 9-5 as that is when your shop is open and your leadership style is most likely top-down with focus on stability and rule following.

On the other hand, if you are an advertising agency, you are most likely to encourage your employees to innovate and take risks focusing on being competitive while showing a more collaborative approach to management and decision making.

Like said earlier, neither of these ways or working are correct or incorrect. Your company culture dictates how your employees make decisions on work tasks and is also the unique personality of your organization.

In addition to your business model, your culture will also be determined based on the region you operate in. For example, Eastern societies tend to have a more collectivist culture where success is measured based on team efforts and the decision making is very hierarchical. On the other hand, most of the Western societies show an individualistic culture which focus on individual performances and decision making is more collaborative.

Keeping all this in mind, the first questions to ask yourself are- What kind of organization are your building? What will be your key focuses?

You could use these following traits as a good starting point.

1. Innovation → Risk- Is it important to you that your employees take risks and find innovative ways to succeed? Or is the goal to perform jobs the same way to reach peak perfection?
2. Attention to detail → Precision- If you are a project management firm for example, you will be asking your employees to put high value on this behaviour while as at a gym, this would not be top preference for the trainers.
3. Emphasis on outcome → Achievement- Here, what matters for you is the result, and not exactly how it is achieved. In a very competitive software market, the important thing is that the software functions as intended and meets the requirements, rather than the specific coding techniques or technologies used to achieve it. Emphasis is on the end result and not the process per se.
4. Emphasis on people → Fairness - If you are an organization that places high value on this , it would show that you care about treating your employees with respect and also that you place the utmost importance on seeing how your decisions affect your people. This can be shown through the way you conduct performance reviews or deal with conflict or also how you handle communication within your organization. If you did put this on the top of the list, you are most likely building a flat organisation, with transparent communication policies.
5. Team work → Collaboration- A very sales focused teams likely places a low value on this as salespeople are awarded commissions and bonuses based on their individual performance and not the performance of the team. In comparison a marketing team would place high value on this trait as the end result (social media, analysts, content creators etc) is due to the team working together to achieve their common goal.

Talk to your employees

Once you have identified key traits that will make up your organization’s culture, it is now time to assess if the rest of your company is aligned with your thoughts. At the end of the day, it is important for your employees to resonate with what the company stands for so it is important to include them in the final decision.

Here are a few ways you can talk to your team to get an objective idea-

1. Start by conducting focus groups of your various employees.
2. Organize a meeting with your leadership teams.
3. Data backed methods such as surveys and polls can also be sent out to your team members periodically during the design phase.

This process also helps create engagement and adds more value to the final product. Your best outcome will be the one where you combine your employees values with your company’s values. As you go through this process, you will also realize that everyone relates to the values and behaviors in their own way! This adds even more depth to your organization.

Implementation

Once you feel comfortable about the input you received, it’s time to add, remove, or enhance your final set of values. Put them down in writing, announce it to your colleagues, and ensure that it is implemented EVERYWHERE through your organization.

Any kind of new change is hard and will be met with some resistance but soldier one and make sure to incorporate your values end-to-end through your business. Ensure that it is very visible in your recruitment process, salary benchmarking, performance reviews review, onboarding etc and hold people accountable.

Use employee buy-ins and reward behaviors that are in accordance with your new system. You can also go one step ahead and organize workshops, initiatives and even mentorship programs to reinforce the culture you are trying to build.

Leaders are the key to ensuring an effective implementation so provide training sessions and involve them in decisions. Use their feedback, expertise and status in the company to create an environment where employees can do their best to reach company goals.

This implementation process will take time. This could be anywhere between 1-3 years, so be patient and stay the course.

Measuring culture and its effectiveness 

Culture is the social order of a business. You might consider it to be the Operating System of a business. So you have to stick to it and keep it consistent. While you can choose to update it and evolve it to suit today’s modern workplace (i.e., have a “trendy” culture), your best bet is to design a culture that can grow with you - not something you radically change every few years.

