Is company culture really all that important? Let’s take a look at the evidence-based research. (Hint: it is!)

In the last few posts, I’ve discussed the importance of accountability to improve company culture. But why should we care about improving company culture in the first place?

We hear all the time that company culture can increase productivity and employee retention, but is that really true? I’ve been reading Adam Grant’s book Think Again and he warns against making assumptions without testing them against reality – sometimes we have to think again. I thought, okay, let me think again about company culture and ask some key questions.


Company Culture: What the Research Shows

Is there really a link between company culture and company success?

I wanted to find out if the research actually backs up the claims about the importance of company culture. In particular, I wanted to look at the research since 2020. Is there evidence in published studies showing us that company culture is linked to company success?

You’ll be pleased to know that the research does confirm that a positive company culture is linked to a greater chance of a business being successful. But let’s get a little more granular. 


What aspects of company culture are linked to success?

Next I wondered if there is any guidance on the components of a company culture that are important to focus on. 

Temiloluwa Olakunle’s 2021 article ‘The Impact of Organisational Culture on Employee Productivity’ showed that organisations with better employee engagement and dedication paid attention to creating a positive atmosphere. In particular, these organisations placed a high value on teamwork, communication and employee empowerment. That’s fascinating, given our focus on accountability, as accountability is based on those three things. 

these organisations placed a high value on teamwork, communication and employee empowerment’

Another study from 2020 looked at the Organizational Culture at Starbucks. This is a company that’s been around for almost 50 years, so it’s not a bad company to look at in terms of success and staying power. The researchers found that Starbucks’ culture plays a crucial role in building its strong brand, and that the key to its success was shared values.


What are the most important ingredients in a great company culture?

If we just distil the advice in these studies, and there are plenty more out there, it suggests that the most important ingredients in a great company culture are:

  • teamwork
  • communication
  • employee empowerment
  • shared values 


Are businesses investing in company culture?

After reading all this evidence, I was excited. There is clear research linking specific elements of company culture to productivity, engagement and business success

I wondered, however, if companies are establishing these elements in the workplace? I found a study by Zippia that reported over 50% of employees rank a good workplace culture as more important than salary. But interestingly less than a third of executives understand their company culture. 

less than a third of executives understand their company culture.’

Zippia’s research found:

  • 92% of CEOs say they understand their company culture
  • 50% of employees say their CEOs understand company culture. 

A very large gap in there! Something is going wrong in this disconnect. So another key takeaway is that even though managers may think they understand the culture, there’s actually a huge gap in how employees feel about it

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Four Steps to Evaluate Your Company Culture

Culture can be difficult to wrap your head around because it is intangible – it’s more like a concept, or a feeling. At Amplify HR, we make the creation of a culture that engages and inspires tangible by using our methodology, Find Grow Keep, which is also the name of our podcast

Culture doesn’t stand still. Great cultures can turn to dysfunction before you know it, if you aren’t intentional about it. Even if you have what you think right now is a fantastic culture, and maybe you’re starting to question that based on those statistics I just gave you, I invite you to take four steps to check. 

‘Even if you have a fantastic culture, I invite you to take four steps to check.’ 


1. Describe Your Culture

Sit down, have some quiet time, and write down words that describe your culture. Here are some prompts:

  • How do you describe your culture to people when you meet them for the first time, that classic ‘barbecue conversation’? 
  • How do you describe it to job applicants who are coming in to interview? 
  • How do you describe it in the quiet moments in your mind when you’re not trying to sell the business to somebody? 
  • How do you actually describe it when you’re being really honest about it? 

Even in great cultures there are still going to be some little fringe words that perhaps aren’t so positive. Write down all those words too. 


2.  Ask Your Team to Describe Your Culture

Next, talk to your team members and ask them to do the same exercise. How you approach this will depend on the size of your organisation. You may choose to ask just your management team to do this if you’re a bigger company. But I would encourage you, based on that Zippia research, to ask some employees as well.

You can use technology to help if you’re a larger company, via an online survey. If you’re a smaller company, this should be very easy in a team meeting. Just ask everyone to write down:

  • What words would you use to describe our company culture?
  • When people ask what it’s like working here, what do you say? 


3. What Are the Differences? 

Now compare the two lists describing your company culture

  • What’s the same? 
  • What’s different? 
  • Is there anything that surprises you? 
  • Is there anything there that you suspected but didn’t want to admit?
  • Are there positive things that you didn’t realise? 


4. Make a Plan

Finally, take all that information and sit down with your lead team to think about what you need to do as a company over the next 12 months.

  • What kind of culture do you want to have in 12 months? 
  • How do you want to describe your culture in 12 months? 
  • Will your words be the same in 12 months? 
  • Is there a different set of words or some new words? 
  • Are you going to be taking some words out and adding some others in? 
  • What do you need your culture to look like? 

This will enable you to clarify where you are now, where you’d like to be, and the gap between these positions.

Reflect

Now you can reflect on the research about the elements of a positive culture and add some actions to your plan.

Teamwork 

  • How do you encourage teamwork? 
  • How do you encourage cross-functional collaboration? 
  • Do you have cross-functional projects? 

Communication

  • Do you have a communication strategy? 
  • Do you have a communication plan? 

Employee empowerment 

  • Have a look at the last post around accountability and culture. Are you taking action in this area?
  • Accountability in your culture will empower employees to make decisions and achieve their goals. Have you embedded accountability in your business?

Shared values

  • How well has your business embedded your values? 
  • How do you know? 
  • Do you talk about them? 
  • Do you make decisions based on your values? 
  • Can you even name your values? 


Review Your Processes

All this information provides the basis for either reviewing or building new HR or People & Culture processes, like:

  • Recruitment
  • Onboarding
  • Team meetings
  • Goal setting
  • Performance discussions
  • Rewards
  • Benefits
  • Recognition
  • Leadership
  • Team development
  • Communication

There’s lots in there, but as they say, you eat the elephant one bite at a time. Look at the gap between your culture today and where you want it to be in 12 months, and decide how well you think each of the activities in this list are supporting your culture. This will suggest an action plan to focus on the things that will help you to build a positive culture, intentionally.


Help is at Hand

If you’re thinking, ‘I don’t know how we’re going to do that’, or ‘we don’t have the resources or the time’, or’ we don’t have dedicated HR’, or ‘we do have dedicated HR, but they’re too busy’ or ‘I don’t know how we’re going to get that done’, then head on over to our website and you’ll find more information about us, and how we can help you create a workplace that engages and inspires.

What I’ve described here is exactly the process that we can take your business through. If you can do it yourself, fantastic! I would love for you to reach out and let me know what your action plan looks like. I’m always fascinated with how different businesses take the information that I provide in our podcasts and blogs and use it to create a great workplace that engages and inspires. 

Whether you develop a plan independently, or seek external guidance, investing in a vibrant company culture yields invaluable results.

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