Written by: Rosie Powers
On a micro level, it might seem like the actions we take day in and day out at our jobs don’t have a large impact on a company as a whole.
But when you see the connections between company culture and larger concepts like improved staff retention, employee engagement, and overall job satisfaction, the impact is clear. The everyday happenings in a company’s culture matter, and they can play a large role in success or failure of an organization.
Leaders today must face a harsh reality that many employees are not as tied to their jobs, or the company at-large, as in decades past. As younger generations enter the workforce, the modern workplace must focus on company culture, and with it work-life balance, to attract and retain talent.
Data supports this, as research by Deloitte found that 94 percent of executives and 88 percent of employees believe a distinct corporate culture is important to a business’ success. But before we go further, let’s start with the basics.
What is Company Culture?
Company culture can be defined as the “personality” of an organization. Culture is not purely centered around the personalities of an office, although those can greatly impact its success or failure. Culture depends heavily on how employees and leadership live out higher-level concepts such company values, transparency, communication, and engagement in their everyday work. Ultimately, these actions culminate into how an organization defines itself.
Company culture is largely dependent on an organization’s leadership and vision. An employee’s perception of what the company stands for, as well as how leadership embody those values, plays heavily into the positive (or negative) feelings an employee has, ultimately shaping culture.
Is Company Culture Really That Important?
The ecosystem that culture creates is paramount to a company’s success. When leveraged successfully, it has even boosted the productivity. In fact, a survey by Deloitte found that 82 percent of employees surveyed believe that culture is a potential competitive advantage. That’s quite a shift for a concept that, until recently, was not considered by companies to be an asset at all.
Company culture as a competitive advantage is rooted in a couple points. Firstly, an open, creative culture provides a more welcoming environment that employees enjoy returning to each day. And as we’ve said previously, this feeling can be infectious among peers. But what’s more is the impact this has on innovation, as employees feel a greater sense of ownership over what they are creating. Companies that prioritize positive and collaborative work environments, such as Zappos, have found that giving employees increased creative freedom resulted in more innovative product ideas.
Though famous for his ideas around company culture, in 2012 Zappos CEO Tony Hsieh instituted a holacracy amid fears that the growth of the company was taking away from its culture. In this structure, teams are replaced by concentric circles where every employee is empowered to make decisions. Although a difficult road – many employees took buyouts during this transition – the company still had some of its highest operating profits in 2014, which many attribute to the increased creativity that these circles fostered.
A successful company culture also helps reduce burnout. A report by Kronos Incorporated found that 26 percent of employees surveyed attributed burnout to a negative workplace culture; 29 percent attributed it to seeing no clear connection between their role and the overall corporate strategy. Due to its existence in the everyday workflow of an employee’s role, company culture can easily influence success – or lead to burnout – in combination with these other factors.
Related: The Case for Joy in the Workplace
What this Guide Covers
Company culture has so many touchpoints with other aspects of our work lives. In fact, employees’ overall ratings of their company’s qualities are 20 percent higher at companies with strong cultures, data shows. In this guide, we’ll take a look at what affects company culture, as well as strategies for how you can leverage these concepts to improve the culture in your organization. Here’s what we’ll cover:
- Company Values
- Trust and Transparency
- Peer Interactions
- Employee Engagement
Company culture is heavily dependent on employees’ perceptions about leadership. Is leadership held to the same professional standard that employees and mid-level managers are? What values do leadership live out in their everyday lives and work? How do those values align with company values?
Culture is “a direct reflection of how well leadership lives up to what they say,” former Starbucks President Howard Behar said at TINYcon this year.
Despite this, only one in three executives (28 percent) report that they understand their organization’s culture, according to a report by Deloitte.
This also hints at a disconnect between company values and the culture itself. At Starbucks, Behar avoided this by involving employees at every level in the company in the selection of company values. This helped align Starbucks around these values, creating a solid base for building company culture while also enabling a sense over ownership over these values.
So – where do you start? How can leadership start thinking about culture from the beginning – or re-envision a culture gone wrong? For Behar, it all comes down to authenticity.
“Too many of us go through life changing our hats because we’re afraid of the consequences if we leave their other hat on. That’s not a way to live your life,” Behar said.
Authenticity helps employees have an understanding of who their leadership really are. They feel approachable, perhaps even relatable. In the long run, authenticity also helps build trust and transparency, which we’ll elaborate on below. All of this, in turn, leads to a greater understanding of personal and company values alongside happier employees: crucial ingredients of a successful company culture.
