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Building A Company Culture: Why It Matters

Raina Sheth
May 31, 2018

If you’ve glanced at any job descriptions lately, you’ll read at least one or two bullets that say “a culture that is fun and innovative” or “our approach to work and life defines our culture.” While indicators like these inform us that company culture is a growing factor in the workplace, I think it’s more valuable to understand why building a company culture matters and how to do so.

In order to learn more, we consulted Cultural Activist Charisse Fontes. Charisse is the CEO and People Ops Culturist Consultant at The Culture Circle, a PeopleOps service for growing startups and businesses. She has helped several companies build out their PeopleOps, perform cultural audits, and design cultural organization. She also currently serves as the Senior People Operations Manager at Imgur.

Where did company culture come from?

The concept, originally known as “corporate culture,” can be traced back to the 1980s. It was first used to describe the character of a company beyond generalized beliefs and behavior, taking into account company-wide value systems, management strategies, employee relations, and attitude.

Today, company culture is defined as the personality of a company. It’s made up of the qualities (work-life balance, company mission, goals) that make employees feel a certain way.

Company culture is not measured through perks offered, like snacks, coffee, and free lunch. Rather, it is measured by factors impacting a business’ overall performance. These factors include the level of trust amongst employees, productivity levels across teams, employee turnover and retention rates, and overall morale.

Charisse compared company culture to a tribe:

“Company culture is a tribe that operates under a business entity. A tribe does whatever it needs to survive, and those attributes, are the culture. It all comes back to the way people are led and treated.”

What can company culture do for my business?

According to Charisse, building a company culture is pivotal for a business to achieve success.

“In order for a business to achieve their ultimate goal, their people must thrive. In order to thrive, an agile environment [culture] where employees are heard, seen, witnessed, and respected is crucial. If a business doesn’t follow this model, they’ll likely fail.

Here are some of the characteristics of a positive company culture, which contribute to a business achieving their ultimate goal.

Decision-Making & Trust
A high level of trust is imperative to any positive company culture. When employers, employees, and customers don’t trust one another, decision-making is compromised. A strong level of trust at work can quickly move a company forward because each individual trusts the judgement and expertise of their colleagues. High levels of trust reduces the time it take to make and discuss key issues. It also helps employees work effectively as a team as opposed to individually.

Turnover, Productivity, & Success
Companies with a positive company culture have a 13.9% turnover rate compared to 48.4% for companies that don’t.  If an employee fits the company culture, they’re most likely to enjoy their time in the workplace. They develop strong relationships with coworkers, and are more productive. When employees are unhappy, they tend to do the bare minimum, feel less appreciated, and quit.

Did you know that unhappy employees cost American businesses up to $450 billion per year? Happy employees are more likely to go the extra mile. They are engaged, they care about the company’s overall mission, and often get tasks done quickly and efficiently without being asked to. In fact, happy workers outperform the competition by 20% and earn 1.2% more than their peers.

For businesses looking to grow, a strong company culture can assist in the recruiting process. When an employee believes in the values and mission of a company, they are more likely to refer individuals they know for open positions. And, because they already work there, they not only have insight that this person will be a good fit, but also set realistic expectations for the incoming employee. Referred employees are 23% less likely to quit than other hires. Employee referral programs help increase attachment to a company as well, and encourage employees to think about their company’s future success.

Morale is important because it affirms for employees that they are working towards a common goal with shared core values. It carries over to new hires, who feel less uncertainty in the beginning and know what is expected of them in their new role at a new company. Even in times of tight deadlines and increased financial pressures, strong morale can contribute to quicker success.

In Practice
I’ve seen these factors in play at Ease. Before I worked here, I wasn’t sure if smaller companies would have a substantial company culture. Even though we now have 80 employees, there were only 45 when I started working here. Within the first few weeks, the culture was apparent to me:

Do businesses emphasize company culture enough?

Are businesses prioritizing building a company culture? Charisse stated that while the work environment has become more agile, traits of the past are still an obstacle.

“Organizational structure remains top-heavy and male dominant, and business’ sometimes expect employees to work at the same company until they retire.”

