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Why organizational culture is important

By Corey Moseley

8 min read

Why organizational culture is important
Illustration by Justin Alm

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).

What is organizational culture?

Organizational culture is basically the shared values, beliefs, behaviors, and practices that shape the way a company does things. Think of it as the unwritten rules that guide how people act and make decisions. And let me tell you, it can totally make or break a company.

If you have a strong organizational culture, you'll attract and keep top talent, keep employees engaged, and even make more money. But if your culture is toxic, you'll get high turnover, low morale, and bad performance.

So, it's important to have a positive organizational culture. This means figuring out what values and beliefs matter most to your company, and then making sure your policies, practices, and behaviors all uphold those values.

The end goal is to create a workplace where everyone feels like they're part of a community, with a sense of purpose and motivation. And when everyone's on the same page, the whole company benefits.

7 reasons why organizational culture is important

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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.

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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.

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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.”

How to boost your organization's culture

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Improving your organization's culture can be a tough job, but it's super important to keep your employees happy and successful. Here are some tips on how you can boost your organization's culture:

1. Define your core values

Your organization's core values should be the foundation of your culture. Take some time to figure out what they are, and make sure everyone in your organization gets it and lives by them.

2. Hire people who fit

When you're hiring new employees, make sure they're a good fit for your organization's culture. This doesn't mean hiring people who are exactly like everyone else in your organization, but rather hiring people who share your core values.

3. Make a positive work environment

It's important to create a positive work environment where your employees feel valued and supported. This can include things like flexible work hours, opportunities for professional development, and a comfortable workspace.

4. Celebrate success

Celebrating success is an essential part of building a positive culture. Make sure you celebrate milestones, acknowledge hard work, and reward your employees for their successes.

5. Encourage open communication

Encouraging open communication is critical for building a healthy culture. Make sure your employees feel comfortable sharing their ideas, concerns, and feedback. You can do this by setting up regular check-ins, creating anonymous feedback channels, or holding company-wide meetings.

6. Lead the way

Finally, it's essential to lead by example. Your employees look to you for guidance and inspiration, so make sure you're embodying the culture you want to create. This means living your core values, recognizing success, and communicating openly and honestly.

Improving your organization's culture takes time and effort, but it's worth it. By defining your core values, hiring for cultural fit, creating a positive work environment, celebrating success, encouraging open communication, and leading by example, you can build a culture that supports the success and happiness of your employees.

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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