Organisational Culture: A Guide From The Expertson 10 February 2021
Some people talk about organisational culture as an ethereal concept. They know it exists, but believe it isn’t tangible enough to have any significant impact on their daily work life or the company’s success.
That simply isn’t true.
Organisational culture plays a critical part in how employees interact with one another and how well the company performs. While there are many different types of cultures, recent years have seen experts recommending establishing an inclusive organisational culture. Deloitte’s 2020 Global Human Capital Trends Report notes that companies that establish an inclusive culture are:
- Twice as likely to meet or exceed financial targets.
- Three times as likely to be high-performing.
- Six times as likely to be innovative and agile.
- Eight times as likely to achieve better business outcomes.
What is organisational culture?
Organisational culture is more than just a concept—it’s the collection of values, beliefs, behaviors, policies, and reward systems that influence workforce members’ behavior while working.
Think back to when you joined your current company. You probably asked a coworker—or at least wondered to yourself: How do things work around here?Essentially, what you were trying to gauge was the company’s organisational culture.
There are different types of organisational cultures. Some are cutthroat in nature, where employees are conditioned to believe you must do everything in your power to climb to the top, even if it means hurting others to get there. On the other end of the spectrum are cultures that foster qualities such as respect, openness, and collaboration.
Further, certain business factors will impact organisational culture. For example, a 100% remote company will likely have a very different culture than one that doesn’t allow any remote work. Why? Because today, an increasing amount of business is being conducted digitally. It stands to reason, then, that a company that doesn’t permit remote work is holding onto a more analog or traditional culture.
Similarly, the culture at a large bank could differ from that at a grocery store simply because of the industry; finance has a reputation for being formal and traditional, whereas the retail grocery industry does not.
It’s clear that organisational culture can be complex, which is why we’ve created an entire guide on the subject. The chapters below walk through several key aspects of organisational culture, including its importance, how to measure it, how to develop it within a company, and relevant tools that support it. Each chapter includes insights from experts in the field—including a Ph.D.—and business leaders from varied industries.
Table of Contents
Chapter 1: The Importance Of Organisational Culture
While the Deloitte report certainly showcased a valuable quantitative perspective regarding culture, there’s also a qualitative view to consider.
Rolf Bax, chief human resources officer at Resume.io, says organisational culture is immensely important and can make or break the success of a company. “Take Enron for example. A top-down culture of coercion and corruption eventually permeated the entire organisation, and was responsible for one of the biggest corporate disgraces of the 21st century.”
In contrast, Bax notes that an organisation with a culture of support, gratitude, and goodwill produces employees who want to do their best for the company and stay long term.
Attison Barnes, former culture consultant to Fortune 500 companies and current co-founder of Captain Experiences, says it’s important to understand how culture is molded. He explains that the crux of culture is the combination of individual attitudes that together give the company a certain feel.
“The people who shape organisational culture the most are those who have the most touchpoints with other people,” Barnes explains. “This is not necessarily the CEO or other leaders—it’s usually those who have the most connections and the biggest social network across the organisation.”
Ingrid Bredenberg, strategic consultant and leadership coach at Bredenberg Associates, adds that building a strong organisational culture can result in greater trust among your workforce. “Culture can be shaped and evolved by leading in the right manner and instituting appropriate policies. If leaders are willing to do the hard work of continually aligning the culture to a greater purpose, and building systems of transparency and accountability, then they can instill trust across the organisation.”
With that trust, Bredenberg says leaders can make better decisions, more readily identify and address organisational issues, and quickly take advantage of market opportunities.
Organisational Culture & Internal Communication
According to Bax, internal communication plays an important role in the creation of prosocial organisational cultures because the way people speak, write, and exchange information with one another informs how relationships are built, and influences employees' willingness to share, collaborate, and engage within the company. “Internal communication is responsible for establishing norms and values surrounding aspects like integrity, conscientiousness, and corporate social responsibility. In short, communication creates culture.”
Bredenberg adds that company culture is strengthened by clear, consistent, relevant communication. Further, that communication must follow a strategic communication plan, and provide clear outcomes of any desired actions you want employees to take.
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Chapter 2: 5 Ways To Measure Organisational Culture
While culture may not be tangible, there are a few methods for measuring it. Below are several objective and subjective ways to get a sense of your organisational culture. These methods work whether you want a pulse check on your current culture before making changes, or want to see whether your organisational change efforts are hitting the mark.
1. Employee Surveys
“Employee surveys offer a fairly objective way to gauge organisational culture,” says David Chaudron, Ph.D., a 30-year veteran of change management and strategic planning, and managing director of Organized Change. He holds a master’s and doctorate degree in industrial and organisational psychology, and has consulted with corporations on strategy and culture across industries and around the world.
Dr. Chaudron notes that these surveys give you the opportunity to ask employees important questions, enabling them to have a voice. The exact questions you ask will depend on the characteristics of your company’s organisational culture (and what you are striving for), but here are a few examples:
- How well is teamwork/collaboration occurring in your department?
- How well does management listen to your concerns?
- Do you believe the right systems are in place to promote company goals?
- Do you feel there is consistency between company strategy and management behavior?
