You may be wondering, "what is company culture, actually?" Well, company culture refers to the values, beliefs, and attitudes that serve as guiding principles for every member of an organization. Culture helps keep everyone on the same page, making it much easier to reach company goals and serve customers.
There’s a reason millennials say that an organization's culture is one of the most important things they consider when looking for a new job. When culture is good, employees can’t wait to show up and contribute every day. They are quick to help their colleagues and eager to come up with new ideas to make their company even stronger. Companies with great cultures treat every employee as an individual and are committed to helping each of them develop professionally.
The 6 components of a great company culture
According to the Harvard Business Review, a company's culture is made up of six components:
- Vision. What does your company’s future look like? Having an idea of where you want to be in five or ten years factors into how you navigate present-day concerns. That might mean some risk taking. Patty McCord, the creator and arbiter of Netflix’s culture, prefers looking at the company’s future in six month chunks.
- Values. What set of values does your company hold dear? Community, satisfied customers, and employee wellness might be some of the ones a good company emulates. All these elements should affect all decision making throughout the company -- otherwise, your company will be totally misaligned. When he realized how misaligned Twilio's employees were when it came to defining the company's values, Twilio CEO and co-founder Jeff Lawson worked on not only creating more distinctive values, but also breaking down the process of how a startup can create real and lasting core values.
- Practices. Talk is cheap unless it’s backed up by action. If your company says it “always puts customers first,” you actually need to put customers first. For example, Zappos prides itself on its customer service, but for good reason: a customer service agent once spent 10 hours on the phone with a single customer.
- People. Many forward-thinking organizations hire for culture fit; studies show that teams that are aligned culturally experience 30% less turnover than those that are not. For example, Arthrex, a company that makes medical devices, invests in its employees’ well-being with programs such as providing $8,000 each year for tuition reimbursement. Perks like this are likely why Arthrex boasts a 5% voluntary employee churn rate.
- Narrative. What is your company’s story? That narrative should be in your company’s DNA. If your company is all about team-building, for example, populate your Instagram page with candid shots from the team-building events you have throughout the year. Check out Hootsuite’s Instagram page to see how sharing pictures can showcase your happy team in action, making your company a more appealing place to work.
- Place.Your company’s physical space is just as important to your organizational culture as the perks. Take inspiration from Amazon’s biospheres in Seattle and nearly finished Apple Park. Mark Zuckerberg takes potential hires on a walk around the Facebook campus specifically to convince them to work for him. Build a work environment people actually want to go to every day and they’ll be excited and inspired to show up and contribute.
If you haven’t given much thoughts to these six components, you’re not alone. Most companies don’t actively work at shaping their culture; instead culture “just happens.” Basically, if you don’t proactively address company culture, you’re not forgoing it altogether -- something reactive will appear in that vacuum, and you won’t be able to control it. Company culture shapes employee motivation, and a lack of interest in your company culture will show in your employees’ work and productivity. A lack of happy employees means lower employee engagement, which will negatively effect your bottom line.
If you want your company to stay competitive, you need to create an enjoyable and supportive culture that people feel connected to.
How to build a great company culture
If you aren’t able to describe your company culture in a few quick sentences, chances are you’ve either let your culture just happen, or have let it get disorganized beyond your control. The good news is that it’s completely possible to implement a new culture—even if your organization has done things the same way for forever. Here’s how:
- Involve everyone. Everybody—from entry-level employees to the C-suite—needs to buy in to culture in order for it to work. Culture can’t just be something that HR dictates to the rest of the team, for example. New hires tend to look to their co-workers to understand their company's culture. It is therefore critical to understand that to shift your culture, you have to do something that aligns all team members. Case in point? Google’s famous “20% time” program allows employees to spend one day a week pursuing their own projects and ideas. This freedom, which is baked into Google’s culture, has brought us products like Google News and Gmail. Google has remained a dominant player in the tech space by making sure everyone its culture encourages everyone to be involved.
- Leaders need to live and breathe their culture. The easiest way for managers and executives to help get everyone on board with company culture is by leading by example. Leaders need to do the same things they expect their employees to do. Following a 2008 launch failure, SpaceX CEO Elon Musk gave an emotional speech, proclaiming how determined he was to succeed and how hard he was prepared to work to make that happen. The speech inspired his entire team to keep moving forward together. The aerospace company has had many successes since then.
- Hire for the culture you want. Once you’ve built a culture you’re proud of, the last thing you want to do is add people into the mix that don’t share the same values you do. To this end, place more emphasis on hiring folks who will add to your culture—instead of hiring them solely because of their talents. If you want a more positive culture, hire more positive people. Learning a whole new attitude is much more difficult. Uber, for example, has recently been criticized for its lack of diversity. To address the problem, Uber Chief Brand Officer Bozoma St. John recently stated that the ridesharing company needed to hire more women in order to reflect the company’s commitment to progressive values.
- Focus on the team. In strong company cultures, everybody—from the legal department to marketing to engineering to sales—works together to reach common objectives. Never forget that you are all in it together. Celebrate everyone’s contributions equally and give employees all the support you can. Lattice's praise tool encourages celebrating every time someone gets positive public praise -- which has been shown to pay dividends both in terms of team spirit and the bottom line.
Once you’ve built an awesome culture, it’ll be much easier to achieve your goals. Companies with great cultures never have trouble finding talented employees to work for them. Not only do existing staffers tell their friends about how awesome it is to work for their employer, many applicants will come your way organically because they’ll want to be a part of what you’re doing. For example, more than 2 million people apply to work at Google—a company known for a great culture—every year.
On the other hand, companies with toxic cultures have a hard time getting anything accomplished. Even the most talented workers at these companies can’t whip up the motivation needed to become fully productive. In the age of Glassdoor, it can be nearly impossible for companies with awful cultures to fill positions with talented people.
Taking your business to the next level starts with having a strong culture that inspires managers and employees alike to reach their full potential. To learn more about building a company culture, check out this video to learn how Asana built one of Silicon Valley’s leading cultures.