Company Culture: Definition, Drivers and Best Practice Examples

Ask 20 executives for their definition of company culture, and you are likely to get 20 different answers. Company culture is one of those vague concepts. We all know an unhealthy company culture when we see one. However, we struggle to put into words what a healthy one looks like.

This post covers all the essentials. We look at the following:

  • The definition of company culture
  • Why company culture is important
  • Six main drivers for a strong company culture
  • Company culture good practice examples
  • How intranet software can promote company culture

There’s no doubt the global pandemic and wholescale shift toward remote working has seen workplace cultures change faster than ever.

If you’re tired of shaking your head about how to get distributed teams collaborating in a virtual space and strengthen your company culture, there’s hope. You want a culture built on values like clear communication, transparency, accountability, and teamwork, but you’re unsure where to begin. Let’s start with the basics by exploring the definition of company culture.

What Is Company Culture?

According to Patty McCord, HR Executive and former Chief Talent Officer at Netflix: “It’s the stories people tell. It’s the way people operate when no one’s looking. It’s the values you hold dear that you know your colleagues do [as well]. It’s the expectations of how people are going to behave, and what gets punished and what gets rewarded.”

happy-employeesGallup has come up with an even simpler definition. They believe that organizational culture comes down to “how we do things around here.”

In essence, company culture is a shared set of values, attitudes, and practices that shape your organization. Think of it as the operating system that supports everyday decision-making and business processes.

Company culture defines how people feel about their work and the shared values that guide the business. In short, it’s the vibe that hits you as soon as you walk into a workplace. It’s your unique personality.

Why Is Company Culture Important?

Here are a few statistics to illustrate why company culture is so crucial.

  • According to one LinkedIn survey of executives, two-thirds believe a company’s culture and values are the most important factor when considering job opportunities.
  • Deloitte reports businesses that actively manage their culture have 40 percent higher retention.
  • And in another Deloitte survey, an overwhelming 82 percent of respondents said they believed culture was a potential competitive advantage.

The bottom line is there’s a clear relationship between company culture, performance, and productivity. With a healthy company culture, employees understand what’s expected of them. They know the required outcomes and act accordingly.

hr-communicationsOrganizations with strong company cultures tend to have workers that are enthused about their jobs. Rather than going through the motions, these employees feel a strong sense of purpose that drives them to go the extra mile. And happy, engaged employees not only stay longer in the job, but they are also more productive.

Gallup goes further and suggests that company culture can be a major differentiator for your business. Gallup has identified the following four areas where company culture can make all the difference.

  • Company culture helps you attract the top talent.  A strong company mission and purpose are essential for winning over elite candidates in the marketplace.
  • Company culture supports alignment. Your employees will be singing off the same hymn sheet with a shared sense of purpose and direction.
  • Company culture provides a focus for employee engagement. It sets the framework for decision-making, team collaboration, and staff morale.
  • Company culture affects performance and productivity. According to Gallup, there’s a strong positive link between workers’ understanding of the company culture and business health measurements.

In the face of such compelling evidence, investing in your company culture is well worth the time and effort.

What Makes A Strong Company Culture?

Healthy company cultures don’t just happen overnight. Like all good things, it needs to be nurtured and developed.

High-performing companies have several critical elements in common. So, if you are struggling to get off the ground, then here are some ideas to get you started.

Six Main Drivers For Company Culture

1. Leadership

Company culture comes from the top. Actions speak louder than words. Business owners and executives need to model the behaviors and values expected of employees.

2. Purpose

A clear sense of shared purpose is essential for a strong company culture. Communication is vital here. Managers and executives are responsible for ensuring the message gets through loud and clear to all staff.

3. Success

Goals and objectives are aligned with the company’s purpose. And achievements are celebrated collectively.

4. Opportunity

Staff development is a priority for organizations with healthy company cultures. Workers feel as though they can grow and develop and are supported to do so.

5. Appreciation

Staff are recognized for the work that they do and are appreciated for the value they add. Whether it’s formal employee recognition schemes or simply a thank you culture, workers know they are valued.

6. Wellbeing

Employee wellbeing is central to a strong company culture. Businesses with good company cultures value and invest in workers’ health and wellbeing.

cultural-audits

Company Culture Good Practice Examples

Rather than reinventing the wheel, there are plenty of good practice examples out there. Here’s a selection of organizations that have nailed company culture. Learn from the best and consider implementing some of these ideas in your business.

