Creating or transforming culture is a long, complex process because it’s the collective essence of various things including the company’s purpose, leadership style, and attitude towards employees.
94% of executives and 88% of employees think workplace culture is critical for business success according to a Deloitte survey.
Almost everyone will tell you organizational culture is critical to a business’s long-term success. But few leaders can provide actionable insights on how to build a great culture.
Often, not being entirely clear about the meaning of corporate culture is the biggest barrier to creating it. So in this guide, we help you understand what organizational culture is, its importance, the qualities of a good culture, and how you can transform the corporate culture at your company.
What is organizational culture?
Organizational culture is a consistent behavioral pattern of an organization’s employees guided by the company’s values and goals. Put simply, it’s a sum of your leadership and employees’ daily actions and responses to situations.
Experts have defined culture differently over time and a standard, generally accepted definition doesn’t exist — according to SHRM:
“Culture is a nebulous concept and is often an undefined aspect of an organization. Although extensive academic literature exists relating to the topic of organizational culture, there is no generally accepted definition of culture.”
Defining organizational culture may be difficult — but looking for an organization’s cultural traits is relatively easier.
For example, you can get a sense of the organizational culture when you look at how the top management reacts during an emergency, how the company approaches innovation, or how leaders strive to create a positive work environment for the employees.
Why is organizational culture important?
Culture is important for almost every aspect of your business, including human and financial capital.
Good culture helps companies attract and retain top talent. According to a Glassdoor survey, 77% of employees will consider your company culture before applying.
Culture is also why two-thirds of employees stay at their job. Employees thrive in a good culture, which improves their productivity and performance. In turn, these factors can manifest into a healthy bottom line.
McKinsey researched factors that separate the highest-performing companies. The research reveals that all high-performing companies have one common denominator: a good culture.
The research also states that companies with top quartile cultures (as measured by McKinsey’s Organizational Health Index) show shareholder returns 60% higher than median companies and 200% higher than companies in the bottom quartile.
The pandemic made remote work the new normal, adding several challenges to creating a good culture. Most distributed teams only meet for a few hours daily over video, which doesn’t exactly make creating or sustaining a culture easier.
Technology is redefining the way work, and distributed teams can use these technological tools to create a culture. For example, teams can communicate asynchronously with teammates in different time zones or bond with teammates through virtual offsites.
Qualities of a good organizational culture
A good organizational culture typically has several distinctive characteristics such as:
1. Constructive feedback
Constructive feedback breeds success. It helps make consistent improvements, driving the organization towards its goals.
More importantly, constructive feedback creates a culture where companies can focus on growth without causing employee resentment.
A good culture is where employees at all levels, from C-level executives to department heads, commit to providing constructive feedback respectfully and offering help where necessary.
Teamwork creates a culture where focus shifts from individual achievements to the team’s collective achievements. Employees that understand the importance of teamwork collaborate more efficiently to achieve an organization’s goals faster and more efficiently.
While on-site teams can schedule team-building activities or plan office lunches, distributed teams can find bonding with the team a little more challenging. A remote employee can’t simply walk to a colleague’s desk and ask for help, makingcross-functional collaboration harder. But if organization’s take the time to put in the right infrastructure, location doesn’t have to be a barrier to creating an excellent organizational culture through team building.
A tool like Loom can helpbuild better relationships with your remote coworkers. The team at Brandwatch is an excellent example of how you canuse video to build a remote work culture if you're looking for inspiration.
The business environment constantly evolves and your company needs to adapt. Adaptability is even more critical when the company faces a crisis.
The problem? A crisis can put everyone in panic mode. The uncertainty incapacitates employees from thinking clearly unless they practice adaptability.
Adaptability is a great cultural asset because it helps the company weather a difficult phase more gracefully. Agile leaders and employees quickly adapt to the change, and realign the organization internally and externally to reposition it for success.
4. Clear, respectful, and proactive communication
Clear, respectful, and proactive internal communication is vital for a thriving corporate culture.
Clear communication helps ensure your employees are crystal clear about what the company is trying to achieve. It’s also vital so leaders can get valuable information from employees, including their suggestions, ideas, and complaints.
