The Importance of Positive Company Culture and How to Create It

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A fascinating study conducted by Deloitte, Core Beliefs and Culture, looked directly at the importance of a positive culture within a corporate structure. It found that the overwhelming majority—94 percent of executives and 88 percent of employees—agreed that a “distinct workplace culture is important to business success.”

The same study found a direct correlation between employees who say their organization has a strong culture and can clearly explain that culture to family and friends, and those who say they are happy at work (84 percent) and those who feel valued at work (86 percent).

Interestingly, there is a clear difference in the Deloitte study between executives and employees when it comes to the importance of financial incentives in shaping positive company culture.

The report reveals that 62 percent of executives believe competitive compensation is important to company culture, compared to 33 percent of employees, while 65 percent of executives think the financial performance of the company affects company culture, compared to 24 percent of employees.

This survey highlights how less tangible factors such as regular communication, employee recognition, and access to management/leadership are strong indicators of a healthy company culture. The results suggest that companies must cultivate a culture based on more than just financial motivations if they want their employees to thrive and feel valued.

 

Importance and Benefits of a Healthy Company Culture

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The benefits of having a strong and positive company culture are many—and all directly impact the success and performance of a business. Here are just some of the key benefits:

Attracting top talent—A company that can offer a strong culture will have a significant advantage over rival organizations when attempting to attract the best talent. Research by Jobvite indicates that 46 percent of job seekers consider culture to be very important and 88 percent say it is at least relatively important.

Loyalty and retention—Employee turnover is inevitable in business, but companies with strong cultures experience a far smaller turnover rate than companies with no discernible culture, or worse, a negative one. UK startup Breathe HR found that a poor culture costs British companies £23.6 billion per year in turnover, for example. A positive culture makes employees feel valued and work more enjoyable, which can increase loyalty.

Better employee performance and productivity—A positive culture creates a healthy work environment and ensures employees can thrive, which leads to greater work performance and productivity. In a survey by Eagle Hill Consulting, 77 percent of respondents said that culture affected their ability to do their best work. Conversely, a negative culture where employees feel stressed and demotivated can contribute to poorer performance.

Greater collaboration—A healthy company culture is built upon open communication, social interaction, and teamwork—assets that naturally lead to better collaboration among staff and therefore better results for the company.

Better morale, less stress—It’s been shown that one of the most effective ways to maintain morale in the workplace is to cultivate a positive culture. Equally, companies with a strong culture will have fewer employees suffering from stress and stress-related illness, which in turn leads to improved performance and productivity.

 

What Makes a Positive Culture?

The benefits of a positive culture are clear—but what does “positive” culture really look like? There’s no hard and fast rule, but this Harvard Business Review article nails down a few of the essential qualities of a positive workplace culture, based on the authors’ research:

  • Friendship and caring: People are interested in and maintain responsibility for their colleagues as friends.
  • Support: People in the organization support each other by offering compassion when someone is struggling.
  • Forgiveness: Rather than focus on assigning blame, people forgive mistakes.
  • Inspiration: Employees inspire each other.
  • Meaningfulness: People believe their work has meaning and talk about it in these terms.
  • Respect, trust, and gratitude: People treat each other with integrity.

Note that these qualities are at once simple and complex—simple because it’s obvious that a friendly, supportive environment creates a positive environment; difficult because there’s no magic solution for creating an environment like this. It takes time, and leaders set the tone in every interaction they have, every day.

 

Steps and Considerations for a Positive Company Culture

There are many tangible and intangible ways leaders can cultivate a positive company. These steps can be applied to both big corporations with hundreds of employees and startups with smaller teams.

Leadership starts at the top—To successfully sustain a positive culture, all company members must buy in to the values the culture is based upon. (Culture shouldn’t be considered “HR’s job.”) This will set a benchmark for employees to follow.

Build trust—Nothing can damage a positive company culture quite like a lack of trust in the workplace. One way leaders can build trust is to stop micromanaging their teams. Employees need to be trusted to do their jobs without overbearing managers. Find the right balance so workers are offered the freedom to make at least some of their own decisions, but are still kept accountable for their work.

Treat people like they’re more than just workers—You can tell a lot about a company’s culture by its employees’ work-life balance—namely, whether they have any at all. Recognize that your employees are people with lives outside work. You can do so through policies like flexible hours and extended leave, but also in more intangible ways. Simply offering compassion when employees are dealing with personal crises can go a long way toward building a positive culture.

Offer career advancement opportunities—This could be in the form of clear pathways to promotions, trainings to improve and learn new skills, mentorship programs, or workshops to aid in personal and professional development. Making employees feel like their company views them as a long-term part of the organization leads to greater loyalty and smaller turnover rates.

Communication is key—So much of a positive company culture, and indeed the successful implementation of the ideas mentioned above, comes down to communication. Get your company’s values and culture across through open communication and create an environment where honest debate is prevalent and active listening is valued.  Transparency can build trust.

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