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A Modern Leader’s Complete Guide to Company Culture

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Updated on 

April 22, 2024

22

 

April

 

2024

No matter what business you’re in—retail or finance, tech or manufacturing—the people who work together to drive your company forward matter just as much as your customers. And your teams want more from their work than just a paycheck. They crave connection, purpose, and a healthy workplace environment. This is where your company culture comes in.  

It would be easy to dismiss company culture as just another business buzzword, or as a vague idea that’s as hard to define as it is to measure. But the truth is, company culture matters. Its impact ripples across your internal systems and even throughout your customer experience.  

This guide examines company culture—what it is, how you can measure it, and tips for making sure your workplace culture is as strong and healthy as possible. These insights come directly from our experience working with thousands of companies for nearly a century and from our research that uncovers the views of tens of thousands of research participants.  

Read on to see how you can start elevating your own company culture.

What is company culture?
  

Company culture is the social operating system that influences how people work and how an organization interacts with its employees, customers, and community. In other words, it’s the heart and soul of your organization. Whether you call it corporate culture, organizational culture, or workplace culture, company culture is the essence of the company you work for.

You’ll see company culture reflected in many areas of your organization:  

  • Your corporate values  
  • Your organization’s purpose and company mission
  • Your human resource policies and programs
  • Your work environment
  • How your teams get work done together
  • Your overall employee experience  

Company culture incorporates the history, story, vision, beliefs, norms, and expectations held by your company. And while company culture is often intangible, it’s felt by everyone who interacts with your company—even external clients, vendors, stakeholders, and the public.

“Our workplace culture is definitely one of our biggest differentiators. People work here because they believe in our mission and culture.”
—Dana Ullom-Vucelich, Chief Human Resources & Ethics Officer at Ohio Living

Why is company culture important?


Company culture defines an organization. Think of your culture as the central nervous system of your organization. It connects all the people in your organization and influences the experience of your employees, your customers, and the community in which your organization operates.

Just like the health of your nervous system impacts your overall wellbeing, company culture can make or break an organization. Companies with great workplace cultures have incredible advantages. They attract and retain talent, mobilize innovation, and develop strong leaders. People want to work for, and do business with, companies that have strong cultures.

Companies with failing cultures? These companies struggle to keep employees and lack the necessary foundation for ongoing success and growth.  

What it comes down to is this: If you want your business to thrive, your employees need to thrive first. Your company culture plays a pivotal role in the employee experience and the success of your organization.

We’ve done the research. See what employees really want (and need) in our annual Global Culture Report.

How does company culture impact employees?

Employee happiness and motivation is built on the countless micro-experiences they encounter day to day. The working environment, communication practices, and manager relationships all affect how employees view their company. When a company’s culture is strong, mental wellbeing is promoted and employees perform at a high level.

The stats say it all. Companies with great workplace cultures are:

  • 4X more likely to have highly engaged employees
  • 4X more likely to have employees that are promoters on the Net Promoter Scale
  • 7X more likely to have employees innovating and performing great work
  • 11X less likely to have experienced layoffs in the past year

What makes a good company culture?

Research from the Global Culture Report spotlights six key elements (we call them Talent Magnets™) that, when done well, contribute to a company’s ability to attract and retain top talent:

  • Purpose
  • Opportunity
  • Success
  • Appreciation
  • Wellbeing
  • Leadership
The Talent Magnets from O.C. Tanner Institute research

Purpose

Have an engaging purpose. Employees want to feel connected to something greater and make a difference in the world. Articulate the difference your organization makes to the world and highlight the unique benefit your company provides your employees, your customers, and society.  

What the data says: When employees feel connected to purpose, there is an 858% increase in the likelihood that employees will be engaged.

Connect individual employee contributions directly to purpose. Employees want to know how their specific work matters. By frequently and consistently connecting an employee’s work to the greater organizational purpose, you not only reinforce that purpose but show the value an employee’s work brings to your customers.  

What the data says: When employees feel they are doing meaningful work, there is a 61-point increase in employee Net Promoter Score and a 49% increase in motivation to contribute.

