Organizational Culture: Definition, importance, and development
Great company culture is the secret to cultivating the qualities required for commercial success. And you’ll see the results in your bottom line: Companies with healthy cultures have a 1.5 times higher likelihood of experiencing three years of revenue growth of 15% or more and a 2.5 times higher probability of experiencing three years of notable stock growth. Despite this, just 31% of HR leaders think their companies have the culture necessary to spur future business. And getting there is no simple process; 85% of companies struggle to change their cultures.
This is a thorough guide on enhancing your organization’s culture, covering everything about cultural definition to cultural significance to a creative process you can use.
Organizational culture: what is it?
Consider it as the assortment of Organizational culture characteristics that define your business. All team members’ behavior is influenced and guided by the values, expectations, and practices that make up the organizational culture. A great workplace culture highlights positive traits that improve performance, whereas a dysfunctional workplace culture brings out flaws that can hinder even the most successful businesses.
Organizational goals and a mission statement should not be confused with culture. Press releases or policy statements don’t build culture; consistent and genuine behavior does. When you observe how a CEO handles a crisis, how a team adjusts to shifting consumer needs, or how management operates, you can observe the corporate culture.
The importance of culture to your company
Organizational culture impacts every facet of your business, including timeliness and tone, contract conditions, and employee benefits. Companies prioritizing culture are more likely to survive challenging times and change. Your employees are more likely to feel at ease, supported, and valued when your workplace culture matches their preferences.
Culture is a crucial edge when luring people and exceeding the competition. Additionally, an organization’s culture is one of the most important predictors of employee satisfaction. Nearly half of workers would quit their current position for lower-paying work at a business with a superior culture, and 77% of job seekers think about a company’s culture before applying.
Think about Salesforce and Microsoft. Technology-based organizations prioritize culture, which has helped them become renowned performers and brands. Since Satya Nadella became the company’s CEO in 2014, Microsoft, infamous for its fierce competition under Steve Balmer, has undergone a favorable transformation. He started a program to improve the corporate culture, which shifted the emphasis away from competition and toward ongoing learning. Employees were urged to advance themselves as opposed to proving themselves. Microsoft is one of the most valuable corporations, with a market cap that is shy of $1 trillion and is once again in a tie with Apple and Amazon.
Over the years, Salesforce has seen tremendous growth in terms of company culture. The founder and CEO of Salesforce, Marc Benioff, developed philanthropic and cultural values that have led the business for the past 20 years. All new Salesforce employees receive 56 hours of paid vacation time annually and volunteer for a portion of their first day. Salesforce emphasizes purpose and mission, which hasn’t hurt business results: The stock price of Salesforce has increased consistently in the last several years by an average of over 26% yearly.
Organizational culture characteristics
Every organization has a unique culture; therefore, it’s critical to keep what makes your business special. But high-performing firms’ cultures regularly display a few traits that you should work to cultivate:
When a company’s goals and its workers’ motivations point in the same direction, alignment occurs. Outstanding organizations strive to align with their vision, mission, and objectives.
Several ways to express gratitude include public kudos, a thank-you note, and promotions. A team environment where everyone frequently acknowledges and expresses gratitude for the efforts of others is known as an appreciation culture in an organization.
A business needs to be trusted. Because successful companies foster a culture that prioritizes productivity, performance is crucial. These companies have talented employees who support one another’s success. In a climate of trust, team members can speak their minds and count on others to help them.
Resilience is a vital quality in highly dynamic circumstances where change is continual. In a resilient culture, leaders will learn to anticipate change and adapt to it.
Collaboration, communication, and respect among team members are all parts of teamwork. Employees will do more work and feel better if everyone on the team encourages one another. When teams depend on one another to make decisions, evaluate findings, and build relationships, integrity, like trust, is essential. Transparency and honesty are crucial elements of this facet of culture.
Innovation helps businesses make the most of their markets, resources, and technological advancements. To have an innovative culture, all facets of your company must use creative thinking, even your cultural initiatives.
Employees are supported psychologically to take risks and provide honest feedback. Because psychological safety starts at the team level, not the individual level, managers must make an effort to establish a safe workplace where everyone feels comfortable contributing. Let’s talk about how to create a great culture now that you know what one looks like.
How to create a high-performing corporate culture in 5 phases
A plan with specific goals you can work toward and the track is necessary for building a great corporate culture. The eight stages listed below should act as a road map for creating a continuity culture that will benefit your entire firm in the long run.
