It is essentially what makes a company unique and includes everything from the physical office environment, policies and procedures, corporate structure, community involvement to the character and conduct of its staff. Its importance can’t be understated, but the degree to which different organisations implement it varies.
Companies often try to sum up their culture in their mission statement or corporate values but it is much more than this. Corporate culture usually comes from the top down, so stemming from the values and actions of the senior leadership.
The most successful corporate cultures are usually those that reflect the broader culture of their market. For example, technology start-ups tend to have a flexible and laid-back working culture that simply wouldn’t be suitable for a more established and traditional company.
Corporate culture is extremely important to the success of a company, as it has a huge impact on two key areas: company performance and recruitment and retention.
The most successful businesses are those with productive and engaged employees, and culture is the key to achieving this. Indeed, having a strong company culture means that the values and working practices of your employees will be aligned with those of their co-workers and the business as a whole and they will be more motivated at work as a result.
According to Maslow’s Hierarchy of Needs, the peak of human development is self actualisation. In business terms, this requires an employee to be able to fully connect who they are with what they do, giving them a strong sense of purpose that makes them more likely to achieve.
Corporate culture also impacts directly on your company’s revenue. Companies with a strong internal culture aligned with their external brand are able to deliver better products and services and better customer service. One of the best known studies into the link between company culture and performance found that a strong culture could “consistently predict higher subsequent levels of customer satisfaction ratings and sales”. Organisations with an engaged culture had a 65% greater share-price increase, 30% greater customer satisfaction levels and 15% greater employee productivity.
According to the Business Culture Awards, set up to recognise companies with an exceptional workplace culture, “Your business culture underpins how engaged and productive your colleagues are on a daily basis. . . It’s the differentiator in how you deliver your service or products to your customers. The value in aligning the brand you portray externally with the internal day-to-day experience of your employees, is substantial, as repeatedly demonstrated by winning organisations.”
Recruitment and retention
Your organisation’s culture is one of the main reasons for new employees choosing to join you, as people want to work for a business with values and aims they believe in. When recruiting, it’s a key part of making yourself stand out from your competitors, as well as assessing whether Candidates are likely to do well.
Corporate culture is also a key driver for retention, as organisations with employees who feel embraced and developed are likely to have much lower turnover. According to the research mentioned previously, companies with a strong corporate culture have 100% more unsolicited employment applications, 26% less employee turnover and 20% less absenteeism.
The Chartered Management Institute and Glassdoor recently published a list of the 20 UK companies with the best workplace cultures, using a new methodology to quantify positive cultures and leadership and reflect their relationship with business performance and employer branding.
They found that “The best, most innovative modern companies – and they range from global media behemoths to small UK agencies – put their organisational and management culture front and centre.” Against a backdrop of overwhelming evidence, it’s fair to say that any investment in nurturing your company culture will pay dividends over and over again.