Why Company Culture is Key to Success

It’s no coincidence that some of the world’s most successful businesses are known for having a great company culture. While a number of large organisations have seen their culture erode as they've grown in size, many brands have stuck to the values they established when they were startups. Not only has this seen them consistently attract and retain excellent employees, it has delivered commercial success and worldwide recognition in equal measure.

So, what sets the cultures of these companies apart, why is culture so important and how can companies create and maintain this winning combination? Before we answer these questions, let's establish what company culture actually means.

What is company culture?

There's no single definition of company culture but it can reasonably be described as the established norms and values of a business. Just like a town or country, a company can have its own traditions, habits, beliefs, attitudes and ways of doing things.

The culture of a business will generally permeate through the staff, procedures and activities of an organisation. In a traditional hierarchical structure, those on the higher rungs, such as managers and directors, tend to have more influence on setting and changing the culture. Encouraging vertical communication, scheduling regular team meetings, organizing staff social events and using open plan offices are all ways in which a manager can positively influence a company’s culture.

Why is company culture important?

Given a company culture touches every aspect of a business, this means it can have a profound effect on a company’s level of success or failure. Culture is often closely associated with employee satisfaction.

A positive staff culture will improve staff retention while increasing productivity and creativity, and this can have a positive influence on profitability. On the other hand, a negative workplace culture will result in higher levels of staff turnover, unhappy customers and, ultimately, minimal to no profitability.

Company culture can also manifest itself in the way that a business communicates with its employees and external stakeholders. By fostering a culture of open communication, a business will be better able to identify and capitalize on new, innovative ideas from its workforce. Similarly, management is more likely to find out about problems and failures much quicker, and take the appropriate actions.

What are the hallmarks of a great company culture?

If employees are brimming with ideas and enthusiasm and encouraged to share these, it's a great sign a business has a great company culture. Indeed, the behaviours of employees can tell you all you need to know about a company’s culture. These include things like staying late to help out a colleague, chatting over lunch about a great new product idea or approaching management when they’ve encountered a problem, confident they won’t be criticized or blamed.

Some of the best examples of company culture come from Silicon Valley, which in some cases has reinvented what company culture means. Google, for example, has established an open, informal product development culture where all employees are encouraged to come up with ideas, and everyone has access to the chief executive and founders. Likewise, Apple has a strong culture of innovation, but it’s reported to have achieved this through a strong culture of working hard and striving for perfection.

How do I create a great company culture?

The most dangerous thing you can do is assume that a great company culture will develop on its own. As a business owner or manager, creating and maintaining a positive, healthy culture takes a vast amount of thought and effort.

Remember that your actions, not just your words, will set a powerful example to your employees. As the leader of the organisation, your staff will look to you for guidance and direction. If you are unsure or apathetic, this will have a substantially negative impact on your company culture. However, if you want your business to have an open, cooperative and helpful culture, start by embodying those qualities in the way you deal with staff and clients.

Finally, and most importantly, focus on two-way communication to help spread the culture and make employees feel part of your corporate family. While an open-plan office or open-door policy will help encourage free and open communication with management, fostering a great working environment will bring huge benefits to your culture and company as a whole.