Company values should be more than statements written on your company’s “About” web page. Yet unfortunately, for many companies, that’s the extent to which employees interact with these values. What’s more is that even among employees who know what these values are, over a third of them don’t believe in them. According to one study, 33 percent of employees don’t believe their company’s core values align with their personal values.
So how can your company use values to strengthen company culture? As we’ve written about before, companies should center values around their employees. As Behar mentioned above, this made employees more actively engaged in these values, since they felt more personally connected to them. And according to data gathered byMcKinsey, when people are truly invested in an initiative, it is 30 percent more likely to stick.
Part of making these values relatable is making them attainable. Vague values like Uber’s “always be hustlin’” might not resonate with everyone, and also doesn’t give employees much direction. By making values attainable, employees can feel more attuned to the company’s goals and vision, feeling as though they have something to strive for within their role. By integrating these values into everyday actions, companies create culture around them.
Trust and Transparency
Trust is hard – especially in a professional setting. But despite spending a good portion of our waking hours at the office, trust in leadership at many companies is lacking. According to a Harvard Business Review Survey, 58 percent of people say they believe strangers more than their own boss. Let that statistic set in for a moment.
Moz creates both customer and employee-facing transparency with the publication of its “Moz Year in Review” annual report, which calls out the company’s highs and lows for the year. Moz has been publishing the report since 2012.
“Most companies believe that it’s not good to share that information, hide your dirty laundry,” Moz CEO Sarah Bird said at this year’s TINYcon. “But it got customers engaged emotionally with the journey of the company. The annual report is our opportunity to own mistakes and to show commitment to customers about doing better and working towards solutions.”
In the era of social media and review sites like Glassdoor, it’s easy for current and prospective employees to see what is and isn’t working. Traditional public relations strategies of decades gone by are no match for the virality of these platforms. Instead of hiding, open communication promotes transparency – the company “owning up” to what has happened.
But transparency doesn’t just live in the release of data. Transparency and clarity around expectations, and sticking to those expectations, are crucial keys to good leadership.
“It took me a long time to realize that my own niceness was getting in the way,” Bird said. “I can be nice and give people respect, but also know when to say, ‘Hey, this isn’t working.’” Bird said that as soon as she, and her management teams, began to embrace this concept, things started to change.
Despite wanting to be “nice,” managers who are hesitant to have these tough conversations can fall into the trap of not clearly communicating expectations, which can lead employees to feel a lack of transparency around the work they are supposed to complete.
Not only that, but it can also cause employees to question the strength of their leadership and the direction of the company as a whole, leading to high turnover. Astudy by Tolero found that a lack of trust in leadership was cited as the reason 45 percent of employees surveyed quit their jobs.
How can leadership build transparency and company culture simultaneously? As mentioned previously, the two have a symbiotic relationship. By having regular stand-ups and check-ins with employees, managers and leadership can accurately communicate company goals and how the employee fits into the success of those goals. Increased leadership exposure to staff, such as town hall-style meetings, can also help with employee sentiments about the executive’s approachability. Employees who feel a greater sense of transparency with their leadership are more likely to feel satisfied in their workplace, resulting in a positive company culture.
Although leadership plays a crucial role in company culture, so do peers – employees that likely interact with each other far more frequently than with leadership.
As we’ve written about before on TINYpulse, there’s a correlation between employee appreciation and company culture. Companies that recognize employee achievements create individual fulfillment of that employee in their role. Our 2018 Employee Recognition and Appreciation Report found that well-recognized employees rate their enthusiasm for reapplying for their job 32 percent higher than workers who aren’t well-recognized.
But on a broader cultural level, a happy employee is more likely to spread this positivity with their peers, inspiring them to strive for the same achievement and recognition. Positivity – or negativity, in toxic cultures – has a domino effect among peers.
As a manager or leadership, it might feel challenging to influence opinions among employees. This is especially challenging in environments where employees distrust leadership. So how can you turn around your company’s culture with peer relationships?
In addition to implementing more transparency within leadership, consider implementing more transparency and open communication among peers as well. Our“The Beginner’s Guide to Great Leadership” found that when given the opportunity, 44 percent of employees organically give each other recognition on a daily basis. By utilizing open recognition forums, managers can create a culture of open and supportive communication not only among each other, but department or company-wide. This, in turn, has a symbiotic relationship with retention – the same study found that workplaces with these programs enjoyed a 31 percent lower voluntary turnover.
Research shows that leaders spend 80 percent of their day communicating. It seems like a lot, until you consider how connected we are to our email inboxes and other communication platforms in the smartphone era. That’s a lot of time. But is all of that communication two-way? Think about a good conversation, perhaps one you’re having with a friend. It’s not just you talking – it requires listening too.
