Employee engagement
Cassy Aite
January 17, 2020
10 min

What Is Company Culture and Why Is It Important?

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What Is Company Culture and Why Is It Important?

Cassy Aite
October 2, 2020
What Is Company Culture and Why Is It Important?

Company culture might sound like a trending phrase, but it’s something that runs deep through any organization. It’s part of who you are as a company, what your business stands for, and how (and why) you do what you do. But what is company culture, exactly? 

Let’s look at what company culture is, what it isn’t, and why it’s hugely influential today. 

What Is Company Culture?

Company culture is more than a buzzword. It refers to the approach, beliefs, actions, and behaviors shared by a company and its people. Think of it as a company’s personality, built of many different traits. 

Like our personalities, it’s often hard to describe corporate culture. There’s no one word to define the way a company is. Many companies define their culture as playful, open, innovative, welcoming, or challenging. You’ll hear words like trust, authenticity, accountability, and fun. These words can give you insight into a company’s culture, but you’ll need to dig a little deeper to understand the values and ethos that create it. 

Several factors influence company culture, including vision and values, your approach to leadership, the people you hire, and your work environment. Let’s unpack each of these now.

Vision and Company Values

For your company to develop a culture of its own, you first need a clear idea of who you are and what you stand for. Your vision and core values influence everything about your company — from the words you use to the perks you offer.

Take Google, for example. The tech giant lays out its mission, values, and commitments online for all to see, one of which is to “significantly improve the lives of as many people as possible.” Values and vision are often at the heart of what a company does, and they lie at the heart of company culture. 

Structure and Leadership Style

What is company culture? Happy older woman against a fuchsia background

Everyone plays a key role in organizational culture, but the most significant impact comes from the top. The CEO and management team’s structure and leadership style influences how everyone works, communicates, and moves the company forward. 

Some companies favor a traditional hierarchy, with cascading levels of management and control. This works for some teams, but it can create an imbalance and lack of shared information in others. Other companies opt for a “flat” structure where there’s no clear hierarchy and a less formal management style, which can promote a culture of openness and innovation. 

A Connected Team

Your company culture lives through the people you employ, the partners you work with, and the actions you take. Teams that have shared values and appreciate the same qualities tend to work well together and help build your culture from the ground up. 

Hiring the right people can create a ripple effect through your teams. Technical experience is valuable, but culture fit is quickly becoming one of the main reasons to choose one potential new hire over another. You want to attract people who are aligned with your values and vision, as they’ll help your company culture grow and thrive. 

Your Environment

Animated photo of a bright, white conference room

Great company culture isn’t just about your values or finding the right balance when it comes to your teams. It’s also about your location and working environment. Changing your office location, taking down walls, and introducing spaces for collaboration can impact your culture. 

While it’s not always possible, your space should align with your values and business approach. If you’re all about idea sharing and innovation, create open areas with equipment that makes this easy. If your company values research, you may want to offer quiet, focused spaces where people can discover something new without distraction. 

Use color, texture, design, and artwork to style your workspace and create the kind of atmosphere that promotes the message you believe in. Don’t be afraid to add playful elements if you want to encourage a sense of fun. While your culture isn’t defined by whether you have a slide or ping pong table in your office, the elements you introduce can impact your employees’ mood, productivity, and focus. 

Your environment also matters to remote workers. Whether they work at home or in the local coffee house, the physical and digital spaces they use are just as relevant. You can help create a calm and focused workspace by providing work from home essentials

And don’t forget about your digital spaces too. Use communication tools like Notion or Basecamp to make collaboration easy, and encourage the use of an app like Slack for quick chats, life updates, and fun news.

Your Story and Actions

We’re all influenced by our past, and companies are no different. The history, journey, and challenges of a business can shape its workplace culture.

Company culture is often influenced by the founders’ history and the road that led them to the point of inception. Many businesses begin from a place of passion, and that’s a feeling that many founders want to continue — even as the company grows. 

Founders who have battled adversity or faced particular barriers often seek to remove those for others. This could look like anything from creating a volunteering partnership with a local charity or introducing mental health and wellness stipends for employees

What Company Culture Is Not

When you think of company culture, you might picture ball pits and corporate retreats. While some companies do offer these perks, company culture is much more than the sum of its parts. Here are a few things that company culture is not:

Fun Perks

As mentioned, company culture isn’t ping pong tables, free beer, and finishing work early on a Friday. These perks make a company more attractive to potential employees, but they don't define the organization. 

While perks themselves aren’t the be-all and end-all of company culture, sometimes they are reflections of it. Finishing early on a Friday could reflect a company’s stance on work-life balance, wellness, and time for family. 

The free beer might come from a local brewery, as part of a commitment to support local business. A collection of pool tables might speak to the company’s playful nature and how it values taking time away from your desk to feel refreshed. Company culture is about the meaning behind these perks. 