In the post pandemic world, there is an emergence of remote/hybrid work and also flexible working. So, if your organization is implementing remote work policies as a result of this, it will be necessary to revise or add certain key points to your way of work.

For example, if you have people working during different times, communication and engagement might be aspects of your culture you will have to fine tune. You can schedule donuts via Slack , set up an appreciation channel/chat feature to congratulate and celebrate your employees, organize a yearly trip for everyone to meet and also give your employees the freedom to plan their own engagement. Again, you have not changed your values per say, but you have adjusted communication and employee engagement to reflect your culture and better suit the climate of your workplace.

Another factor to keep in mind today, is growth in technology. AI and Automations are the buzz words of the later part of this year, and you can use them to help materialize some for cultural changes. This could look like automating pre-boarding tasks and checklists to be sent to new hires or sending out to pre-interview documents to hiring managers and candidates, you can use current developments to further drive into your stakeholders’ mind the kind of company you are building.

All the above mentioned processes take time, and not all them can be easily measured. However, there are certainly a few metrics you can keep a pulse on to gauge how healthy your culture is.

1. Retention/Turnover Rates - Do not be surprised if these fall in the beginning of your change period. This is common and it is possible that some employees do not resonate with what you are trying to build and that is okay. But talk to the people who are leaving through exit interviews and surveys to get feedback.
2. Referral Rates - If you’re hiring, are your employees referring people to join you? If they are, that speaks volumes to how they feel about your culture.
3. Employee Engagement - Employee surveys, eNPS scores, focus groups can give us an idea of how engaged to the business the employees are.
4. Recruitment - Have you attracted the employees you wanted? This is a great indicator of how well you communicate your culture in your recruitment process.

But there are also more observable behaviors such as, productivity, communication, adaptability, mental health, and employee recognition

A combination of these will allow you to measure the effectiveness of your implementation. Track the difference in scores over a period of time - 6 months vs 1 year for example to see if you were on the right track. If you are unhappy with your scores, you might have to revisit the process to see what and why it is not working.

What challenges can you expect?

Due to the ambiguous nature of the term, a change in culture or building a culture in the workplace is not easy. So, it is necessary to keep in mind some challenges that could likely come your way.

1. Resistance to change - This could likely come from upper management or long-standing employees who are used to doing things a certain way and might not appreciate the shift. Hence it is important to include them in the process from day one and communicate the importance of this change. If you are still facing some resistance, you might have to resort to C-suite interventions to drive in the point.
2. Communication - This falls almost entirely on the People team. Over communicate the importance of what you are trying to build. Highlight its positive impact and give you organization regular updates. Provide training for your managers and organize workshops to help your team understand the benefits of the implementation.
3. Not giving your employees a voice - If the communication in your company only flows top-down, you’re missing out. For a successful implementation, you need to hear the alignment or misalignment your employees feel with the new values.
4. Addressing conflicts - During a change process, there is often a lot not said. Some lingering conflicts and tensions are often the point of focus. Layoffs and turnover rates are also high so as a HR individual address them head on. Be a safe space to talk about these and communicate transparently and openly. Do not shy away from uncomfortable conversations.
5. Misdirection - The last and most important aspect for the change to succeed is to know why you are changing it. What is the purpose of your culture? What is the purpose of these behaviours you are enforcing? Why are you making this change today? What stage of growth in your company in? Unless you have a clear vision, your implementation is doomed to fail.

As we move past a period of workplace disruptions, it's time for organizations to rejuvenate their workplace culture and reignite enthusiasm among their people for working together. Regardless of the type of business you're in—whether it's sales, finance, or technology—the people working together to push your company ahead are just as important as your customers.

And, you have the power to build a strong and robust company culture. It's a continuous journey that brings better performance, happier employees, and a more strong organization. Keep in mind, culture isn't fixed—it's like an ecosystem that changes and grows with your business. By investing in your culture, you're not just making a better workplace; you're also pushing your business to perform at its best.