What is company culture?
When you search for a definition of ‘company culture’, it’s likely that you’ll come across something like this:
Shared values, goals, ethics, expectations, and beliefs all add up to company culture – and drive how decisions are made, what actions are taken, and the business results that follow. Typically, culture originates with an organisation’s founders or leaders and trickles down to employees.
But how do these manifest themselves when you walk through a company’s door? Most explanations seem nebulous at best, and there really is no standard definition of what company culture is.
The closest definition probably comes from Frances Frei and Anne Morriss in the Harvard Business Review:
Culture guides discretionary behaviour and it picks up where the employee handbook leaves off. Culture tells us how to respond to an unprecedented service request. It tells us whether to risk telling our bosses about our new ideas, and whether to surface or hide problems. Employees make hundreds of decisions on their own every day, and culture is our guide. Culture tells us what to do when the CEO isn’t in the room, which is of course most of the time.
Benefits of having a great company culture
Company culture plays an integral role in employees’ overall job satisfaction and success. When people feel their needs and values fit with their employer’s, they’re more likely to enjoy going to work, get on well with their colleagues, and be more productive. And there are even more plus points:
- Higher engagement Employees who enjoy every aspect of their job are more engaged, and 88% of employees believe a distinct workplace culture is important to a business being successful.
- Reduced stress Work-related stress and mental illness costs UK businesses around £26 billion a year; a positive company culture should alleviate stress, not cause it.
- Better wellbeing 60% of employees said they would be more likely to recommend their organisation as a good place to work if their employer acted to support wellbeing.
- Increased retention When employees chime with the culture, they tend to stay– increasing retention rates and lowering costs associated with hiring.
- Increased productivity. When employees are aligned with the culture and engaged with their work, companies see higher levels of productivity. A team-orientated company that hires people who thrive in a collaborative environment will help drive productivity.
- Increased revenue. Engaged employees help drive business results, with engaged workplaces being 21% more profitable than those that are not.
- Easier recruitment When only 54% of employees recommend their company as a workplace, it’s those companies who receive more CVs than they have available jobs.
Types of corporate culture
When you look around your friends, chances are some will wear suits to work while others get away with slouchware; some will have a loose approach to keeping office hours, and others seem to socialise almost exclusively with work colleagues. All these behaviours reflect the cultures of the companies they work for.
These can be grouped into five categories:
- Hierarchy culture This is a traditional company with strict guidelines governing roles, dress code, and departments that don’t tend to interact. This risk-averse culture tends to focus on numbers, and is bottom-line driven, sometimes putting profit over customer experience. It’s the CEO who makes the decisions, leaving little room for input from employees further down the line, who may feel frustrated or ‘just a cog in a machine.’
- Team first culture A more enlightened company, that has employee engagement as its top priority, just above customer experience. Departments intermingle socially inside and outside work, good work-life balance is standard, people take pride in their environment, and feedback is solicited often and responded to thoughtfully.
- Elite culture An intense place to work, elite companies aim to take risks, disrupt and change the world. They hire the best from many highly-qualified applicants, expect them to make work a priority and put in long hours, promote them rapidly, and take notice when their people question things or suggest improvements. It can be a high-pressured environment, which requires superior perks and wellbeing programmes to balance out the intensity.
- Horizontal culture When the CEO makes you a coffee and asks the intern what they think of a new project proposal, the company is probably a horizontal. Common in new startups, the culture is collaborative, flexes with the market, feedback, and employee suggestions, everyone mucks in and gets their hands dirty, and the customer is king and queen.
- Clan culture This is a company with a friendly, family atmosphere where employees have similar interests and are heavily involved in the business. Often a feature of small companies and startups, there are fewer management levels, high employee engagement, and emphasis on teamwork and collaboration. The C-suite are less monster, more mentor.
Building and maintaining a company culture
Your C-suite and HR play important roles in shaping a strong culture. If you’re not sure what your culture is, or think you need some help reshaping outdated norms, values and behaviours, here are some things to think about:
- Introduce and demonstrate your core values through HR programs, such as your careers webpage, orientation, training, and performance management.
- Have a killer employer value proposition (EVP)
An EVP is the offering to current employees and potential job applicants that makes you a desirable employer. It has to be uniquely good to encourage top talent to choose you over your competitors, or elect to stay with you, and it has to be true and representative. A good one gives a flavour of company culture, and covers:
Opportunity: How employees can grow and develop
People: The quality of the leaders, managers and co-workers, and the working atmosphere
Organisation: The company’s prestige as a ‘great employer’ in its market
Work: How meaningful, challenging and fulfilling the job is
Reward: The salary, bonuses or share options, perks and benefits
- Hire for culture contribution, not fit
Progressive companies recruit new employees for culture contribution, rather just those who fit the corporate mould, to bring unique perspectives and help grow the business. That means, hiring employees that not only align to your company’s values, but also bring diverse experiences and backgrounds to the table. Diversity is good for business. Look for people who are doers, historically getting stuff done, and remember that your employees are representatives of your company, even outside work where people talk freely.