Communication should also be respectful. Being respectful ensures all employees feel safe and respected when interacting with colleagues and the management. Providing a safe environment for communication encourages employees to communicate proactively.
Proactive communication is a valuable behavioral trait for any company because it minimizes guesswork and information silos. However, lack of time can often act as a barrier to proactive communication.
When your manager has a full plate, they might not have time to keep you posted on a project's status — they might just send a weekly email to brief the team.
That’s where an async communication tool like Loom helps. Loom lets you record a message on your own time and share it with the team within minutes. The team can view your message at a convenient time, allowing them to absorb the content well — no Slack-splaining needed.
When needed, teammates can ask for more information or clarification or respond to the video with a comment.
How to transform your organizational culture?
Transforming organizational culture requires consistent efforts over a long period. Below, we walk you through the process of transforming corporate culture, but you may want to tweak these steps depending on your case:
Step 1: Get a sense of your current culture
Understanding your current organizational culture better and identifying cultural challenges gives you a starting point to work with.
Talk to employees at the bottom of the organizational hierarchy to understand your culture better. A few ways to obtain employees’ perspectives about organizational culture include:
A meeting with teams or departments
Learn what team members think your organization’s core values are, and how those values factor into leadership, decision making, employee engagement––even onboarding! A strong organizational culture permeates through departments and processes.
Step 2: Define desired behaviors
Once you’ve understood your current culture, you need a roadmap to your desired culture.
The roadmap involves defining behavioral traits that will take your company culture to that desired state. Here are a few example questions to help you determine desirable behavioral traits:
What behaviors do we need to encourage to achieve the desired cultural transformation?
How can we encourage those behaviors?
What behaviors should we discourage so they don’t act as barriers to our transformation efforts?
Step 3: Get employee buy-in
Employee buy-in significantly impacts your transformation efforts’ success.
Just communicating desired behaviors isn’t enough — it’s possible for employees to know what’s desirable, and still lose focus because of other factors.
For example, your support team knows customer satisfaction is vital for business. But factors like revenue targets might adversely impact customer experience, especially when incentives are tied to revenue.
Getting employees emotionally invested in the company’s cultural transformation goals is tricky, but possible.
Explaining the importance of cultural transformation goals to employees is a good starting point. You can also invite ideas from employees to encourage them to participate in the cultural transformation exercise.
Getting employee buy-in is the most difficult step in the process. However, you must be patient with your team as they adjust — change is hard even for your best employees.
Step 4: Ensure management is on the same page
Cultural transformation is a massive change, which is why it’s important to use a uniform implementation approach across the company.
For example, say you’ve allowed department leaders to choose their approach to implementing a cultural change. All leaders use a different approach, which means chaos when the time comes to measure progress. It can also lead to reluctance if an employee agrees more with another leader’s approach.
A consistent approach helps eliminate these issues in a process that’s complicated to begin with. Management must agree on a single approach to implementing a change and establish accountability for implantation before starting the process.
Step 5: Track your goals
The last step is to measure the results and optimize your strategy. You can measure results by looking at the following:
Behaviors: How many desirable behaviors do you see in your employees?
Outcomes: You can tie cultural changes to quantifiable outcomes and measure them. For example, if your aim is to build a customer-centric culture, you can look at customer retention rates as a proxy for tracking the success of your cultural transformation efforts.
Here are a few specific questions you might want to answer after you’ve measured the results:
How far is your strategy successful? Are there better ways to achieve desired results faster?
If the strategy hasn’t been successful, why not? What should you do differently?
Be prepared for cultural transformation
Cultural transformation is complex and requires consistent efforts. However, it can have a major impact on your company’s future. The time and energy you spend on cultural transformation will benefit the company’s brand and bottom line for decades.
Deploying the right set of tools can make the process easier, though. For example, you’ll need to collaborate with various departments and employees during the transformation process. While you might not have time for regular one-on-one meetings, you can use a tool like Loom.
With Loom, you can align with teams via video. The recorded videos allow asynchronous communication, so you never have to waste time in meetings. Try Loom for efficient communication and make your cultural transformation journey more manageable.