Opportunity

Empower all employees to lead. Leaders aren’t just those with an official title. Empower every employee to take ownership of their work, project, and sphere of influence.  

What the data says: When organizations believe and treat every employee as a leader, regardless of title, they are 304% more likely to have an above-average Opportunity score.

Utilize special projects. Being chosen to participate in a special project shows employees they are valued and have unique talents. It gives them visibility with leaders and peers they may not normally interact with and exposes them to new knowledge and skills.  

What the data says: Working on special projects affects an employee’s sense of opportunity, but also impacts their engagement, perceptions of leaders, and motivation to do great work.

Success

Share success. Broadcast stories of employee success and victories in town halls, team meetings, emails, and newsletters. Publicly recognize employees when they do great work.  

What the data says: When news of success is shared across the organization, employees are 82% more likely to know what success looks like at the organization, and 57% more likely to feel appreciated.

Allow for safe failure. Give employees the room to take smart risks and acknowledge and learn from failure.  

What the data says: When failure is an accepted part of the innovation process, there is 166% more innovation leading to 60% more great work happening. When employees feel their company encourages innovation, 78% are committed to staying with that employer.

Appreciation

Embed recognition in your everyday culture. Employee recognition is most successful when it’s an integrated part of an organization’s culture. Recognition is successfully integrated and embedded when it happens frequently and is given in personal ways, like with O.C. Tanner’s Culture Cloud.

What the data says: Organizations with integrated recognition are 4X more likely to have highly engaged employees, 2X more likely to have increased in revenue over the past year, and 44% less likely to have employees suffering from burnout.

Make recognition personal and meaningful. The best recognition moments are thoughtful and personalized to the individual recipient. Tailor the experience and award to reinforce that employees are valued as individuals for their unique contributions.  

What the data says: When recognition is personalized, appreciation scores increase 747% and organizations have an 11x greater odds of high employee engagement.

The major elements of employee recognition integration in an organization

Wellbeing

Build an inclusive culture. Inclusivity doesn’t just mean diversity. It’s helping employees connect to the organization and feel like they belong. Foster a work environment where employees are valued as individuals and can bring their authentic selves to work, no matter their race, gender, age, ability, sexual orientation or background.  

What the data says: When an organization’s culture is inclusive, employees are 141% more likely to feel a sense of belonging.

Have regular one-to-ones with your people. Encourage leaders to hold regular one-to-one meetings with each of their people, even if it must be virtually or over the phone. Meetings should include time for feedback and checking in on projects, but more importantly time for recognition, mentoring/coaching, brainstorming, and development opportunities.

What the data says: Monthly one-to-ones decrease the odds of burnout by 39%. Bi-weekly one-to-ones reduce the odds by 84%.

Leadership

Develop modern leaders. Modern leaders are those who mentor and coach rather than micromanage and gatekeep. They advocate for their people, help them build connections in and outside the team, and inspire great work.  

What the data says: When organizations have modern leaders, rather than traditional leaders, engagement increases 40% and odds of burnout decrease 57%.

Help leaders connect their people. Modern leaders connect their people to three things: purpose, accomplishment, and one another. These connections can be easily made in recognition moments or one-to-one meetings.

What the data says: When leaders connect employees to all three areas, organizations are 10x more likely to have a thriving culture, and 11x more likely to be inclusive.

Modern leaders connect their people to purpose, accomplishment, and one another

These best practices can help you build a culture where employees thrive. Refer back to the checklist periodically to gauge your improvements, or conduct a Culture Assessment to get deeper insights. Focus on creating peak employee experiences in each of the six Talent Magnets, and you’ll be well on your way to helping your people thrive.

Get more insights into how these six Talent Magnets can drive employee engagement and satisfaction across your organization.

How do you measure company culture?

Evaluating the health of your workplace culture is a multi-step process that revolves around gathering feedback from your employees. One of the best ways to do this? An internal company culture survey.

An employee giving a presentation in an office

What is a company culture survey?

An organizational or workplace culture survey is a way for employers to gauge how their employees feel about the work environment and identify areas where they can improve. It gives upper management a simple way to make sure the business is operating in a manner that stays true to the company’s core values.  

