Prospective employees are increasingly asking the “what’s your culture?” question, and employers increasingly strive to ensure that new hires will be a cultural fit. While most people have a general understanding of what company culture is, arriving at a precise definition can be difficult. And structuring your organizational design to reflect this, can be even more challenging.
The meaning can vary widely from organization to organization, but it can also vary within organizations themselves. One leader may focus on employee satisfaction and wellbeing while another may point to community engagement and external client perceptions. Now, more than ever, understanding how company culture is created is critical.
Culture, at its core, is intertwined with a company’s identity. It is comprised of several elements working in concert to create a cohesive experience and perception that are evident from both within and outside of the organization. Culture defines, in part, how employees and managers interact, but it is also a product of the company’s vision and the values exemplified by the leadership team. In order to fully understand culture, one must examine, not only what is said, but also what is done. Where is the company investing resources? What flexibility do employees have when performing work? What values are being rewarded?
Why culture matters:
Studies have shown that a strong company culture contributes significantly to employee retention, which leads to reduced recruitment and training costs. In fact, some studies rank culture above traditional attractors such as pay and perks. Companies with a strong culture also have employees who are more engaged and, therefore, more productive and more willing to serve as company advocates, which can have a direct impact on an organization’s branding and business development efforts. Companies with strong cultures also experience higher increases in revenue growth and stock price.
Building a strong culture:
While companies tend to understand the benefits of a strong culture, an industry study by Deloitte found that less than a third of executives understood their own organization’s culture and only 12%believed their companies were driving the “right culture.” Ensuring your leaders live and breathe the company culture, both behaviorally and through their communication, is essential.
Recognizing that culture shifts as new employees onboard is an important milestone. And leaders need to shift with this.
Enlisting employees to help assess and steer culture, engaging in transparent communication, celebrating successes internally, and evolving as company culture evolves are also key.
Culture and organizational design often go hand in hand, and yet can also be overlooked. If your organizational design doesn’t compliment your company culture, your culture can be diluted or even lost, overnight.
Building company culture and looking at the organization takes intentional steps over a period of time, ensuring everyone buys in. Those who strategically use organization design to amplify culture are the ones who win and attract and retain the best people.