Company Culture

Company culture is important for many reasons. Here's why...

First published on Friday, Oct 09, 2020

Last updated on Thursday, May 25, 2023

As an employer, your employee’s happiness and productivity should be one of your main priorities. And if you're seeing a decline in both of these, it could be down to your company culture.

It's important that you have a strong culture within your company. Failure to do so can lead to you losing your best staff, an increase in workplace stress and a decrease in employee morale.

In this guide, we'll discuss what company culture is, the benefits of a strong culture in your business, and how you can create one.

What is Company Culture?

Company culture refers to the behaviour, attitudes and shared values of a company and its employees.

It's the way people feel about their job, the work they do, where they see the company going, and what you're doing to get there. The importance of company culture in the modern workplace shouldn't be ignored.

Why is Company Culture Important?

Company culture is an important element of business success. The culture of a business can directly affect employee and company performance.

If employees feel there isn't a healthy culture in your business, they may seek employment elsewhere. You need to ensure both you and your employees are working towards the same goals and values. This'll lead directly to positive business results.

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What are the Different Types of Company Culture?

There are four different types of company culture, each of them important in their own way. So, you should become familiar with them. Let's discuss each of them in more detail:

Clan Culture

The clan culture is important because it's people-focused and aims to prioritise communication between current employees and the leadership team.

This form tries to embrace change by breaking down barriers between top-level staff and employees. This is done by encouraging mentoring, which could have a positive impact and help employees to develop organically.

Adhocracy Culture

Adhocracy culture is focused on how the working environment can help create your top talent. Also known as the creative culture, this is aimed at risk-taking and creating new ideas to increase growth. This can help to give your company a competitive edge.

This type is important as it helps your employees to be creative and communicate ideas to other team members.

Market Culture

Market culture is a culture that focuses purely on results, where the success of the business is seen as more important than job satisfaction.

Often found in sales-based roles, it involves regularly meeting targets and setting goals. This type of company culture doesn't have a strong relationship between senior staff and employees.

Hierarchy Culture

Hierarchy culture is a type of company culture that focuses on a clear direction set by the leadership and management team. It values processes and well-established roles.

Often found in the corporate world, it involves a clear chain of command and a continued separation from executives and lower-level employees.

How to Evaluate Your Company Culture?

As an employer, it's important to evaluate the culture within your company. There are many things you can do to do this. Such as:

  • Ask your management team to describe the company culture.
  • Ask your employees to describe their ongoing experience working for you.
  • Try and find parallels between the explanations from management and employees.
  • Try and find examples of your company values being used daily.
  • Examine past employee surveys and exit interviews.

What Contributes to a Company's Culture?

There are different elements that contribute to an unhealthy or healthy company culture. It's important you become familiar with each of them as they all play a big part in the overall culture of a company.

Understanding them will go a long way to finding what sort of culture you have in your business. Let's discuss each of them in more detail:

How You Treat Your Employees

How you treat your employees is an important part of both their professional growth and the culture of your company. For example, having an employee recognition scheme in place will mean you have a different form of culture to a company that doesn't.

Treating employees correctly is an important part of creating a positive culture in your company. You should try and avoid harvesting an attitude where it's correct for managers to take the credit. This could also put off potential employees from joining your business.

Your Company's Mission

The mission of your company is an important contributing factor to its culture. Having a strong mission and corporate values can lead to your employees having a shared sense of purpose.

This sense of purpose can help new hires settle into the business, leading to positive results and increased employee morale.

How You Make Decisions

How you make business decisions can have a direct influence on your company culture. Involving your employees in major decisions for your company can lead to a great culture in your company.

If employees feel their opinions aren't valued during the decision-making process, it may make them feel they aren't an important part of the business. This could have an effect on your company culture moving forwards.

How Your Communicate With Your Employees

How you communicate with your employees is an important part of your company culture. Having a clear, open, and friendly communication style with all your staff is an important relationship.

You should openly communicate with your employees regarding new ideas, business performance and areas to improve.

Your Employee Expectations

How you manage the expectations of your employees can play a major part in your company culture. You should be careful to not expect too much of your employees, but offer some flexible working options.