1. Excel in recognition
Recognizing each team member’s efforts has a profoundly positive impact on corporate culture in an organization. Individuals begin to understand how they fit into the larger picture when everyone on the team acknowledges each other’s achievements. Even the most jaded workers want to feel like their labor matters and are aware when they aren’t appreciated (76% of workers say they don’t feel notably recognized by superiors). Experts agree that when a firm makes employee appreciation a part of its culture, critical indicators like employee engagement, retention, and productivity rise.
Consistently offering social recognition has a tremendous influence on business. Organizations that invest in social recognition are four times more likely to witness stock prices rise, twice as likely to see NPS scores rise, and twice as likely to see individual performances rise. To make acknowledgment a part of your culture, it must occur frequently and not just on special occasions like work anniversaries or important milestones. Encourage team members to continually provide each other with positive feedback in addition to financial rewards.
Money-related acknowledgment is also beneficial. Consider a recognition program that uses points and enables staff to accrue large point balances quickly. Instead of receiving a generic mug or years of service certificate that will sit on a shelf collecting dust, they’ll enjoy looking forward to redeeming their points for a gift that has a unique value for them.
Recognition should also be explicitly linked to corporate values and specific activities to encourage additional cultural attributes. After all, 92% of workers concur that when they receive praise for a particular behavior, they are more inclined to repeat it in the future.
Last but not least, as they establish the cultural trends for your entire firm, leadership needs to take center stage in your recognition initiatives. Include a talk on recognition in your leadership training and provide managers advice on how to do it and why it’s essential.
2. Enable employee voice
Because failure to do so can result in lost revenue and demotivated employees, it is crucial to develop a culture that values employee feedback and fosters employee voice.
First, you need to get feedback using the appropriate listening technologies, such as workplace chatbots and pulse surveys, that make it simple for employees to convey how they’re feeling at the time. Then examine the outcomes to determine what is and is not working for your company, and take action while the results are still applicable. Not only does this improve your organizational culture, but it also positively affects employee satisfaction and profitability. A Clutch poll indicated that 68% of workers who receive regular feedback felt satisfied. A Gallup study found that businesses with managers who got feedback on their strengths experienced an 8.9% increase in profitability.
Make sure you pay attention to subtler feedback expressions that can point to cultural shortcomings in addition to receiving input using the ways mentioned above. Pay attention to your employees’ body language, for instance, as it can reveal a lot even when they aren’t eager to speak. Video conferences can help keep this nonverbal communication channel open if you work with a remote team. Every manager meeting with a staff member should be viewed as an opportunity to solicit input, respond to it, and serve as a trusted coach.
3. Make your leaders culture advocates
The ability of team leaders and managers to create a positive working culture within an organization depends on them. The endeavor is undermined, for instance, if your leadership team exhibits behaviors inconsistent with the values prioritized in your workplace culture. Team members will be able to distinguish between stated and practiced values. Because they think management has encouraged those unpleasant actions, they can even start to imitate them.
By making it a priority in all facets of their professional lives, your leadership team can aid in creating the culture you require. They must be willing to incorporate employee feedback into their efforts to advocate for cultural diversity and freely and transparently address the organizational culture and values. While 76 % of executives believe their firm has a well-communicated value system, 31% of employees concur. Thus leaders need to understand their people’s perspectives on culture. Employees will imitate leaders who are exhibiting your culture.
4. Live by your company values
The cornerstone of your company’s culture is its set of values. While creating a mission statement is a terrific place to start, incorporating company values into every element of your operation is what it means to live by them. This covers support agreements, HR guidelines, benefit plans, and extracurricular activities like volunteering. Your company will be known and respected for living out its values daily by its staff, partners, and clients. To demonstrate that your values are more than words, you can reward employees for their actions that uphold your principles. This will encourage them to foster the value-based culture you desire.
5. Forge connections between team members
Establishing solid links among team members is necessary to create a corporate culture that can withstand adversity. However, doing so might be difficult, given how remote and terse communication is. Even when working remotely, encouraging cooperation and participating in team-building exercises are great ways to unite your team and foster communication.
Look for and foster mutual interests between team members, especially those from different generations who might otherwise find it difficult to get along. This can open up new channels for comprehension and empathy, two things that are essential for enhancing conflict resolution, creativity, and other interpersonal skills.
