The Complete Guide to a Great Corporate Culture

Unternehmenskultur – Mitarbeiter beim Meeting

We wrote the definitive guide to corporate culture, and now we want to share it with you! Whether you call it corporate culture, organizational culture, or workplace culture, they all mean the same thing. More importantly, they can mean the same thing to your organization: an improved employer brand, company performance, and long-term success.

You can download our guide to corporate culture right here.

What Is Corporate Culture?

The term corporate culture refers to the idea that your workplace leaves a lasting and tangible impression on past, current, and future employees by simply existing. It is the emotional environment of your workplace, and it is both defined by and defines working relationships between managers and employees, employees and customers, and employees working together. Basically, it runs through the entire fabric of your organization.

Does Every Company Have A Culture?

Here’s the hard truth: Whether your organization chooses to define it or not, every business has a corporate culture. When you don’t define it, though, you open up the opportunity for culture to define itself. That could lead to misalignment, frustration, or worse, a toxic work environment for everyone.

If you’re looking for a starting point, corporate culture typically reveals itself through:

  • Values – What your organization stands for.
  • Norms – What is commonly practiced at your company.
  • Routines – How processes look for those involved in them.

Let’s quickly break down each:

ElementExplained
ValuesWhat does your company "believe" in? This could be something like "always put customers first," "act with impact," "respect one another," or more. Basically, your company's values should be aspirational, but they should also come with lived examples.
NormsValues need to be translated into actions, so organizations often think about ways to make values "real" by turning them into principles or methods of operation. We can think of these as 'norms,' the behaviors that employees are expected to act within -- it could be "always provide feedback" or "assume positive intent."
RoutinesFinally, if values are beliefs, norms are principles or actions, then routines are repeatable and meaningful standards that help corporate culture "come home." In this sense, a routine could be onboarding, company-wide events, or even something like the performance review process. Routines should always align with norms and values.

How Far Does Corporate Culture Extend?

Think of it like this: Team culture is an extension of corporate culture in the sense that, even in smaller teams as part of a larger organization, each can have its own unique culture. In some cases, this could be positive and could augment your overall culture, and in others, it could be potentially negative (or, worse yet, toxic).

How Do You Manage Corporate Culture?

Ultimately, it falls on HR (as well as top-level management) to put some effort into managing this culture. Keep in mind, though: Culture will form on its own even when it is not defined by management or by the guiding vision of a company. This can be positive, but it can also be very negative. For that reason, it is better for HR to take a driver’s seat position.

After all, management equals culture. That’s it, short and sweet.

If employees are managed well, they have a positive perception of their company’s culture and are therefore more likely to commit to it.

Management and corporate culture are expressed in the form of general environmental conditions, such as:

  • Working hours
  • Introductions
  • Dress codes
  • Salaries
  • Health care
  • Child care

If we pull back to the earlier part of our conversation, companies can have a direct impact on the values defined, the norms that go with them, and the routines that emphasize and build on them. This then asks the question: What are some good examples of corporate culture set by management?

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What Are Some Good Company Culture Examples?

An organization can be perceived as being service-oriented and innovative, just as easily as it can be seen as backward or unapproachable. Corporate culture is real, tangible, and has a concrete effect on employees.

In that sense, corporate culture is the way in which a company acts. How it thinks, how it feels, and even how it expresses opinions. Thinking about it further, it can be expressed in various ways, including:

Company Culture Examples
Handling conflict and mistakes
Optimizing employee identification within the company
Communicative behaviors
Appreciation of commitment and performance
Engagement with stakeholders
Willingness to take risks
Feedback processes
Commitment to family-friendliness

It especially comes across in the ways in which employees interact with customers. A key example would be if a customer makes a purchase, but doesn’t hear back from the company afterward. This lack of communication is systematic and is a standard that is (for better or worse) set by the corporate culture.

Let’s consider another corporate culture example: ‘Employee Y’ is working on a difficult task and discusses it with colleagues over lunch. These colleagues immediately volunteer to help, even though it will require them to work overtime. This, too, is an example of organizational culture in practice.

Given the above, it doesn’t really make a lot of sense to ask applications about specific values (e.g. “are you proactive?”) during an interview. It is far more productive to ask them about behaviors, where they can demonstrate that they act in line with particular values rather than agreeing to them.

This is the difference between a culture ‘in principle’ and a culture ‘in practice’:

In PrincipleIn Practice
A list of what they believeA list followed by real-world examples
General ideas about what mattersConcrete actions that can be spoken about
A basic printout and nothing elseActive ways and meetings to showcase examples of culture

Why Should You Improve Your Corporate Culture?

So, why does it benefit a business to have a sound organizational culture? There are a variety of reasons why it helps, which we’ll dive into right now…

1. Lower Turnover

According to a study by Columbia University, there is a direct correlation between staff turnover rates and what is rated as strong organizational cultures (48.4% versus 13.9%).

The fact is that retention rates can tell you a lot about the state of your organizational culture. The main takeaway, though, is that a toxic type of culture can force people out the door in greater numbers and at greater speeds.

