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7 reasons why organizational culture is important

Posted by Corey Moseley | 5 min read

7-reasons why organizational culture is important

Why does it matter that your organizational culture is one way rather than another way?

It turns out it matters a lot. Organizational culture is hugely important to the success and overall health of your company, your people, and your customers. So it’s helpful to spend time considering why your company’s culture is the way it is, and why it’s important that it stays that way (or changes).

Let’s take a look at seven reasons why organizational culture is important.

7 reasons why organizational culture is important

1. It defines your company’s internal and external identity

Here’s a thought exercise: write down on a piece of paper five attributes that best describe your organization’s culture. You might write something like “good work-life balance” or “lots of meetings” or maybe “team-oriented.”

Now, spend a few minutes thinking about why each of those attributes is important to your organization in particular. Why is it significant that your company has a good work-life balance? What makes these culture attributes valuable to your people and customers?

Peter Ashworth explains that your organizational culture “defines for you and for all others, how your organization does business, how your organization interacts with one another and how the team interacts with the outside world, specifically your customers, employees, partners, suppliers, media and all other stakeholders.”

In other words, your organizational culture will reverberate across all aspects of your business because it represents the way you do business. It’s simultaneously your identity and your image, which means it determines how your people and customers perceive you.

2. Organizational culture is about living your company’s core values

Your culture can be a reflection (or a betrayal) of your company’s core values. The ways in which you conduct business, manage workflow, interact as a team, and treat your customers all add up to an experience that should represent who you are as an organization and how you believe a company should be run. In short, your culture is the sum of your company’s beliefs in action.

But if your espoused values don’t match your culture, that’s a problem. It could mean that your “core values” are a list of meaningless buzzwords, and your people know it.

A strong organizational culture keeps your company’s core values front and center in all aspects of its day-to-day operations and organizational structure. The value of doing so is incalculable.

3. Your culture can transform employees into advocates (or critics)

One of the greatest advantages of a strong organizational culture is that it has the power to turn employees into advocates.

Your people want more than a steady paycheck and good benefits; they want to feel like what they do matters. And when your people feel like they matter, they’re more likely to become culture advocates—that is, people who not only contribute to your organization’s culture, but also promote it and live it internally and externally.

How do you achieve this? One way is to recognize good work. A culture that celebrates individual and team successes, that gives credit when credit is due, is a culture that offers a sense of accomplishment. And that’s one way to turn employees into advocates.

Then again, if your company culture doesn’t do this, you may be inviting criticism.

4. A strong organizational culture helps you keep your best people

It should come as no surprise that employees who feel like they’re part of a community, rather than a cog in a wheel, are more likely to stay at your company. In fact, that’s what most job applicants are looking for in a company.

Ask any top performer what keeps them at their company and you’re bound to hear this answer: the people. It’s because a workplace culture focused on people has profound appeal. It helps improve engagement, deliver a unique employee experience, and makes your people feel more connected.

One way to attract top performers that are natural culture champions is to hire for cultural fit.

5. A well-functioning culture assists with onboarding

Organizational culture also has the potential to act as an aligning force at your company. This is particularly the case with new hires who, more often than not, have put some considerable thought into the type of culture they’re entering into.

The culture at your organization is essentially a guiding force for them, so it’s important that it starts with onboarding.

Writing in Forbes, George Bradt explains further: “People fail in new jobs because of poor fit, poor delivery or poor adjustment to changes down the road. Assuming you’ve aligned the organization around the need for your new employees and acquired them in the right way, your onboarding program should accommodate their needs (so they can do real work), assimilate them into the organization (so they fit culturally) and accelerate their progress (so they can deliver and adjust).”

6. Your culture transforms your company into a team

A successful organizational culture brings together the people at your company and keeps them aligned. When your culture is clear, different perspectives can gather behind it with common purpose. The culture at your organization sets expectations for how people behave and work together, and how well they function as a team.

In this way, culture can break down the boundaries between siloed teams, guide decision-making, and improve workflow overall. On the flip side, a toxic organizational culture has the capacity to do just the opposite.

7. Culture impacts performance and employee wellbeing

Reports show that organizational culture has a direct impact on performance and, more importantly, your employees’ wellbeing. A healthy culture addresses both of these areas by finding an appropriate balance based on company values.

Does your company stress performance to such a degree that you feel like your physical and mental health are being overlooked? There might be instances when that may not be a problem, but for the vast majority of cases, it’ll have a negative effect on your company.

Paul Barrett sums it up nicely, writing that “Employee wellbeing strategies have the potential to bring huge benefits to employees and employers alike but they need to be introduced in the right way for the right reasons, and at the right time. To be properly effective they need to be developed in a holistic way, consistent with a business culture that is conducive to their success. That means supportive management behaviours, flexible working options and an open culture that allows employees a voice and some say in shaping the working environment.”

Conclusion

These are just a smattering of reasons why organizational culture is important, but they’re a good starting point to get you thinking about what your own organization brings to the table. What’s important at your company might be totally different depending on the situation.

So what are your next steps? Find out what aspects of your organizational culture are most important to your people, and think about performing a culture audit. Your goal is to discover what your people value most and support that. Congratulations, you’re one step closer to creating an extraordinary workplace.

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