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What Is Company Culture (And Why Is It Important)?

Company culture is a hot topic in the corporate world.

You could spend months comparing great culture-building techniques, studying culture surveys, and reading opinion pieces on culture like the Netflix Culture Deck or BambooHR CEO Ben Peterson’s take on the future of HR.

What is Company Culture?

Company culture is the summation of how people within an organization interact with each other and work together.

Societally speaking, culture is the collective knowledge and achievements of a group, expressed by things like customs of behavior, art, music, food, religion, and language. Culture creates the foundation for the values and beliefs of a society, and company culture is similar. It is a shared set of beliefs, values, attitudes, standards, purposes, and behaviors.

The culture of an organization is like a set of miniature societies within a larger society, and their cultures are expressions of the work they perform, the values they adopt, and the collective behaviors of the people who work for them.

To see how company culture forms, let’s look at two hypothetical examples: first, a multinational software firm employing thousands of people, and second, a small-town nursery with just a few employees.

The Types of Company Culture – Two Businesses Examples

The first company culture example, the multinational software firm, has employees around the world in a dozen countries. Among them, it might have thousands of differing beliefs and behaviors swirling around in its massive employee base. But in spite of their geographical separation, they’re all working in the same industry, ostensibly for the same purpose, and it’s likely a company of that size has expressed some set of values to all the employees even if they don’t necessarily feel personally bound by them.

At the other end of the spectrum, the small-town nursery with only five or ten employees has an industry (horticulture), a relatively clear business objective (garden domination!), and a set of values the employees understand, even if nobody has sent out a memo or held a video conference to make them clear. At both companies, the employees realize their common objective and they likely behave in whatever way their employer has shown is desirable in pursuit of its ultimate goal: selling more software or selling more plants.

Weak vs. Strong Company Culture

What makes company culture particularly interesting, however, is that it is not a singular concept. Company culture is really a combination of two ideas: the expressed or stated culture that an organization broadcasts publicly, and its actual culture—the way the people in the organization really act and how they treat each other. In some cases, these two ideas align with each other, and you have what could be called a strong culture: leaders and employees who understand and espouse the company’s stated values because they’re reinforced internally by deliberate training and decision-making at every level.

In an organization with weak culture, however, there is a disconnect between the stated and actual cultures, either due to a lack of stated culture altogether, or because the stated culture isn’t understood, supported, or perpetuated by the employees or the people responsible for maintaining culture. Weak cultures are often an afterthought, where employers recognize the need for a stated culture after neglecting their employee experience. But instead of putting in the effort to support real culture changes, they draft a mission statement, put it on a poster, and hope that enough promotion will convince their employees and the public at large.

Communication is Critical

Size isn’t necessarily a factor, either. In the examples given above, the software company could have a great company culture, with core values set in stone from day one, reinforced with the opening of every new location, supported in company-wide communications and marketing campaigns, and maintained by a watchful human resources department. Meanwhile, the nursery could have signs about peace, coexistence, and love for all humanity posted in every corner, but a vindictive, abusive owner who treats his employees like cattle, fires good people out of spite, pours pesticides into the river, and promotes an incompetent drinking buddy to be his second-in-command.  

To help communicate your culture as a company, start by defining your mission, vision, and values.

Why Company Culture Matters

As for why company culture is important, first ask yourself: Which company would you rather work for, the multinational corporation that cares about its employees, or the nursery that treats its employees terribly? And which company do you think has the best chances for long-term success?

I’d guess most of us—our love for plants and shrubs notwithstanding—would rather work for the huge software company, in large part because of its good company culture. Employees are likely happier there, less stressed about keeping their jobs, more optimistic about advancing for the right reasons, and probably more collaborative and engaged in their work because of those feelings. That means there’s also a better chance that the software company will be around in ten years, not burned to the ground by an otherwise pacifistic former employee driven to vengeance. Company culture is important because it is the very foundation of every organization; strong culture is an acknowledgment that people are the most critical asset a company holds and that protecting its people is the surest way to continued success.  

The Alignment Issue – Stated Culture & Actual Culture

Finding alignment between stated culture and actual culture can be one of the most challenging tasks for any organization, but it doesn’t have to be. One thing that can make alignment particularly difficult is when the stated culture arrives after the actual culture has evolved on its own. Company culture will always develop, with or without official guidance, and it takes a lot of effort to alter the direction of an existing culture when it’s been bolstered by years of tradition and multiple generations of hiring. Knowing this, thoughtful organizations will make culture a priority from the start, rather than try to shoehorn it in down the road. Those who are late to the game should understand that it takes more than cobbling together some ideals and making posters; it takes understanding the existing culture and reinforcing the positive aspects of that, bit by bit, until there’s enough of a foothold to justify making any significant changes.

Another major issue occurs when initiatives to create a great company culture come from an image-first motivation, rather than a genuine desire to create an actual positive culture within the organization. Culture campaigns like this can actually have a negative effect when an otherwise-aligned employee population is rudely awakened to the hypocrisy between what the company says and what it actually does. Thus, it’s always best to approach culture realistically, openly acknowledging the true motivations and desired outcomes employees likely already understand and proposing any planned improvements internally long before stating them publicly.

If corporate culture is built up over time, employees are the bedrock beneath it. So, if there’s any question as to whether you have the trust and support of the people in your organization, you’re better off addressing that before you lay the first brick in any cultural initiative.    

However you define your vision of building the best company culture for you, make sure your employees have opportunities to grow professionally and personally. Ask the right questions and listen to your employees’ unique perspectives; they probably already have a good idea of where your workplace culture currently is, and they can help guide your culture in a powerful way for years to come.

BambooHR is the #1 HR software for small and medium-sized businesses. We set you free from spreadsheets so you can do great work.

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