Here is a basic overview of the process of measuring company culture with an employee survey:

  1. Look at the company’s core values and mission statement and the stories they tell prospective clients and employees. What stands out about the business and represents how the company operates?
  1. Talk to the employees and see what they have to say. The best way to do that is through a workplace culture survey where employees can provide insight anonymously.
  1. Dig into the quantitative and qualitative results of your employee survey. What trends appear? What is going well and what could be going better?
  1. Share the results with your teams. But don’t stop with reporting on the data—communicate how you plan to incorporate their feedback. Employees are more likely to participate in surveys when they know you are really listening and that you will turn their feedback into positive changes.

Beyond reading the responses to the survey, companies can also evaluate their workplace culture by looking at overall employee retention and performance rates. If employees stay on staff for years and seek promotions rather than jumping ship after a few months, the workplace culture is a positive environment.

Are employee surveys effective?

Conducting regular employee workplace culture surveys is one of the best things you can do for the company at large. These surveys will give you insight into how the company is doing, how team members perceive the company’s values, and what they need to be successful.

The key is to keep all responses anonymous.

These surveys are only effective if employees feel comfortable sharing their opinions and their experiences. Even if the company promises not to retaliate for negative responses, there’s always the fear (and risk) that a supervisor or management team member may change the way they treat an employee. Anonymous surveys result in better responses and have access to more data that tells you how the company culture is really being perceived.

Questions about company culture to include in your employee surveys

Whether you’re creating your own survey or using a premade workplace culture survey, there are a few key questions you should ask to make sure you receive enough data to analyze the quality of the culture at your company.  

  • How likely are you to recommend our company to a friend or colleague because of the workplace culture you’ve experienced?
  • Do you feel that your team members, managers, and the company respect you and your personal values?
  • Are there aspects of the organization that you believe can be improved? If yes, please explain.
  • Do you feel safe while you’re at work?
  • Are you happy with the types of reviews and promotion opportunities you have in the company?
  • Are there perks that you wish the company provided or perks that could be improved?
  • How many coworkers do you consider to be your friends?
  • On a scale of 1 to 10 (with 10 being the best), how respectful do you feel that your supervisor and coworkers are to you?

By asking these questions on your workplace culture survey, you’ll get a good feel for what employees think about your workplace culture while giving them the opportunity to suggest improvements.

“Our culture is the bedrock on which our brand and our company is built. Our FedEx culture is our ultimate differentiator.”
—Raj Subramaniam, President and CEO, Fedex Corp.

Company culture FAQs

How do you build company culture?

Building a positive company culture from scratch can be intimidating, but it is worth the investment. Start with establishing a strong code of ethics, instituting inclusive hiring practices, creating clear lines of communication, and providing comfortable working environments. These are just a few ideas, but you can read more of our tips for building company culture here.

How do you hire people who fit your culture?  

One of the primary goals of any human resources team is to attract talent that will fit the company culture. You want employees who will excel in your environment and enhance your established culture. But don’t expect new employees to create the company culture for you—and don’t make the mistake of hiring carbon copies of existing clients instead of thinking outside the box.

When hiring people, you should communicate and express your company values and beliefs to candidates as part of the interview process and allow them to ask questions. In turn, you should see how they feel about the culture you’ve described. Find out why they want to work for your organization. Do their expectations align with your workplace culture? Will they feel like part of the team?

How do you improve or change your company culture?

Improving your company culture can come down to making small changes that drive big impact. A few ways you can work to improve your company culture could be providing leaders with more resources for development, giving employees more autonomy and flexibility, and sharing regular appreciation across the company. Read more about these three powerful practices for improving workplace culture here.

How much do perks and benefits impact company culture?

Beanbag chairs and free soda can be great perks that improve the culture on the surface, but they don’t say much about the more meaningful aspects of a company’s culture. People don’t stay at companies for the foosball tables.  

While surface-level perks can make work more fun and enjoyable, a company’s benefits and policies tell you more about its culture. Flexible work hours, remote work policies, health benefits, and a willingness to incorporate employee feedback and requests into the overall benefits package all signal strong people-first company cultures.

Get the data and research-backed recommendations you need to elevate your company culture in our annual Global Culture Report.

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