Why Organizational Culture Matters (and 6 Success Factors to Make It Work)
A growing body of research suggests that having just a few disengaged employees can sow the seeds of negative culture and negatively impact the performance of a whole organization. Disengaged employees are less likely to work hard, feel motivated or meet expectations for their role, and it’s been reported they can cause 60% more work errors. Disengagement can cost companies between $450 and $550 billion a year in lost revenue and employee turnover.
During times of stress, when companies as a whole suffer, internal culture hits a standstill. People question their role in the company (even their whole livelihoods), so it can be difficult for them to focus on the work they do for your clients.
The cost of a bad reputation for a company with 10,000 employees could be as much as $7.6 million in additional wages (based on the average U.S. salary of $47,230 and assuming annual turnover of 16.4% with a minimum 10% pay raise).
In a nutshell, the external reputation of your organization is tied to the passion people have for your company on the inside.
But what’s the real, tangible benefit of investing in organizational culture?
Why an Aligned Organizational Culture Is a Must-Have
To achieve the desired culture, everyone from your executives to leaders to employees must have a clear, consistent, common understanding of it—and everyone must work together in a deliberate and coordinated effort to cultivate it. While each person or group is accountable in their own way, everyone shares accountability for achieving the desired culture.
GitLab, an open-source DevOps platform, is a great example of being steadfastly transparent, providing a public team handbook that puts everything (from process to workflow to organizational chart to values) out in the open. Even employee onboarding is completely transparent.
“By keeping things transparent and by continually reinforcing the fact that everyone can contribute, I think you get a lot better results as a company,” said Lyle Kozloff, GitLab Senior Support Engineering Manager. “People do want to care about the work that they do, and they care about how the company presents itself. Letting employees then do something with those feelings to make the company better, I've never seen a company quite able to do that like GitLab.”
People feel good about doing business with companies that treat their people well. And employees who are treated well do good work.
No matter the industry, companies need an intentional organizational culture to remain profitable, and many leaders are ten steps ahead in this regard.
Southwest Airlines, number 14 on Fortune’s “Most Admired Companies” list, created an intentional “employee-first” organizational culture.
Their mantra: “We believe that if we treat our employees right, they will treat our customers right, and in turn that results in increased business and profits that make everyone happy.”
And the profitability that results from organizational culture isn’t inconsequential. Research by Oxford University's Saïd Business School, in collaboration with British multinational telecoms firm BT, has found a conclusive link between happiness and productivity, and workers are 13% more productive when happy.
These examples, among many others, prove the need for an intentional organizational culture. But how is that done?
Vitamins vs. Painkillers
Good organizational culture keeps employees happy and the bottom line prosperous. But is it something intentional?
In short: Yes, it’s very intentional. And companies of all sizes, in all situations, need to approach it as such.
Put it this way: people take vitamins for different reasons than they take painkillers. Vitamins are used to ward off problems, sustain energy and build up immunity. Painkillers are used after the fact to numb a serious problem.
Whether the severity of your cultural issues are relatively minor (grumbling in the break room) or extremely detrimental (hemorrhaging employees as fast as you can onboard new ones), the same tactics apply, albeit to different degrees.
To make your organizational culture stick, put these success factors to use:
1. Focus Groups & Surveys
It’s time for a change to the corporate culture. But how, specifically? Take a close look at what your employees have to say and what would benefit them through two crucial engagement strategies: surveys and focus groups.
Start with an anonymous, company-wide survey to get a reading of what could be improved with your culture, and what could stay the same. Ask a mix of qualitative and quantitative questions and set benchmarks for measurable growth later on.
Once survey results are in, implement focus groups of 12–15 employees of various ages, demographics, seniorities and tenures, and choose a moderator to host an open conversation and collect responses.
Related: Worried your employees have survey fatigue? Learn why that’s unlikely and how we’re debunking five common perceived employee engagement survey roadblocks.
2. An Engaging Brand
Marketing expert Seth Godin defines a brand as “the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.”
That definition may summarize the decision for us to choose, say, Starbucks over Caribou Coffee. But the purpose of bringing your culture to life through a brand image goes a bit deeper: it gets your people to choose you and your message over another employer’s. As Harvard Business Review states, “The company isn’t recognized just as a great place to work; the work itself becomes great. And the company doesn’t establish itself just as a great employer; it lays the foundation for great customer relationships.
