Culture. It may seem intangible and difficult to define, but we know a good one when we see it. According to Merriam-Webster, culture is “the set of shared attitudes, values, goals, and practices that characterizes an institution or organization.” As long as we bring people together for a said purpose, a culture will develop around them, good, bad or otherwise.
As our clients continue to focus on labor market competitiveness, I encourage them to think of culture as the “X factor”—an intangible that brings employees in the door, keeps them there, and even drives business results. In my experience working with hundreds of HR practitioners, I have identified a number of truths about company culture that help organizations build and leverage this powerful secret weapon.
1. Culture has a real business case.
Culture may be somewhat intangible, but it is not a “pie-in-the-sky” concept. The business case for culture is real. One paper published in the Journal of Organizational Behavior actually established causality, demonstrating that culture had a positive impact on sales in the auto industry. Similarly, a Columbia University study demonstrated the likelihood of employee turnover to be significantly lower in organizations with strong company culture (13.9%) than those with weaker company culture (48.4%). Harvard Business School took a different approach by quantifying the cost of having a toxic employee, estimating a $12,500 cost savings for every toxic employee that is exited from the organization. Imagine the cost savings if a toxic employee is a people leader? With that in mind, the very first thing I tell my clients is to recognize the current value of their culture and the real benefit of investing in it.
2. Culture is not a project, but a mindset.
Although the business case is strong, it is important to recognize that culture is not a discrete project, with a beginning, middle, and end. Culture is a ubiquitous mindset, a part of every project we do – from the initiatives we invest in, to the way we communicate about them, and the expectations we set. For example, if honesty and integrity are important parts of your culture, they should be baked into everything you do, say, and reinforce. Warby Parker, a prescription eyeglass retailer, is known for building a winning culture by having a culture team. The “culture team is in charge of planning company outings and themed luncheons, making sure that there is always an upcoming event….” While employees may rotate in and out of the culture, their work is never actually done. Their focus on culture is ongoing.
3. Culture starts at the top.
If culture is not a project, then where do companies begin to build a winning culture? At the top. Our company culture is almost always a reflection of our leaders, but a leadership-driven culture has both pros and cons. While some will attach to the culture organically, other groups may need to be connected more proactively and deliberately. Picture a CEO who is an avid long-distance runner. Employees that share his passion will run alongside him in the company-sponsored marathon or share watercooler moments about their recent finishing times. But what about the employees who don’t or can’t run? Take the extra step to find ways to connect all employees to the culture. Perhaps use “marathon metaphors” for sales contests or R&D goals. Ensure leaders are not just “being” the culture, but creating a culture that connects to all parts of the organization. On the flip side, be aware of leaders promoting negative attributes (i.e., demeaning language, disrespecting boundaries). If left unchecked, these behaviors will also become a part of your culture and become damaging to the organization.
4. Culture needs an owner.
While culture might start at the top, it does not have to end there. I firmly believe that culture needs an owner in every organization – a person or team that is proactively monitoring, evaluating, and modifying the culture to ensure it supports a company’s goals. For example, a company might say they have a family-friendly culture, but in reality, employees are being shamed for leaving work at night or being discouraged from using PTO. Some organizations, especially those that conduct regular climate surveys, create teams to ensure survey recommendations are being implemented in support of company culture. These “culture clubs” ensure focus and accountability. Whether it is a single executive sponsor or an entire cross-functional team, monitoring and managing culture should be someone’s job.
5. Culture can be changed.
With a point person in place to care for company culture, effective monitoring and managing can begin. I encourage clients to always make sure the “music matches the lyrics.” If there is a disconnect between a leader’s actions and the stated culture, there is work to be done and it should be done swiftly. In some cases, remediation can be minor, like adding language to employee communication materials. In more extreme cases an intervention might require parting ways with a toxic employee (as we have seen in recent cases of sexual harassment). Addressing culture-damaging situations sends a strong and positive message to employees, strengthening your culture and helping that part of the organization to heal.
6. Culture is a brand.
Culture is only an asset if people know about it and feel good about it. If you have a great culture, flaunt it—leave a fingerprint on every aspect of the employee experience. Think of it as an external marketing campaign. Invest in creative assets that make a splash and show why your company is great. Produce a recruiting video and include the company dog. Create a colorful brochure to promote your core values. Have your executive team consistently include company catchphrases in employee communications. I worked with one company that celebrated their 10 year anniversary with a culture-themed scavenger hunt. Make it clear at every turn why your company is a great place to work.
7. Culture is experienced.
Like any good brand, culture is about more than a logo. Good culture is about the experience. Invest in creating an experience that makes your hard-working employees feel great. For example, Inspire HR is a family-friendly organization. We want our employees to feel good about being working parents. Not only do we encourage our employees to take proper vacation time, but we invite employees to share photos of their family enjoying their precious time off together. Another great way to help employees experience their company’s culture is through wellness. Many organizations are now going way beyond the chair massage, recognizing that mental health and stress reduction are big priorities for employees. So much so, that we now have Perkscon (like Comicon, but for employee perks!) to help companies make the experience of wellness a cultural competitive advantage.
8. Culture impacts diversity and inclusion.
Building culture through experience is a winning strategy, so long as it touches all employees. Diversity and inclusion efforts are inextricably linked to your company culture – invest in one and you will enhance the other. Ensure your company is a place where all employees, including any The truth is a great company culture is like a magnet for top talent and a boost to your bottom line. Whether your building, refining or repairing your company’s culture, don’t overlook this powerful secret weapon. marginalized groups, can come to the office, be themselves and do their best work. Look to surpass minimum standards for anti-harassment programs. Examine your leadership layer. Does everyone look the same? Invest in Employee Resource Groups, including a budget and a sponsor. Lack of diversity is a glaring cultural weakness as you look to attract, retain and do business in an increasingly diverse marketplace.
9. Culture is hard-coded in performance management.
No matter what your culture looks like, it is likely hard-coded in your performance management system. Strong cultures tend to tangibly reward employees for attributes and behaviors that reinforce core values. Consider a performance appraisal that rates an employee on respectfulness or honesty, with results that impact bonus, salary, and promotion. Attaching culture to hard financial rewards is highly reinforcing. But consider the opposite. A performance management system with no link to core values leaves room for toxic pockets to emerge and grow within the organization.
To learn more about building a winning culture, contact me at [email protected] or (917) 612-8571.