In recent years, the phrase “company culture” has evolved from a new concept to a buzzword that’s nearly lost all meaning. And yet, according to Forbes, company culture is now more important than ever before. We constantly talk about companies with “fantastic” culture and how a “nightmare” culture can drain the productivity (and life) out of your employees.
So how can you evaluate and improve your company’s culture when the phrase itself has entered the arena of vague corporate jargon?
It’s time to set the record straight.
What is company culture?
Company culture is defined as an organization’s vision, values, norms, systems, symbols, language, assumptions, environment, location, beliefs, and habits. Or, more simply put, it’s “the way things are done around here.”
Company culture encompasses everything from your employees’ belief in your company’s mission, to whether your employees eat lunch alone at their desks or take lunches together.
There are three levels of company culture:
- Artifacts: The obvious elements, like Happy Hours and Bagel Fridays. These are the physical, tangible things that even an outsider can see.
- Espoused values: These are the values the companies preach, like Apple with their focus on innovation or Tom’s Shoes with their focus on social awareness.
- Shared basic assumptions: The most esoteric of the bunch, these are the cultural elements that often go unsaid, but remain the foundation of company culture. This could be anything from “we all go bowling on Thursdays” or “you don’t ever question the boss”.
From the biggest vision to the smallest interaction, company culture is the driving force behind your company’s success.
Why is company culture important?
This study demonstrates it well:
Participants were asked to perform the simple physical task of lifting boxes while a researcher measured the compressive forces on the participants’ spines using sensors. The participants performed the same task twice, once while the researcher was friendly and encouraged positive conversation, and once while the researcher was visibly upset, overly critical, and did not encourage positive interaction between participants.
The findings were exactly what you would expect. The compressive forces on the participants’ spines increased when performing the same task in the negative environment.
The bottom line is, a negative work environment increases stress and decreases job performance.
Alternatively, a study at the University of Warwick found that workers in a positive environment were 12% more productive. Researchers conducting the study discovered that the happy workers were more efficient and able to increase work pace without sacrificing quality.
The research is clear—a strong, positive company culture can mean the difference between stressed, unproductive employees and happy, efficient employees.
The 3 R’s of a strong company culture
- Retention: Companies with a strong, meaningful company culture are more likely retain their employees. You’ve worked hard to attract star talent to your company; you need them to feel that they belong in your organization so they’ll stay long-term. And lower turnover means more cost-savings in hiring and training.
- Reputation: A solid company reputation will not only attract more qualified and ambitious employees, it also increases the value of the company in the financial market and builds a loyal client base.
- Return: Good corporate culture does pay. Over a 10-year period, companies that focused on improving their culture had a return on investment that was more than triple the ROI of companies in the S&P 500.
So what does this mean for your company?
If you’ve surveyed your employees and your company’s culture has been rated less than stellar, don’t despair just yet: there are ways to change your company’s culture.
Forbes recommends taking such steps as redefining your company’s clarity of purpose in the eyes of your employees, fostering employee engagement by focusing on how each worker fulfills that purpose, creating an environment of trust, and valuing continued learning.
With a little effort from leadership, you can harness the power of your company’s culture to create the happier workforce, the first-rate reputation, and the larger return needed to keep your company growing.