Importance of Work Culture: why is it important and what is its role?
Strong company culture is becoming an integral factor in the success of any company, and it’s having a big impact on the business outcome too. According to recent research, organizations with a distinctive culture are more likely see a 48% increase in revenue, an 80% increase in employee satisfaction and an 89% increase in customer satisfaction. Many job seekers also mention strong company culture as a decisive factor when it comes to agreeing to or declining a job. But what exactly is company culture, what are its benefits and how do you go about “making your own”?
Workplace culture consists of three key factors: company values, the people that work for the company and the company’s communication. Essentially, the company culture aims at forming a “community”, which thrives on the participation of everyone involved. The important thing to remember is that company culture is not built in a day – it’s a process that involves a lot of thought, and the best practice is to constantly reevaluate it. Before you get scared and lose interest – here are the benefits of strong company culture.
Firstly, increased employee retention. Companies with a strong culture that ensure the well-being of their employees seem to retain their staff in greater numbers. A general rule of thumb is: Are employees happy? If they are, they won’t want to leave and it improves their efficiency. That leads to the second benefit – increased efficiency and teamwork. Companies with strong work culture see that their employees are more involved and enthusiastic about their work, which improves communication and increases team efforts. Thirdly, better company image. The stronger the culture and the happier the employees, the better they will speak about their workplace and recommend it.
So what exactly constitutes a strong company culture? Here at Storm4, we prepared an overview of the four factors of startup culture, what the key components of a strong company culture are and possible recommendations from our side on how to build one.
Four factors of Startup Culture
There are four distinctive factors when it comes to the so-called “Start-Up Culture”. These can be split into passion, personality, agility, and authenticity.
Passion refers to the drive behind the company. What is the mission? What does the startup want to achieve? The passion behind the company is what makes it feel less like work, and why the long hours spent on developing the products feel worthwhile. Passion gives strength not only to the founder, but also to the employees because it mobilizes them, motivates them and also encourages them to push through challenging tasks. It also becomes crucial when it comes to attracting investors, who are more willing to invest in a startup when they see how passionate people are about what they do.
Personality is another crucial factor in a startup. It refers to the values and tone of voice of the startup. What do we believe in? How do we present ourselves? But also: who do we want to join us on our mission? Who is the audience?
Personality helps to shape the brand. It defines the characteristics of the brand as if it was a person, and in result, helps people to feel connected to it. These characteristics are what make the brand unique and it sets it apart from its competitors.
Agility refers to the flexibility and adaptability of a brand. Startups need to stay agile in order to survive: the more knowledge and information that flows, the more certain aspects of the business improves. Agility requires brands to be led in a new way, constantly adapting to the market while staying true to their own principles, values, and vision.
Last but not least, authenticity. After defining the core values and the mission of the startup, the work doesn’t stop there. The company needs to constantly deliver on those “promises” in order to stay authentic and take action that stays true to their core. Customers constantly observe and listen, so it is important that the company stays faithful to what it says it does.
What are the key components of Strong Company Culture?
So, what constitutes a strong company culture? It’s important to understand that a work environment and company culture are NOT synonymous. Simply adding a ping-pong table or a bowl of fruit will not cut the deal, as even though it will improve something, it will improve only the environment in which the employees find themselves every day. What are the key components then? These can be separated into a few different sections: leadership, communication, listening, commitment, hiring practices and employee recognition.
Strong leadership is key when it comes to company culture. Leaders that set an example and empower their employees are an important component of a company’s success. Culture starts at the top, so the leaders need to set the tone and shape it to give the employees something to believe in. Once the employees believe, they will take more ownership and become invested in the company. If the leadership does not define the culture and is not invested in themselves, the whole ordeal will become hollow and meaningless, and in turn, the employees won’t believe in any possible success.
Clear, well-defined, and transparent communication is vital to building a culture where people can trust each other. It is very important to be open to communication and upfront about many strategic things within the company, as well as provide an explanation for any action the company takes regardless of what the action actually is. When the employees feel like they can trust the company, the company will be able to trust the employees in return and they will do their best to deliver. It’s crucial for the leadership to openly communicate the core values and mission to the employees, so everyone is on the same page and they can all work together to achieve their goals.
Following on from communication, listening is another key component of a strong work culture. The employees don’t only need transparency, but they need to feel that they’re being listened to and that their opinions and concerns matter. Employee feedback can be crucial to progress, as even small changes can have a huge impact on the involvement of the employees. Making sure that the employees feel listened to also improves the trust, as well as transparent communication.
Once the company’s mission and core values are established, it is important to commit to them, instead of flaking out at the first possible instance. The more committed the employees and the leadership are, the better the results for both efficiency and the business side of things. Once the company achieves their first set of goals – set more. When everyone feels involved in it, there is room for greater achievements.
Leaning in from transparent communication, it is important to be upfront with the potential candidates from the get-go. Instead of fixating on certain skills and being very rigid about it, it’s important to look at talent from the perspective of if they’re a good fit for the company culture, and what types of values (aligning with the company ones) the future employees have. Hiring for culture and values is important to sustain the company culture already established, and it can help in the future with its evaluation.
Tied to basically all the previous points, is employee recognition. Once the employees feel listened to and recognized for their efforts, it is way easier for the company not only to retain staff but to build a culture based on teamwork. That will lead to increased efficiency at work and a strong team spirit.
After outlining all the key factors that constitute a strong company culture, here are some possible recommendations on how to achieve one.
Take time to define your values
Don’t rush it. Make sure to dedicate time to spend on defining the core of your company, its mission, and its goals. No strong company culture was built in one day, so don’t be scared to spend time on it with full focus to make sure it’s all well-defined and transparent. That will help in clearly communicating it later not only to the leadership but all the employees.
Practice what you preach
Once the culture is defined, make sure it is not empty promises, but things are being done in order to deliver what was outlined.
Be inclusive from the get-go
Make sure your employees are involved in the culture, and that everyone in the team is heard. Additionally, companies with a strong sense of diversity, equality and inclusivity tend to perform better than teams where the workforce is not as diverse and inclusive.
Regularly reevaluate your culture
Make sure to go over the core values, mission, and goals on a regular basis. This will help to figure out what works and what does not, which things need to be improved and what things need to be scrapped altogether. Utilize employee feedback to evaluate and improve your company’s culture.