A Replacement for Actual Management

Funny gif of a man asking, "Who's the manager?"

All too often, a laid-back company culture can be an excuse for lack of structure, management, and strategy. Many employees will do what they should, even without much supervision. But they won’t have the support and structure they truly need to be at their best. 

Every company needs a strong stance on management, structure, decision making, values, and purpose. Imagining a company culture of transparency and innovation sounds great, but it must be backed up by real applications and guidelines.

Static

You might set out to define your company culture with a document or presentation. Doing so is fine, but your company culture isn’t static — it’s open to change and growth. 

Your team will greatly impact your company culture. As they move on and others come in (i.e., employee turnover), the environment will change slightly. If your leadership changes, you could see a bigger shift in culture. The same goes for other changes in your office setting, benefits and perks, and management. 

But don’t be afraid of change — embrace it. Change presents new opportunities to get closer to your vision and encourages your employees to progress in the same direction. 

Why Company Culture Is Important

What is company culture: Colorful paper planes symbolizing company growth

Whether or not you’ve intentionally created it, your company has some kind of culture. The goal is to shape it into something meaningful that aligns with your values and offers your employees more than just a place to work. Here are some of the benefits of investing in company culture:

Influences Your Reputation

It seems everyone is talking about company culture these days. It’s on people’s radars, and it’s one way that people will form opinions about your organization. 

If your company has a positive culture, your employees will share that message beyond your business. Your employees are often your biggest — and loudest — advocates. Company culture can quickly become part of your brand’s reputation, which can have positive and negative effects. 

If the talk is positive, you’ll find yourself among well-known companies with great cultures like Google, Zappos, and Southwest Airlines. If word gets out about a negative culture or a mismatch between values and actions, it can spread quickly — as it did for The Wing.

For some companies, reputation is everything. Even if it isn’t, it can still affect your ability to recruit new hires and secure investment from the right people. Research shows that 86% of people would not apply to or continue working for a company with a negative reputation. 

Build a strong, aligned, and meaningful company culture, and you’ll be on your way to growing a positive reputation alongside it. 

Unites Your Team Towards One Goal

Animated gif of Shakira saying "Greetings my fellow coworkers"

Company culture isn’t a series of statements that you write down in a playbook that gets revisited once a year. It’s the living nature of your business that influences your team in almost every aspect. Having a strong culture that everyone understands — and investing in team collaboration — can unite your employees and create shared values. 

For example, Zappos calls itself a “customer service company that happens to sell shoes.” People are hired based on culture fit and let go if they don’t align with the company’s ethos. A strong sense of identity means that all employees are united, care about the same values, and work to take them from concept to reality. 

Gives You a Competitive Advantage

A positive, open, and supportive company culture creates an environment for employees to feel their best. It also gives them the space, tools, and confidence to work at their best. This is great news for your bottom line. 

Developing a robust and impressive work culture can give you a strong competitive advantage. Greater employee happiness can lead to boosts in productivity and engagement. A recent study found that organizations scoring high in employee engagement reported almost three times the return on assets, and double the return on sales. 

What’s more, an attractive company culture can land you on “best of” lists. Not only is this fantastic promotion, but it’s also a potential financial boon. For instance, being named one of Glassdoor’s “Best Places to Work” could lead to a jump in stock returns

The same report found that companies with low employee ratings on the platform tended to underperform on the market. Company culture isn’t a checkbox exercise — it’s something that can have a significant impact on your revenue, sales, and profitability. 

Helps You Attract and Keep the Right Candidates

What is company culture: Animated gif of Homer Simpson getting hired

By now, you know that having the right company culture can garner positive attention. Having an open approach to professional development or offering family-friendly policies can put you on the radar of your best future hires. 

People want to work for companies that align with their professional values. Perhaps it’s the importance of work-life balance or team collaboration. Whatever it is, people seek work environments where they feel that they can contribute and make a difference. 

A recent study shows that more than a third of talented applicants would pass on a job if the culture fit was poor. Being transparent about your company culture means you have the best possible chance of attracting the right candidates. 

Company culture can affect employee retention. With culture fit being a key driver for many, you could find yourself losing talent to companies with a more well-defined — or more attractive — culture. If so, it might be time to take a look at how you work, or it could mean you were never a great cultural fit for them in the first place. 

What Is Company Culture? It’s Everything

Company culture isn’t free food and coffee for employees. It’s the personality of your organization and encompasses your values, vision, actions, and workplace atmosphere. It also influences the way people view your brand, so it’s essential to get right. 

Shape your culture by being open and listening to feedback. Look back at your history and figure out what will move your company forward. Invest in meaningful benefits for your teams, like health and wellness programs. Continue to grow, hire for culture fit, and encourage team members to work towards a common goal. 

By following these steps, you’ll begin to mold your work environment (whether physical or virtual) to where you want it to be. To improve your company culture, consider your options for employee fringe benefits and book a demo with us today.

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