Netflix

The streaming giant is often cited as an exemplar of strong corporate culture. And with good reason. When it comes to company culture, Netflix was a trailblazer, setting up its Culture Deck back in 2001. The Culture Deck breaks down Netflix’s culture, core values, and mission into easily digestible, bite-sized chunks.

The deck is all about empowering employees and being upfront about company goals. Nine company values are identified, and each is explored in terms of what it means in the workplace. For example, one value is ‘honesty.’ In the workplace, Netflix translates this as ‘You only say things about fellow employees you will say to their face.’

The culture deck also encourages employees to develop a question-based mindset. The culture deck challenges employees with direct questions to support self-reflection. Here’s an example: ‘When one of your talented people does something dumb, don’t blame them. Ask yourself what context you failed to set.’

Zoom

The video conferencing giant is another often-cited example of good company culture. Zoom’s culture is about ‘delivering happiness.’ And to this end, they have set up a ‘happiness crew.’ The crew has a wide brief to develop what else but the happiness of employees. This covers volunteering opportunities, training and development, mentoring, and employee recognition.

Zoom’s dedicated happiness crew ensures that the company culture continues to grow and evolve. Who could have foreseen even 12 months ago that remote working would become the norm across the globe. Zoom’s happiness crew is able to re-evaluate company culture in response to changing operations and expectations.

Spotify

The Swedish music-streaming platform has offices in 17 countries worldwide and has 5000+ employees. With such a dispersed workforce, maintaining strong company culture is a priority. Collaboration and social connection are essential aspects of Spotify’s corporate culture. And the company has set up a specialized People Experience team within the broader Culture team.

Alongside work-related ‘squads,’ ‘tribes,’ and ‘guilds,’ the business also connects team members based on communities of interest such as photography. However, with all Spotifiers (as team members are called) now working from home, efforts to keep staff connected have been ramped up.

Spotifiers can now join in with virtual fitness and health classes, plus music quiz challenges and even the Spotify’s Got Global Talent contest.  Furthermore, the organization has developed a weekly program called lunch and learn. The idea is to learn something new and connect with colleagues. Topics have ranged from how to make a podcast to learn how to DJ.

The company prides itself on its unique supportive, innovative, collaborative, and playful culture. And it is making sure that strong company culture is maintained despite the challenges of the pandemic.

Company Culture Good Practice Examples In Small Businesses

It’s not only the big corporates who have a monopoly on healthy company cultures. Small to medium-sized enterprises can do just as good a job.

Workplace monitoring site, Comparably, recently published its Annual Best Company Culture Awards. Alongside the likes of Google and Adobe were many SMEs, including supreme small company winner, Eargo. The organization develops audio enhancement technology and has a simple mission statement: to empower clients to feel good and make hearing easy. In Comparably’s research, an incredible 98 percent of employees felt proud to be a part of the company. And 87 percent felt aligned to company goals. Any of the big corporates would be delighted to achieve results like these.

Developing, and perhaps more importantly, maintaining a strong company culture can be challenging. As the workforce increases and operating environments change, so too does company culture. We only have to look at how things changed so drastically in 2020 for confirmation.

So, what tools are available to support company culture? Well, intranet software is a great place to start. Let’s find out why.

how to develop company vision

Company Culture Is A Challenge: How Intranet Software Can Promote Company Culture

We know that every time you add employees to your SMB, it gets harder to standardize the company culture. And reinforce employee adherence to everyday business practices. Adding more personnel means less time to focus on individualized training and relying more heavily on veteran employees to teach the tenets of the culture. While new hires want to fit in, they will also have different responses to your senior workers’ indoctrination efforts.

healthcare-intranet-softwareThe success of any effort to standardize how your employees perform their everyday tasks is communication. For example, in a small healthcare agency, this might look like how managers and employees talk to each other and interact with the patients. They will need to use values such as respect, tolerance, and cultural sensitivity. Where do you discuss these tenets of basic communication that are essential to every healthcare organization? One place is new employee orientation, and another is within specific employee training modules. These are easy to create and store in web pages, videos, or written documents on the company intranet.

