Company culture has become an increasingly important aspect of building a great company, attracting and retaining good people, and enjoying a successful career.
In the past, business or corporate “culture” was equated with dress codes or typical managerial and employee behavior, like aggressively climbing the organizational ladder or taking a cutthroat approach to competition.
But company culture is far more than surface-level aesthetics or behavioral tendencies in an organization. Just as human cultures in the real world are living, breathing manifestations of shared visions, values, and practices, a company culture embodies those same elements and more.
The Remarkable Impact of Company Culture
The quality of a company culture can make or break a business. As longtime Harvard Business School professor James L. Keskett outlined in his book, The Culture Cycle, companies with an effective culture can achieve a 20 to 30 percent greater differential in company performance compared to “culturally unremarkable” competitors.
Failing to cultivate an effective culture can be incredibly costly, not just from the standpoint of differentiation but more so when it comes to bottom-line profitability. In collecting data on the impact of culture, Heskett has found that as much as half of the difference in operating profit between organizations can be attributed to effective cultures.
Ultimately, according to Heskett, effective culture produces vastly better business results through greater retention of managers and employees; lower wage costs for talent; lower costs for recruiting, hiring, and training; and higher productivity.”
Looking at the Forbes list top ranked companies for culture and values, the end results seem readily apparent. The list of companies with the best cultures is a ‘who’s who’ of giants in innovation and success: Google, Apple, Southwest Airlines, Twitter, Facebook, CDW, Nike, Intuit, The Walt Disney Company, and Proctor & Gamble to name a few.
These companies didn’t achieve their success by accident. They’ve established values and have cultivated practices that enable greatness, and they’ve been able to attract elite employees who want to be part of an organization that appreciates them and invites them to share in a vision that extends beyond the worn-out clichés and bottom-line obsessions of typical corporate culture.
How Can Companies Cultivate an Effective Culture?
John Coleman, author of Passion & Purpose: Stories from the Best and Brightest Young Business Leaders, has outlined six components of a great company culture.
The first is having a vision, which guides your company’s values and provides its overarching purpose. This orients a company and its employees in everything that they do.
The second component is the values that comprise the core of your company culture. These should be clearly articulated and should serve as guideposts for your company’s activity.
Next comes practices, which are the way that a company’s vision and values are carried out every day. A company must put its vision and values into practice consistently and authentically. For example, if a company professes that “people are our greatest asset”, then it must invest in them in visible ways and treat them with dignity and respect.
A company must also have the right people who share its values, embrace them, and can put them into practice. This is where recruiting becomes vitally important, not just from the standpoint of ensuring that recruits are a good fit for the company, but in embracing company values in the recruiting process so that prospective employees can evaluate company culture and ensure that it aligns with their personal vision and values.
Coleman’s fifth component of a great company culture is narrative. Stories can be a powerful way to communicate and reinforce culture by conveying a company’s unique history and by capturing its vision and values in an inspiring narrative. Weaving and crafting that narrative can be an essential part of a company’s culture and brand.
Finally, Coleman points to ‘place’ as the sixth component of a great company culture. By this he means the physical space in which people interact and collaborate. The geography, architecture, and aesthetic design of a workplace can dramatically shape and encourage culture, so you should take care in choosing and designing the sort of workplace that embodies your company vision, values, and practices. Even if your company works virtually, the mechanisms and structures that you use to communicate and collaborate can similarly be a major contributor to culture.
Start Building or Improving Company Culture Right Now
While there are many potential building blocks of an effective company culture, it all starts with outlining a vision, establishing values, and then taking the necessary actions to start putting culture into practice. Our personal planning and CRM solutions for businesses provide an ideal way to begin this process by defining a clear vision, setting goals, and then planning and executing the activities needed to establish your company culture and take the first steps toward being a truly great company. Visit PlanPlus Online for more details.