Why Culture Is Crucial to Success, and How to Create Your Unique Corporate Culture
Laszlo Bock, SVP of People Operations at Google, defines cultural fit—or what he calls “Googleyness”—as not being “just like everyone else,” but instead as sharing a common set of traits. For Google, this includes being comfortable with ambiguity and bringing new ideas to the table. As a business owner, should you strive to be like Google, or should you carve your own path?
You often hear about successful organizations—Google included—that have what is referred to as a “great culture.” Great corporate cultures are often described as being ethical or innovative, for example; negative culture is often described as toxic.
Is there really such a thing as the perfect organizational culture? Why is it that culture is notoriously difficult to describe, measure, and alter, yet it is crucial to an organization’s success? Read on to learn more about what culture means, how it can be measured, and why it’s okay to want to be different.
Why focus on corporate culture?
Instead of delving head first into how to recognize and measure corporate culture, I want to take a step back and look at what makes up an organization’s culture, and why it’s so important.
Coming from an Organizational Development background, I have seen first-hand how an organization’s culture has a direct impact on employee engagement and motivation, subsequent retention rates, and ultimately whether the organization is successful.
From the outset, defining culture in itself is no easy feat, partly due to the lack of consensus on what it really is. Many sources speak of the values and behaviors that contribute to an organization’s environment. These sources define culture as the shared attitudes, beliefs, and customs of an organization, and is built around a set of written and unwritten rules, influenced and molded by:
- Policies and procedures
- Organizational structure
- Leadership styles
- Employee reward structures
- Corporate sector, e.g. legal, technology, manufacturing
Although a company’s culture develops through its people, systems, and working environment, its influence is external, having an impact on stakeholders, customers, and the wider public perception of that company. Put it this way: When it comes to company culture, your reputation can either propel you to greatness or destroy you.
Let’s explore this further:
Would you feel comfortable purchasing goods from a store whose employees were clearly not happy? What if you heard from others how they’d previously had a negative experience with a company you were looking to invest in?
Again, reputation is something that can’t be seen or touched, but is extremely valuable. That’s why it’s critical to measure culture so you can more easily understand it, monitor it, and—if required—put strategies in place to change it.
How to recognize a healthy work culture
Is having a fireman’s pole, a game room, and unlimited free food the key to fostering a great culture?
Perhaps, but it’s not just about having fun or about being the coolest company to work for; it’s also about defining and building a culture that reflects the organization’s unique vision, values, and goals.
If you take a closer look at companies admired for their strong corporate cultures, you will notice they share some common traits, despite having very different product or service offerings.
Companies with a strong corporate culture share 5 common traits:
1. A charismatic company leader with a strong sense of business direction and purpose
Take Apple as a prime example; strong leadership has played a vital role in the company’s unprecedented success.
Steve Jobs was passionate about innovation and delivering exceptional customer service regardless of the product, store, or employee. He instilled these values and his “12 Rules of Success” throughout the company, and this has resulted in a strong culture of excellence and constantly pushing technological boundaries.
2. Employee pride and enthusiasm for the organization
If your employees enjoy coming to work every day and have a genuine love for their role, it shows.
They are a willing advocate for the company and speak highly of the people they work with and for. They are proud to call themselves an employee of your organization. An employee’s external attitude toward the organization they work for is generally an accurate gauge of the internal culture.
Twitter consistently comes out on top for employee satisfaction, with one staff member writing as part of a candid workplace insight that they “love how the 10 core values drive the company to always be better.”
3. A focus on innovation
The Walt Disney Company, Boeing, and IBM all explicitly include the word “innovation” in their vision, mission, and core value statements.
Not being content with the status quo and aspiring to be at the forefront of new advances in the industry are defining features that these companies have chosen to build upon. Valuing innovation is a fantastic way to empower employees to challenge themselves, and to find new and better ways to get a job done.
4. Investment in employee learning and development
Implementing a robust training program doesn’t just enhance your employees’ knowledge and skills; it’s also a great way to demonstrate and reinforce behaviors that your company hopes everyone will embody.
If a company places importance on building capability, employees feel valued and are more likely to stay. Cognizant Technology Solutions has one of the best learning and development programs and aligns individual development plans with organizational performance goals.
5. A lower than average turnover rate
Dreamworks has a staggeringly high retention rate, with only three percent of staff leaving the company each year.
This is in stark contrast to the 11 percent average voluntary turnover rate across all industries. Banking and finance, healthcare, and hospitality all fare worse than the average at 13.3, 13, and 20.2 percent, respectively.
