Even experienced entrepreneurs and business owners often struggle when building a strong cultural foundation for their businesses. In fact, some business owners don’t fully understand why it’s important for a company to have a strong culture or what makes a culture strong.
Company culture is not about ping pong tables, fruit baskets, or free massages.
But what makes for a strong company culture?
A strong company culture is a common set of beliefs and behaviors among the company’s employees. An organization’s culture is not something that your employees bring with them their first day on the job. It exists through careful cultivation or through natural evolution, and it plays a big role in the success and productivity of an organization.
Here’s what most leaders and managers misunderstand: leaders and managers cannot fiat the culture of their company. They can, however, support the culture, or take steps to undermine it.
Having a well defined, celebrated culture promotes an organization’s identity in a way that nothing else can, and preserving it is an integral part of achieving a flourishing business. In fact, one of the most important things you can do to ensure the success of your business is to create and maintain a strong company culture.
According to Professor James L. Heskett,
effective culture can account for 20-30 percent of the differential in corporate performance when compared with ‘culturally unremarkable’ competitors.
“A company’s culture and a company’s brand are really just two sides of the same coin,” wrote Zappos CEO Tony Hsieh in his acclaimed book Delivering Happiness. He continues:
What goes around the office comes around to the customer. We wanted employees that really believed in our long term vision and really felt like this was the right culture for them.
Now that we know what company culture is, how can you nurture your organization’s culture?
Hire Right
No company culture can survive without hiring the right employees. You want employees whose own values and goals align with your company’s. This starts with the hiring process.
Ex-GE CEO Jack Welsh put it this way:
It goes without saying that no company, small or large, can win over the long run without energized employees who believe in the mission and understand how to achieve it.
In fact, research shows that people whose goals and beliefs fit with their companies are more satisfied with their jobs, do their jobs more effectively, and are less likely to leave.
Hiring for cultural fit means having a defined set of values so you know what you want from prospective candidates.
- Make your criteria public so that everyone knows the values you’re promoting when hiring new employees. Many companies (such as Buffer, IDEO, and Asana) create presentations or slideshows so it’s easy to get a quick overview of what their culture and values are.
- Refer to these values when posting a new position, and make sure to discuss them with candidates early in the hiring process.
- Implement a solid onboarding process for new employees that expresses your company’s values and mission clearly. Create checkpoints during the first few months with employees to see how they’re doing, and gather feedback.
A company’s culture is a work-in-progress that can evolve and change over time. Ensuring that new employees feel comfortable to ask questions and talk with you will help keep everyone moving in the same direction.
Systematize Recognition
Recognize when your employees do something to embody your company’s culture. Public recognition and praise are good ways to restate what the values are, and can also build morale. Public praise is also an effective way to inspire the best work from your employees, as O.C. Tanner found.
37% of the study’s respondents said that recognition would motivate them to do better work. There were a number of other drivers of great work, such as pay, promotions, and autonomy, but recognition was the highest.
It’s important to integrate recognition into your company’s DNA, especially when you’re using it as a way to evangelize and extend your values and culture. Don’t just call out major achievements. Zappos is famous for how it recognizes and rewards its employees, from coworkers being able to nominate each other for $50 bonuses, to getting a really good parking spot if you “WOW” another employee.
Get Leadership on Board
One way that people learn is by example, and helping your company’s culture flourish means setting a good one from the top on down. To get an idea of what kind of behavior is acceptable, employees look to their managers, who look to their managers, all the way up to the executive level.
Red Hat CEO Jim Whitehurst said about corporate culture,
Culture is learned behavior — it’s not a by-product of operations. It’s not an overlay. We create our organizational culture by the actions we take; not the other way around.[…] It’s easy to think that building a culture is about other people’s behaviors, not how you act as a leader. But I believe that culture change begins when leaders start to model the behavior they want the organization to emulate.
In a Twitter post, Zappos CEO Tony Hsieh likened this to the murmuration of starlings, where giant flocks of birds play a breathtakingly sublime game of follow-the-leader, always moving in unison behind a group of lead birds.
Spreading your culture throughout your organization works similarly: start by setting the example, and it will propagate throughout the rest of the company.
Preserve Company Traditions
Companies may not be families (sorry, Michael Scott), but many of the traits of a healthy family are found throughout a company’s culture. In addition to communication, respect, good examples, and recognition, traditions play a large role. Integrating and preserving company traditions can make them into signposts through time that employees can rely on.
SinglePlatform’s Scott Britton recognizes the value of tradition: “One
One aspect that separates one company from another are the people and the things that you do together. When you do fun, rewarding things as a company, it’s awesome. And when those things feel unique to your company, I think they’re all the more powerful.
Whatever form your traditions take, try to incorporate elements of your company’s values into them. For example, if one of your company values is, “We go above and beyond, and give back when we can,” you could set up scheduled volunteer days where employees get the day to help a charity they believe in. At the end of the day, everyone could gather to share stories and experiences from their day with the rest of the company.
Whether it’s a quarterly “all-hands” meeting or bi-weekly game nights on the rooftop patio, company traditions bring together people in a way that makes your organization unique.
Encourage communication
Workplace communication is a critical element of any company’s success. We can’t collaborate effectively without good communication. Communication is a key component to a company’s culture. Other important components include how information is shared, decisions are made, and how your employees interact.
Create a workplace where employees feel empowered to share their thoughts, ideas, and comments. Your executive team should be equally empowered to listen and act on what they hear. Otherwise, you risk misinformation and communication breakdowns that threaten your employees’ ability to innovate and work together.
Not only do your company’s values thrive and spread through good communication; good communication means good business.
A 2010 WillisTowersWatson study on the costs and benefits of good communications found that:
companies that are highly effective communicators had 47 percent higher total returns to shareholders over the last five years compared with firms that are the least effective communicators.
To promote strong communication, create an open dialogue between your executive team and the rest of the company. You want to encourage communication by making sure that employees are not afraid to speak their minds, so show them that all ideas, comments, and ideas are welcome. Find and integrate tools to enable effective communication internally, whether using internal Slack channels or something as essential as scheduled one-on-ones between managers and their direct reports.
Your company’s culture is a living artifact that evolves and grows over time. But remember, a great company culture cannot be built overnight. It takes time, planning, and careful action. Leaders and managers must ensure that they’re encouraging good values and behavior by promoting:
- proper information sharing
- strong communication
- careful hiring
- encouraging positive traditions
- public recognition of success by employees.
Do these things well and you’ll build and preserve a strong company culture. Ignore them and you’ll quickly find yourself trailing your competitors.
