What separates the mediocre businesses from the great businesses? What makes a customer actively choose your business over competitors time and time again?
The answer is simple – it’s a combination of engaged employees and fantastic company culture. Out of everything you can do, those two things can truly define your business performance and commercial success – both good and bad.
But why is that? What does the culture of a company mean, and does it really make such a huge difference? As outsourced HR managers who help business owners with all of their HR needs, we wanted to share our thoughts on its importance.
What Is Company Culture?
Company Culture is essentially the way an organisation does things. But this isn’t about policies and procedures, or any of the technical know-how. It is more about the values, behaviours, attitudes, and approaches that make each workplace unique. It’s rooted in the organisational goals, strategies and structures, customers, and involvement in the greater community. So, while two companies could provide the same products or services, no two would ever have the same company culture.
It’s also how it feels to work in the business and can be the difference between a good job and a bad one for candidates in the recruitment process. Put simply, it’s the glue that pulls all employees in the organisation together in search of one common goal, and it can have a huge impact on employee retention and recruitment, as well as performance. Most businesses try to summarise their company culture in a few words. A few examples could be:
- Transparent
- Inclusive
- Collaborative
- Nurturing
- Progressive
- Connected
But of course, each company is different! What do you think your company culture could be summed up as? If you’re not sure, you can always contact us here to find out more on how we can help you improve your company culture.
How Does Company Culture Impact Performance?
Research has shown time and time again that employee engagement rates are very closely linked to the culture within a company. Beyond that, businesses with good company cultures tend to have more engaged and satisfied employees, which in turn means an improvement in overall performance.
This doesn’t just form overnight. It usually starts with the business founders, who impose their beliefs, values, and assumptions onto the fledgling business, and onto their employees. As the company grows, those cultural elements become shared, and form the continuing culture of the organisation. This is one of the reasons no two companies are the same, and why many candidates will cite ‘I just didn’t fit in’ when they leave a job – because the company’s culture and values don’t tally with their own.
Workplace culture very much sets the tone for employee engagement and retention within your business. Once they have become part of the business, good company culture is what encourages those ‘best of class’ employees to stay with the business, decreasing turnover and improving profitability. Your company culture also has an impact on your ability to innovate as a business, how efficiently you work and how productive your employees are. It also creates a better customer experience, with happy and productive employees providing better service and building that sense of community that both customers and employees enjoy.
The interesting thing is that larger companies may end up with multiple cultures. A study into the organisational culture of the NHS done by Russell Mannion (Professor of Health Systems) found that the culture was far from uniform or coherent. Instead, working groups looked for and developed commonalities, with some only being prominent in some areas of the organisation. This meant that subtly different cultures could emerge with different occupational or professional groups within the same organisation. Moving away from the NHS, we often see this with businesses that have one head office and regional satellite offices. Each office tends to develop its own unique way of operating, which may be slightly different to other offices in the same group. This isn’t a bad thing! In fact, it actually allows each office to be productive and enhance performance in its own way.
Need Some HR Support?
That’s all we have time for in this post, but stay tuned for part 2, where we examine the warning signs of a bad company culture, and what you can do to improve it. And if you need any support to understand and manage your own company culture, we’re here to help.
At Karen HRM, we help business owners and managers just like you to understand your unique company culture, as well as how to fix any underlying problems and create a positive, thriving company for the future. If you aren’t sure if your employees are happy, we’d love to help. Contact one of our team today, and book in your free consultation to help improve your company culture.