Be careful if you're asking employees to work in the evenings or on weekends. This could lead to a negative work-life balance, employee unhappiness and increased employee turnover.

Someone writing something down on a notepad.

What is a Toxic Company Culture?

Toxic culture is typically formed due to one of the two following reasons, either due to a results-based leadership or company culture immaturity. Signs of your company culture becoming toxic are:

  • Lack of communication within the company.
  • Disrespectful or weak leadership.
  • Discrimination or harassment.
  • Micro-management.

Many employees won't want to be part of a toxic work environment, leading to an increase in employee turnover. Other issues include:

  • A lack of enthusiasm from your employees.
  • An increase in workplace stress.
  • A decrease in employee morale or productivity.

Now you're aware of what a toxic culture can do to your business, you need to understand the benefits that come from creating a strong one.

Benefits of a Strong Company Culture

Having a good company culture in your business can lead to many benefits that shouldn't be ignored. All of which will have a great effect on your company.

Let's discuss some of the benefits of a positive company culture in more detail:

Increased Employee Retention

Your company culture can have a direct and important impact on your employee retention and turnover. Whereas a toxic one can increase turnover, a strong culture can help a company attract and retain its best employees.

If an employee feels their development goals are being matched by the company they're working for, they’re likely to stay with you for longer.

Increased Employee Engagement

Employee satisfaction and engagement are important cornerstones of a successful company. The stronger your company culture is, the more your employee happiness will improve.

Having engaged employees can help your culture to keep on improving. This can be done by completing engagement surveys which could help you find quick fixes and areas to improve that you previously weren't aware of.

Aids Employee Development

A strong company culture can vastly improve your employee's development. A culture aided by communication can help your employees to raise any concerns they have. As well as communicating their goals and working hard to achieve them.

The more developed your employees are, the more success that will come to your business.

Increased Productivity

If you foster a strong culture within your company, it's more likely your employees will want to work harder in their roles. This won't lead to just an increase in productivity, but also employee happiness and quality of work.

The more productive your employees are, the larger their output and ultimately - the more your company will grow.

A Decrease in Workplace Stress

Strong company cultures can also lead to a decrease in workplace stress and an increase in employee health and well-being. You want to foster a culture in which your employees feel comfortable raising any concerns they have regarding their workload and possible stress.

Person using a tablet at a desk with a coffee

How to Build a Strong Corporate Culture

As discussed previously, a strong culture is key to your company's success. And, there are many things you can do to create a great company culture in your business. Doing so brings a range of benefits for both you and your employees.

Let's discuss how to build a strong culture in more detail:

Establish Company Core Values

You should create your company values. These values dictate everything in regards to your company culture, such as how employees should treat each other and employee expectations. They should maintain an element of your own personal values, as well as some for your company.

Involve your management and work with them to clearly define your values which you can bring into the daily running of your business.

It's important to make all your new employees aware of your values, giving yourself the best opportunity to create a strong company culture.

Set Company Culture Goals

Use your newly created company values and create company culture goals. These goals should be ongoing with regular reviews. Ensure you communicate with your employees to discuss your company's values and how this can equate to achievable goals.

Involve Your Entire Workforce

Speak with your employees to gather their thoughts about ways to improve company culture. Another angle you could take is to send out employee surveys asking for feedback on what employees like about your culture and what they think needs improvement.

Surveys are a great way to gain an insight that you were previously unaware of. Be sure to not take any of the feedback personally. Instead see it as a constructive way to improve things.

Develop a Plan for Using Your Workplace Culture

When creating your company culture, you must think about how you're going to use it on a daily basis. This may include a morning meeting with employees and their line managers to discuss ongoing goals.

There's no point in spending time creating a company culture if you're not going to use it within your business.

Get Advice on Company Culture with BrightHR

When running a business, ensuring your employees stay with your company for a while should be one of your main priorities. This can be done by creating a strong company culture. A great culture can lead to a range of benefits to you and your employees. Such as happiness and productivity. Not doing so can lead to you losing your best staff. If you need any advice when employees resign, we are on hand to help. Our BrightAdvice helpline. Give our friendly and helpful team a call on 0800 470 2432.

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