Beyond Intranet Business Process Workflow

When you’re considering how to standardize best your cultural values and practices, you’ve probably given much thought to investing in better automation tools. Much has been written in the small business world about the importance of automation. There’s a software solution for just about every business need. Where one does not exist, you can hire a software developer to make one for the company. Remember that managing the stages of growth in an SMB calls for creating a strategy and implementing it with fidelity throughout the organization. As a member of the senior management team, don’t let the company grow too fast. Don’t allow the team to skip essential steps in building employee support for cultural values and practices. Here, we look beyond the benefits of automation to considering whether your intranet is designed to keep employees informed of all expectations, whether for interacting with clients or completing expense reports. You can use the intranet to strengthen the culture through these critical stages of growth.

Your Intranet As The Hub Of Company Cultural Values

employee-internal-communicationRecently, Forbes.com contributor Denise Lee Yohn described some things that growing companies want to avoid. Here are examples of stages that she notes: “Whether opening new units, introducing a new product, executing an acquisition, or expanding the brand footprint, companies often experience growing pains.” Consider her example of the local café. When your company introduces new locations, the customers at the original site might not like how you changed things, especially to benefit the staff at the latest locations. From where you’re sitting, the ways things were done at the first café might have been “slow, quirky, and somewhat inconsistent,” writes Yohn, but that’s what your customers came to expect. They don’t like change. This is the same experience you’d expect from veteran employees. One of Yohn’s recommendations is to explain upcoming changes to customers and ensure that employees know how to communicate them well.

Using The Basic Features Of Your Intranet Software

Let’s look at how that might look when you’re using a template-based content management system as the backbone for the company intranet. Every type of content that employees must access will exist on a server. Pieces of content will only be helpful if employees know where to find them and use them. The company intranet is where you post information such as changes to business procedures to be implemented in all business locations. It’s where you post videos explaining new policies and procedures, give examples, and provide additional training materials that employees might need. Your intranet is also where you can create a discussion board where employees can ask questions and get answers about new procedures from management. In a MyHub intranet, you can use employee profiles to restrict access to these types of internal materials to employees with a predefined user role.

Focus On Employee Engagement

What we love about building a company intranet are the endless possibilities. Any content that you post for internal use has the potential to inspire workers. One study used as part of its framework the idea that a sense of purpose motivates employees. Lindsay McGregor and Neel Doshi defined the purpose as “when the direct outcome of the work fits your identity.” They give the example of the teacher who works to educate and empower children. You want employees to feel that their work reinforces their identity as a member of your company.

Leveraging Your Intranet’s Potential For HR

intranet-videoWhat if you used every effort at communicating with employees as an attempt to increase their motivation. Post information on your intranet that will inform employees so they know why things are done a certain way. Help them understand how that information affects their role within the organization. Encourage them to get the support they need from HR staff, trainers, and their supervisors so they can implement changes with fidelity. Alleviate any concerns they may have that changes will affect their performance. Give employees multiple opportunities to interact with intranet content to increase their sense of identity and purpose within the organization. They will consistently work harder on the company’s behalf if they have a strong identity and feel that their work is meaningful.

Customer Extranets

A good intranet also helps your organization inform customers about any changes to internal practices that will impact them. It’s easy to use your MyHub intranet solution to create registered users, which could include your customers using an extranet-style approach. You can create user accounts and roles for customers who fit a specific list of criteria or one account for every customer. It all depends on your business needs. Some companies use a section of their intranet as a place for employees to receive customer feedback. Using an intranet template, you could create a customer feedback form and then assign a manager to post examples to recognize employees throughout the organization. The same system could also be used to forward feedback to managers of operational areas to correct specific problems with employee performance.

Employee Intranet

Your ability to motivate employees and keep them working towards the company’s strategic goals is challenging, especially during rapid growth and change. You want one place where all employees can access relevant information. With an intranet, use your site’s security features to protect internal content and limit access to employees with specific user privileges. It’s easy to set the length of time that any page within the intranet will appear. For example, you might create a page for employee benefits open enrollment and schedule it to disappear a week after the period closes. There are so many possibilities for increasing communication and standardizing the values and practices in your company culture. The intranet is a central place to communicate vital information and manage change. Your employees need every advantage they can get to adapt to change and succeed in their roles.

Sign up for a free demo or 14-day no-obligation trial and explore how an intranet can build a strong company culture in your business.

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