Dreamworks’ Head of Human Resources Dan Satterthwaite attributes the company’s success to a number of factors: the campus layout is conducive to creative conversations, and at a time when layoffs were commonplace in the film industry, Dreamworks avoided major staff cuts.
So, what can we learn from organizations like Dreamworks? To attract and retain top-performing employees, you need to understand what they value most. This may be job security, autonomy, or regular opportunities for creativity.
Whatever it is, recognize what your employees desire in a workplace. Do this by surveying employees or discussing reward and recognition systems as part of the performance review process. Are flexible hours important? Is access to wellness initiatives something that many employees would want? Once you know what your employees value in the workplace, aim to meet these needs in as many ways as possible.
What does strong company culture look like?
You may know that a strong corporate culture is the foundation of an organization’s performance, but how do you measure the effectiveness of something so elusive and complex? It’s challenging, but it’s not impossible.
Research shows that organizational culture is directly linked with employee turnover rates. A weak culture leads to high turnover, which then perpetuates cultural issues. It’s a vicious cycle that can be broken and prevented by measuring how well your organization is faring, using a few tried and tested methods.
How to measure culture performance:
One of the simplest ways to obtain statistics relating to organizational effectiveness is to make use of HR reports. If you don’t already, you should be gathering data, such as how many employees leave the company each year in addition to the average staff tenure. The more specific and detailed the information you can get, the better you’ll be able to spot emerging patterns relating to staff movements.
A downside to using HR reports in isolation is that you don’t tend to get the whole story as to why people leave, and this information is critical to being able to successfully implement change. In addition to tracking HR metrics, you should also gauge the level of employee satisfaction, engagement, and value alignment. This can be achieved either by using online measurement tools or by conducting regular in-house employee surveys.
If you want to outsource the measurement of your organization’s culture, there are multiple options to choose from. One of the most widely-used and highly-researched tools available is the Organizational Culture Inventory®, designed by renowned organization design company Human Synergistics.
The tool measures a company’s current operating culture and provides a visual comparison to a preferred culture. This then forms a basis for implementing appropriate strategies to target particular areas of concern, with a view to reaching the ideal culture. One reason why this tool is so popular is the ability to compare an organization’s culture with other cultures in the same industry.
Although using validated tools will give you the most accurate and reliable assessment, you also have the option of developing your own in-house employee surveys. This way, you get a quick snapshot of the current organizational culture and how it influences employees’ attitudes and behaviors.
You can easily set up customized surveys and manage employee responses centrally using online software such as SurveyMonkey. If you need inspiration on what types of questions to ask, take a look at some key focus areas.
Create and drive the right culture for your business
Now that you know the importance of corporate culture and the impact it can have on an organization’s success (or failure), here’s a recap of key aspects you can focus on to help foster a happy and healthy workplace:
Have clear and relevant corporate values
A values statement forms the basis of an organization’s DNA and is both an internal and external declaration of what a company stands for. To have maximum impact, everyone from top leadership down must embody and believe in the company’s mission, vision, and values.
Encourage and reward alignment with these values
The compensation and reward systems you choose are integral to how employees perceive their worth within your company. Hiring people for cultural fit is a good way to make sure your employees share similar values and are subsequently rewarded when they demonstrate these values within their roles.
Train and develop your staff
To successfully grow your business and be taken seriously by both employees and customers, you need to focus on learning and development. Take the time to invest in yourself and your people and you’ll avoid being that company with the less than favorable reputation.
Regularly measure and monitor key metrics
Whether you decide to use HR data, employee surveys, or a full-scale culture measurement tool, you need to do this over time at regular intervals. Culture is generally slow to change, so you have to take multiple snapshots to get the complete picture of how any strategies implemented have had a positive or negative impact.
Not everyone can be like Google, and not everyone should want to be.
Just as every person has a unique personality, so too does every organization, manifesting as its corporate culture. Arguably a business’s biggest asset—its culture—can just as easily be a liability. Company culture has a major influence on employee behavior and turnover, with potential effects on productivity, growth, and overall performance.
Culture may be complex, but the benefits of a strong organizational culture are clear.
You need to have the knowledge and appropriate tools to be able to guide your business in a direction that aligns with the organization’s mission, vision, values, and goals.
Remember that building a positive culture can take time, but once you know the ingredients that work well for you and your business, you’ll reap the rewards of employee and customer loyalty, with the goal of excellent organizational performance and long-lasting success.