Office culture is no different. Leadersync CEO Frances Roy told us at last year’s TINYcon that listening is crucial to a company’s success, not only from leadership but also in engagement surveys. Are your company’s HR and management actively following up on survey results? Are they pulsing frequently? Or are assumptions about office culture being made that don’t listen to the results? As we’ve written about before, the frequency of your survey pulsing says a lot about your company culture, and more specifically, leadership.
Roy said that it’s important for leadership to remember that communication is often not about seeking solutions, but about someone wanting to express themselves while connecting with others. Dan Golden, founder, president and chief search artist at BFO says that companies who tell employees what the problems are – a win for transparency – also need to include employees in communication about what the solutions are. If the company dictates a solution, employees are less likely to feel invested to help achieve the company’s goal to overcome the problem.
Another way to focus leadership on listening is to create focus groups for feedback outside of engagement surveys. Ana White, executive vice president at F5, told us at TINYcon this year that when she joined the company, her goal was to create a culture of listening by setting up virtual focus groups with employees worldwide. This included listening to feedback from employees at every level in the company. White drew from her previous experience working at Microsoft alongside CEO Satya Nadella, who always said “culture eats strategy for breakfast,” putting culture at the forefront.
Put bluntly, the overall success or failure of your company in achieving its goals relies heavily on the success of culture itself. White said that F5 views itself as an ecosystem of interconnected individuals. When viewed through this lens, it becomes clear how interdependent culture is on employees and leaders alike, bringing culture to life with their everyday actions.
As we’ve written about previously here at TINYpulse, “an ‘engaged employee’ is defined as one who is fully absorbed by and enthusiastic about their work and so takes positive action to further the organization’s reputation and interests.” To put it more simply, culture is the way things work in your company – engagement is how people feel about it.
Think about it: An employee that feels fulfilled in their role are very likely to enjoy their work environment. The positivity that employee engagement creates, in turn, has a direct impact on company culture.
Despite this, 87 percent of organizations cite culture and engagement as their main challenges, according to a report by Deloitte.
So how can you leverage employee engagement to strengthen your organizational culture? Measure employee sentiments about engagements, and measure it often. Despite knowing the need for effective engagement and its impact on culture, 64 percent of organizations only measure engagement annually, according to a report byDeloitte, despite an emergence of tools that enable companies to measure data more frequently. Tools like TINYpulse allow employees to submit feedback anonymously, and allow company leadership to measure results frequently.
It’s not enough to merely collect this data, though. As King County’s Vince Vu told us at TINYcon this year, data should tell a story. Compare data over time to observe trends. By mapping data from different time periods, Vu and his team utilized discrepancies in employee surveys to unearth a larger issue of leadership mistrust in their organization. Vu also said human resources staff should work hand-in-hand with data analysts to formulate effective surveys for overcoming culture hurdles.
“Don’t be afraid of your data analyst! We can help each other,” he said.
The Bottom Line: Investing in Company Culture is Worth It
As you can see, company culture is a crucial ingredient to the success (or failure) or your company’s goals, and ultimately, its bottom line. Given this importance, you’re likely thinking, “How do I get started on this? NOW?!” Let’s regroup with a TL;DR about where to begin.
- Company leadership must embrace authenticity and practice what they preach. If employees believe leadership are held to a different standard than others within the company, culture will suffer. Authenticity also makes leadership easier to relate to, and more approachable to employees when they feel they need to communicate concerns.
- Transparency and trust matter. Hand-in-hand with authenticity, your company should create opportunities to include employee feedback in big decisions or goal-setting, also communicating successes and setbacks with the goal for collaborative solution-making.
- Create a set of company values that includes, and reflects, your employees. The values should reflect the work being done in your company every day, and also reflect the interests and needs of employees at every level in the company. This helps create ownership over these values, and more investment in the success of goals relating to them.
- Interactions among peers matter perhaps even more than interactions between an employee and a manager or executive leader. Peers value each other’s opinions quite highly, and the spread of positivity or negativity among them can happen quickly. By fostering an environment that allows peers to recognize and celebrate each other, companies can foster a strong culture rooted in positivity.
- Don’t just talk – listen. Similarly to the values point above, leadership and managers need to listen to the concerns and ideas of the employees they work with. This ultimately creates a culture of more open communication where employees feel as though their ideas and opinions are valued.
- Double down on employee engagement. Engaged employees, as we’ve shown, are often happier at work and more invested in their role. The more engaged an employee is on an individual level, the more likely they are to share this success with others. By conducting survey pulsing frequently and strategically, companies can learn what employees feel is most important about culture and implement solutions accordingly.
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