A separate, parallel brand to your consumer brand should be created to unify your organizational culture and to give your people a theme or concept to rally behind for every touchpoint, big and small, along the way.
3. A Powerful Launch
If a cultural brand (or re-brand) is developed, and no one knows about it, does it really happen? Not really.
As a rule of thumb, the size and extent of your company’s cultural change should dictate the size and extent of your launch. Regardless, introducing people to your cultural brand—and what that means for their shared behaviors and norms—will definitely take more than an email announcement.
No matter the size and scope of your cultural change, make sure your launch is experiential. In addition to using a cross-media approach to communicating to your people, consider amplifying its impact with an event, contest or other engaging tactic that people experience—more than just read or hear about—to get your people wrapped up in your message.
Keep your culture’s brand front and center by purposefully incorporating it into all your team communication channels, such as company intranet, monitor screens and more. If communications aren’t spread across multiple channels, you’re missing a notable opportunity to fully engage with all generations. A mixed print and digital approach is the only way to go. The more touchpoints people have with your message at its inception, the stronger the rollout will be.
Related: During the pandemic, ITA Group used employee surveys to adjust existing policies and create new programs to better reflect our culture, give our people what they need to successfully serve our clients and drive better business results while attracting top talent to the ITA Group team. Learn more.
4. Continual Consistency & Communications
After your launch, it’s time to keep your culture top-of-mind at all times.
Organizations may be investing significant time and money in creating a culture but may not be reaping the commensurate rewards—especially if executives, leaders and employees have differing perceptions of the company's culture. Employers must therefore ensure that the organization clearly and consistently communicates its culture to all employees.
But long-term change takes more than just great communication pieces. Ensure your leaders are clear on expected behaviors and ready to help translate how their team members individually contribute to your cultural goals. Having supporters to champion the change at the local level is critical because when individuals see their peers buying in to change, they’re more apt to do so as well.
5. Engaging Tech
In years past, we chatted around the watercooler to learn what was going on in the workplace. Today, it’s a little different.
As many organizations embrace the “anywhere-work” model, it will be more important to strategically leverage technology to convey key messages than ever before. Social media and instant messaging communication methods are common, so why not meet your people where they are already?
With a central communication hub to convey key culture-boosting messages to your people, you can share the latest events and news, all wrapped up in your brand.
But don’t stop there. Tie in elements of recognition to reinforce your culture. When managers and employees can reward and congratulate each other online for demonstrating key behaviors and achieving goals that align with your culture, you reinforce the desired culture you’re looking to create in meaningful ways.
In a recent blog post about employee experience trends, ITA Group Product Manager Chris Grunwald note, “As technology grows in importance, companies need to be in-tune with the needs of their employees to ensure it offers the value necessary to them to encourage their use.”
6. Company Culture Ambassadors
One Fast Company article puts the importance of “culture ambassadors” concisely:
“(Your) first customer isn’t external, they are internal. So, it's imperative to help them become a brand themselves, or a ‘brand inside a brand’…so they can have more impact for the company and for themselves.”
In other words, your culture needs to be embodied by people who love, live, breathe and champion it. There is a shared responsibility (once the desired culture is defined) for maintaining culture throughout an organization. Introducing culture ambassadors can help build that momentum.
It’s powerful when employees see leaders of all levels truly living up to the cultural brand you create. But when your employees see peers support the brand, they’ll experience the community in a more personal way.
That’s why local level ambassadors for your culture are key. Think of them as cheerleaders who champion your cause while also sounding the alarm bell if something is going awry.
What's the Secret to Organizational Effectiveness & Bottom-Line Growth?
- Companies with engaged employees outperform those without by up to 202%
- Peers and camaraderie, not money, are the number 1 reason employees go the extra mile
- Highly engaged employees are 87% less likely to leave the company they work for
When your organizational culture is aligned with your goals and your people share the same contagious enthusiasm, you’re setting the groundwork for financial success and an incredible reputation, both internally and externally. Now’s the time to build a better culture—a resilient culture. Our ebook, “How to Build a Resilient Organizational Culture,” shows you five key steps that will enable your organization to propel forward through any disruption.