When you have a strong culture, though, employees feel validated, engaged, and motivated to be their best. Therefore, they become more attached to your company and want to stay longer. Not only are people more satisfied with their work, but they are also satisfied with their workplace.

2. Seamless Hiring

Building on lower rates of turnover, hiring talent becomes even easier for companies that have a strong organizational culture. That’s not only because your employer brand becomes stronger, but employees are more likely to help you build a strong employee referral program.

It also makes the recruitment process seamless, too, as having a defined culture can make it easier to vet and hire talent for just about any role. You not only have more talent, but you’re better able to keep them around for longer, too.

3. Better Atmosphere

According to CultureIQ, employees who work in companies with a strong organizational culture feel like their atmosphere and overall mission are more clear (and, therefore, stronger).

This is an imperative element of organizational culture when it comes to impacting business performance. After all, employees need to enjoy where they work and feel a tangible connection to their day-to-day tasks. If they lost this, they lost motivation, which ultimately costs the company.

A better work atmosphere ensures that employees are happy to come to work each day, and are motivated to do their best. This leads us to our next point…

4. An Increase In Revenue

When it comes to the bottom line, a strong organizational culture is simply better for business. According to Gallup, selecting high-talent managers (a byproduct of a strong culture) can lead to 27% increased revenue per employee.

On top of that, individual contributors can add 6% to their own work. That results in a 33% increase in revenue by focusing on a culture that attracts talent and has the engagement metrics to match.

This reveals itself in multiple ways, whether you want a culture driven by feedback, performance, or a combination of multiple approaches. In general, when you make a positive organizational culture a priority, it increases revenue.

5. Higher Growth

Building on revenue, and according to Forbes, 50% of executives in various companies have stated that positive organizational culture has a direct influence on growth rates.

Culture is something that builds on itself. Once you spend the time to craft a vision, goals, core values, and ways to live there, it lays the foundation for growth. Whether attracting more talent, retaining, or getting the most out of them.

Therefore, companies that devise a cultural strategy are better able to grow because they have a clear idea of who they are and what they want to achieve across the organization.

6. Time Savings

Last, but not least, there are the time savings that come from a strong organizational culture. As per the Engagement Institute, employees who identify with their company are more motivated to work harder and cost their companies less.

That’s because the more you ratchet up the connection an employee feels with the company, by way of the culture, the more likely they are to do the right thing for the company every time. In fact, they will view their own interests as the company’s interests (this is a key element of what is known as the psychological contract).

When these two go hand in hand, it has a cascading effect on everything we just mentioned. Employees feel more connected, work harder, save time, drive revenue, and the business benefits no matter what it is trying to do.

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Corporate Culture: Frequently Asked Questions

A strong organizational culture, and a strategy that invests in it, essentially means ensuring that every employee (from interns to executives) identifies with the company and understands what the company stands for (and against).

Here are some of the most frequently asked company culture questions out there:

What Are The Key Components Of A Good Corporate Culture?

The components of company culture can often be understood as an organization’s system of shared:

  • Vision
  • Values
  • Norms
  • Symbols
  • Attitudes

Each of these influences how employees act, and interact, with one another, and how they feel about the company. It also extends to every level of the organization, but it can be determined by just about anyone, anywhere, and at any time. If it sounds difficult to define, that’s because it is!

Who Is Responsible For Corporate Culture?

It starts from the top. Company culture includes every member of senior management, but it extends all the way through to each and every employee. This includes managers, leaders, and even part-time employees, too. It can also include clients or customers, too, when it comes to their shared relationship with employees.

How Do You Define Corporate Culture?

We may want to start with a cultural model, something like the cultural web model, to define culture. If we want to understand corporate culture as a topic, though, it helps to start with a few key questions:

  • What does our organization stand for?
  • What is important to our organization?
  • How are those two related?

What Are The Benefits Of A Great Corporate Culture?

If you have a positive corporate culture, it can help ensure that:

  • Employees feel supported in times of crisis.
  • Companies achieve their set goals.
  • Employees feel good as part of the company, actively contributing to it and staying in the company.
  • Organizational development is achieved.

Support A Culture Of Performance & Development

Performance_Goals

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What Should HR Do About Corporate Culture?

Firstly, HR, just like managers, can be role models for a positive corporate culture.

This means that they have internalized the organization’s values to such an extent that they translate them into behaviors. Additionally, HR can help employees understand the organization’s culture.

HR can support corporate culture by:

  • Formulating and communicating a mission statement (in cooperation with management)
  • Taking initiatives to develop teams
  • Offering professional development opportunities
  • Organizing events
  • Promoting the exchange of knowledge
  • Sharing information and keeping messages consistent

Moreover, HR can support the organization’s culture as early as the recruitment process by ensuring that there is a good cultural fit between applicants and the company. To do so, HR should have a standardized process and ask candidates about their values and norms in a behaviouristic manner.

Another task is to convey the company’s culture in external relationships to strengthen its employer branding.

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