- Give meaningful workplace benefits
Installing a ping-pong table or a coffee machine won’t inspire your employees to make your startup a unicorn But an on-site gym, free canteen, unlimited holidays, life coaching, travel allowances, or bringing your dog to work are perks that make a real difference to people. 57% of people say decent perks are a top consideration when choosing to join a company.
- Give back
It’s no longer enough to see profit as the sole reason for your company to exist – it’s all about giving something back now. Whether it’s donating money to charity, sharing skills with local non-profits, pro bono work, paid volunteering days or going green, companies whose employees give back report fewer sick days on average, making the company more productive.
- Reward and recognise
From Employee of the Year, to a quick message saying ‘thanks for a great job’, appreciating your employees is pivotal for good company culture. Get HR to make sure that appropriate awards go to employees who best demonstrate company values.
- Take wellbeing seriously
According to a report In 2016, only 30% of companies had a wellbeing strategy in place, compared with 68.4% in 2019. But there’s still a way to go. For physical wellbeing, consider healthy snacks, exercise sessions, walking meetings, screen breaks. For mental wellbeing, social events, ‘venting’ channels for managing stress, team activities and creating a clean, pleasant environment.
- Give all employees a chance to voice their opinions by setting up inclusive discussions around culture to reshape cultural norms and behaviours. And…
- Use surveys to assess your company culture
Leaders may agree on organisational culture, but that doesn’t mean all employees see it in the same light. By collecting employee experience data you’ll be able to develop strategies that support your business’s objectives and goals. Our suite of survey tools can help you capture what your employees feel about your culture.
- Action issues highlighted by your surveys
When you have collected your employee feedback survey data. People will feel respected and listened to. And where issues cannot be actioned, acknowledge this and be transparent about what is, and isn’t, possible.
Examples of companies with great cultures
We have a 100+ volunteer force of employees called The Happy Crew, tasked with organising activities around moments that matter to our people. From bringing employees together to welcome new Zoomies, to planning company-wide events and intersecting with our community at-large, The Happy Crew is an important driver of employee experience at Zoom. To keep things organised, they even have their own leadership team (including a captain!) and various sub-crews.
The Happy Crew played a huge part in Zoom being recognized by Comparably as the work culture with the happiest employees.
– Lynne Oldham, Chief People Officer
You hired people you trust, so trust them to do the work you hired them for. Leaders should also normalise the need for breaks during working hours. Just last week, a senior leader here at GitLab shared in a public Slack channel that he’d be offline for a few hours to help with child care.
– Dave Gilbert, VP of Talent
Patagonia is a cause disguised as a company.
If you get arrested protesting in support of the environment, we pay for bail. For a nursing mom, we’ll pay for the mom and the nanny and the baby to travel. Those are not difficult decisions for Patagonia. They’re just in line with the culture.
With a cause so intense, we have to make sure our programs, policies, and procedures align with the culture. Anything we propose in HR that’s not aligned gets rejected immediately.
– Dean Carter, Chief Human Resources Officer
A pulse survey uncovered the biggest challenges facing Telefónica employees globally, and how the company could act in the right way.That feedback led Telefónica to take a number of actions, all of which have contributed to a higher eNPS.
Our Employee NPS is higher today [in 2020] than it was in 2019, which is testament to how we’ve supported customers and society in this unprecedented time, and our people’s sense of belonging. At the outset of the COVID-19 crisis, we sprung into action by building and launching a pulse survey with Qualtrics.
Longer workdays and working at home dealing with family responsibilities were our two biggest concerns globally. When we looked at what people wanted, over a quarter wanted more guidance on organising their day. Nearly half were after more information balancing work and life.
– Sergio De La Calle Asensio, Head of Engagement
Through our employee experience survey, we learned that our front line employees — for example, people in our retail and call center employees — felt like their voices weren’t heard as much as our corporate employees. So ‘Voice of the Front Line’ was born.
One key initiative within the ‘Voice of the Frontline’ is a quarterly call out for ideas directly to our frontline employees on how to improve the employee and customer experience. These ideas are visible to everyone, and can be voted up by employees. The creators of the top five voted ideas have the opportunity to present the idea to a panel of directors with the top three being presented to the VPs who then choose a winning idea for the company to focus on. It’s doubly beneficial — our leaders get great ideas about improving our customer experience directly from our front line and employees also feel heard and valued.
– Geoff Ho, PhD, Director of Organization Development Research
Zillow quickly moved as one of the first organisations to give employees the option to work from home for the remainder of 2020 to eliminate some of the uncertainty around returning to the office.
At Zillow, we give people the power to unlock life’s next chapter. Due to COVID-19, we’ve seen a real surge in people rethinking where they live and, ultimately, deciding it’s time to move – whether it’s moving closer to family for a support network or out of a densely-populated area. This shift is partly why we want to support our employees to continue working remotely, so they, too, can be in a space where they feel happy, comfortable, and safe.
– Dan Spaulding, Chief People Officer
Our employee engagement survey is a super valuable tool. It makes people feel heard and it also gives us insight. We follow up with focus groups, and we do store visits. We ask questions like, “If you were talking to the big boss, what’s one thing you would ask to change as a company?
– Karalyn Smith, former Chief People Officer