Why Is Company Culture Important?

Great leaders seek ways to set their organizations apart in today’s competitive markets. While there are many ways to do this — like marketing campaigns and innovative technology — a strong company culture has long been a key differentiator. Yet, positive culture can be difficult to measure and even more challenging to achieve. This may cause you to wonder: Why is company culture important?

To answer this question, we’ll explore the elements that contribute to company culture. We’ll also describe the benefits of company culture for employees and employers, illustrating how benefits for employees translate to wins for the organization as a whole.

What Is Company Culture?

Before explaining why company culture is important, it’s essential to grasp what it really is. Company culture refers to the values, beliefs, and practices that define the way people work together in an organization.

An organization’s culture is its identity, which impacts the work environment, employee interactions, business operations, and more. There are a number of key elements that contribute to culture:

• Organizational mission — Provide a shared purpose and goals, which contribute to employee engagement and motivation.
• Cultural competence — Appreciate and navigate differences in backgrounds, customs, and culture, leading to improved collaboration and inclusivity.
• Employee recognition — Acknowledge the contributions and achievements of employees to create a positive work environment and increase motivation.
• Compensation and benefits — Offer compensation that reflects your values, attracts top talent, and builds loyalty.
• Leadership styles — Build a strong management team focused on character, awareness, approachability, and mentorship.
• Work-life balance — Enable employees to focus on their personal life and commitments in addition to their work responsibilities.
• Commitment to ethics — Encourage organizational integrity demonstrating reflection, humility, and charity from the top down.

While a company’s culture is certainly shaped by its executives and leadership, it can also be influenced by the behaviors and attitudes of individual staff members. This means that teams within a company can develop their own variations of the overall culture.

If you’re wondering how to improve company culture within your organization, start by assessing how your organization, departments, and teams measure up in the elements of culture mentioned above. Then, make necessary improvements in the areas that may be lacking. Investing in a positive culture is a worthwhile endeavor because it benefits all involved with your organization.

Why Is Company Culture Important to Employees?

As you learn about company culture, it’s important to consider how it will specifically assist the people who keep your organization running: your employees. A strong company culture will not just appeal to prospective employees, but will also support them once they’ve arrived. Below, you’ll find benefits of a strong company culture from an employee’s perspective.

• Support: Employees need to know that they’ll receive the assistance, tools, and training to be successful in their roles. An organization with a strong culture can provide support through onboarding and job training, effective leadership teams, and adequate compensation packages.
• Belonging: A thriving company culture allows employees to belong to something bigger than themselves. When an employee feels like an integral part of a community, they’re more likely to stand behind the company’s mission and engage enthusiastically.
• Respect: It’s important for employees to work in a respectful environment. A culture that allows employee voices to be heard, values the importance of work-life balance, and acknowledges contributions is key for employees.
• Integrity: For employees to buy into an organization’s mission, there needs to be a level of trust with leadership. If ethical issues are not addressed, leaders are hypocritical in their actions, or managers criticize excessively, it will be difficult for employees to stay.
• Growth: Ample professional development opportunities mean a lot to employees who desire to grow throughout their careers. Stagnation can negatively impact an employee’s perception of their company culture.

Why Is Company Culture Important to Employers?

In addition to the numerous benefits enjoyed by employees, a healthy company culture also aids the organization itself. Here are a few benefits that employers can experience as they invest in employee wellness.

• Recruiting: A positive culture can help you bring in top talent. Your company’s recruiters can describe the many benefits associated with being a part of your team and indicators of a strong culture — like those we mentioned previously — that your organization demonstrates.
• Productivity: When employees feel like a valued part of a team, they’re more engaged in their work and more productive. This will end up improving your organization’s results and performance.
• Retention:Company culture statistics show that organizational culture and leadership are positively correlated with job satisfaction among staff. Employees who are satisfied with their work environment are more likely to stay with the company for the long term, reducing turnover and keeping positions filled.
• Innovation: A company culture that values diversity and recognizes individuals’ contributions will encourage creativity. Employees will feel that they can share their ideas and come up with innovative solutions to problems, which can give your company a competitive edge.
• Reputation: News about your company culture will spread. Providing a great place to work can attract new clients, employees, and investors as you build a positive reputation.

Consider concrete ways to build a strong company culture as you develop improvement plans, such as inclusive policies, servant leadership models, in-house professional development programs, commitments to safety, and accessible leadership.

Each organization is different, so the strategies you choose to build a strong culture will vary. It’s important to research a variety of methods to improve your culture to find ones that will work in your specific situation.

Great Leaders Are Great Learners

Why is company culture important? As we’ve explored this question, we’ve highlighted the need for quality leadership. To be a great leader, it’s essential to stay up-to-date on industry news. The IntelyCare newsletter delivers free healthcare insights directly to your inbox.