When building a company culture, Charisse added that it’s important for leadership needs to focus on humanity, instead of perks that create a “cool” environment. Cool factors inevitably create superficial environments that have no foundational basis that is anchored on the success of employees.

Building a company culture that works.

According to Maslow’s Hierarchy of Needs, people are motivated to achieve certain needs and some needs take precedence over others. For example, a human’s most basic need is physical survival and this is the first thing that motivates their behavior. Next up is safety and a sense of belonging. At the top of the hierarchy is self-actualization, the realization or fulfillment of one’s talents.

Maslow’s Hierarchy Of Needs: 

building a company culture

Similarly, a strong company culture can be built on the self-actualization of each individual employee. In this case, self-actualization is reached once employees feel job security, a sense of belonging at their company, recognize their importance at the company, and finally, confidence in their ability to help those around them succeed. When employees are motivated to help one another succeed, businesses inch closer to achieving their ultimate goal. Allowing employees to work from home, using company wide meetings to recognize employees, open communication about company growth, or pairing a new employee with a veteran who they can reach out to for advice are all practices that help achieve self-actualization.

Charisse finds great value in the communication piece:

“For businesses looking to fast track the company culture process, I recommend starting with the value of respectful communication. If a company chooses to respectfully communicate with all of its employees, they will achieve their goals.”

Core Values
Incorporating your company’s core values and current behaviors are essential when building a company culture. You can start by reviewing common practices. Next, reinforce the ones you idolize and eliminate ones that are not productive. For example, if your senior leadership cares about work-life balance, you could alter your PTO policies or encourage employees to take a personal day each quarter.

With half of their waking hours spent at work, it’s important to show your employees that you’re invested in their success and development. This could mean open conversations about promotions and compensation, weekly meetings with the opportunity to ask leadership questions, and formal recognition programs.

Starting from Scratch
For new businesses building a company culture, Charisse recommends defining humanity and identifying how it operates within humans, whether that includes values, diversity, or inclusion. The next step would be to tie those things to how a business manages hiring, performance, and terminations.

After you know what you want your company culture to look like, it’s a good idea to implement practices that reinforce the culture. You can dedicate a portion of the interview process to determining cultural fit for you and the applicant. Activities like talking to existing employees and team outings can help new employees adapt to the culture.

How to communicate company culture. 

By 2020, millennials will be half of the working population. They value building a company culture more than any other generation that’s come before them. Therefore, it’s important to communicate your company culture and prove to applicants that it’s strong and positive.

We’ve rounded up several ways for you to get started:

  1. Respectful Communication: Charisse shared that respectful communication is the key to the culture. If you can respectfully communicate in each and every situation and interaction, it will change and influence your culture. From leaving cell phones out of the meeting room and staying present, to how you communicate difficult feedback. The more that employees witness this in action it will authentically become more embedded in all areas of your business.
  2. Leadership isn’t the culture. The culture talks when leadership isn’t around. This is why it is vital for anyone in a leadership role to first demonstrate what they’re trying to accomplish without saying it. This will gain the respect and attention of the people and the culture.
  3. Leave traces of your company culture on your website. You can include employee testimonials, images from team events, and your core mission. Not only will this help illustrate the company culture to the public, but will engage current employees.
  4. Ask the right questions in an interview to help you gauge whether the applicant will be a cultural fit. Here are some we suggest:
    1. What’s your ideal company culture?
    2. Do you prefer working independently or on a team?
    3. Describe a time when your workload was heavy and how you handled it.
    4. What do you expect from a manager?
  5. Illustrate an applicant’s career trajectory at your company. Show them how they’ll have room to grow and how they can achieve their career goals.
  6. Show off any recent accomplishments! Did you just receive a new grant or level of funding? Were you recognized in any news publications? Things like this are key in helping candidates understand the future trajectory of your company.

Final Thoughts

Building a company culture involves way more than adding a few bullets on your job description. It has the potential to help your business achieve its ultimate goal.

“Culture has been on the rise in Silicon Valley for seven to eight years. Corporate companies are now following suit. If every business begins to emphasize humanity in the workplace, it will dramatically change every single issue a company has, from diversity inclusion to women’s rights and equality,” said Charisse.  

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