These questions are great for getting a bird’s-eye view of culture, but you can also take a different approach. If you believe there is a specific issue at play within your culture, you can add or adjust questions to root it out. For example, assume you suspect an issue around management behavior not aligning with your desired culture. You can ask leading questions like these:
- How strongly do you believe senior management acts in accordance with company goals?
- How strongly do you believe your direct manager acts in accordance with company goals?
Whatever approach you take to your employee survey, Dr. Chaudron recommends administering the survey multiple times and tracking responses over time. “You want to determine whether there is statistical significance in the results. This will help you home in on whether there are issues present in your culture and their severity.”
2. Retention Rate
“Looking at whether employees are staying or going is a very useful gauge of your organisational culture,” says Robert Ordever, managing director of O.C. Tanner.“If your workforce is running for the hills, it’s clear you have a culture problem.”
Retention issues may have multiple causes, but Ordever notes that culture is typically the biggest one. Whether it’s a downright toxic work environment or one that simply hasn’t evolved with the times, a negative company culture can result in its best and brightest talent heading for the door. Over time, this can result in the loss of the company’s competitive edge and declining performance.
3. Undesirable Workforce Indicators
Dr. Chaudron says you can also look at various aspects surrounding your workforce to measure organisational culture—these “indicators” can give you a unique perspective and help you identify areas of concern. Examples include:
- Answers to voluntary turnover questions (such as in an exit interview)
- Updates to employees’ LinkedIn profiles
- Amount of involuntary turnover
- Number of sexual harassment claims within the company
- Number of job searches on union websites
- Number of demonstrations outside of company buildings
- Number of strikes/work stoppages
Some indicators may be more relevant than others depending on your business and current culture. Be sure to assess and prioritise indicators accordingly before making any decisions based on your gathered data.
4. Anecdotal Stories
Dr. Chaudron says it’s important to pay attention to the stories employees are sharing about management, one another, and their work experiences. There are oftentimes culture-defining cues in what they say. This practice of listening is especially important when you make efforts to change your organisational culture.
“You can make announcements about culture changes, but inconsistencies in practicing the new culture are quickly shared throughout the organisation,” says Dr. Chaudron. “As anecdotes of inconsistent behavior make their way through departments and work teams, employees will view the announced changes as superficial—people are simply maintaining the status quo.”
Consider this example: Dr. Chaudron helped a company administer an employee survey. The top issue identified in survey responses was fairness in promotions and rewards. Leadership put together a design team made up of elected representatives from across the organisation that then developed new processes for performance appraisal and promotions.
After the processes were implemented, senior leaders discovered that one manager was refusing to follow the new processes. They gave him the opportunity to explain his reasoning, but they also ended the discussion frankly: “This is the way we do things now. If you want to keep your job, find a way to make it work.”
Needless to say, the manager in question adopted the new processes with his team. But the story surrounding this encounter quickly made the rounds among employees. In keeping tabs of these stories, senior leadership was able to measure their culture changes—managers who previously took a similar stance of noncompliance adjusted their management approach to reflect the new culture.
5. Gut Feel
“Sometimes you just have to gauge culture with your gut,” says Ordever. “When you interact with your workforce—from line workers to managers—how does it feel? How do the interactions between employees feel? Do people seem to be on edge when you’re around, or are they comfortable?”
These are just a few questions Ordever recommends you ask yourself as you go about your daily routine. Your day-to-day interactions can reveal a lot about the work environment. “Just be extra observant at times when you engage with employees. You never know what you may realise when you’re paying close attention to nuances like body language.”
Chapter 3: How To Develop Organisational Culture
If you’re considering making changes to your culture, it’s important to take a measured approach. Here are a few steps to get you started on your culture journey.
1. Define the purpose of your business.
“Culture needs to reflect the purpose of your business; otherwise, there will be a disconnect,” Ordever explains. Beyond selling products or services, your business has a greater purpose—a deeper reason for existing. “Is it to connect people together? Foster a sense of community? Help people thrive at work? Answer the question of purpose, and then build your culture from there.”
2. Formulate a clear picture of the current characteristics of organisational culture.
Knowing your destination is important. But figuring out how to get there requires knowing where you are currently. This concept is applicable to culture. You have to know what kind of culture you have now to determine the best path to the culture you want.
You can use methods like employee surveys and in-depth interviews to gather data and inform your culture change efforts. Then it’s a matter of planning around what you’ve learned. However, Dr. Chaudron advises to first verify any culture issues you identify in your research and assessment efforts.
“I had a CEO client who believed his company had a culture problem with employees,” Dr. Chaudron shares. “But an employee survey identified no issues. It turned out there was a disagreement among senior management on company strategy that gave the CEO the impression of a larger culture problem.”
3. Mold your culture according to the business purpose and current culture state.
Once you have a clear purpose, Ordever says you’ll have an easier time crafting your culture. Below are a few questions he recommends considering. Keep the business purpose and current culture state in mind when answering.
- What are desirable employee behaviors you want to see? How does your culture appreciate and recognise those behaviors—ones that are driving you toward your purpose? For example, some cultures appreciate hard work while others recognise innovation, client care, great collaboration, or improved efficiency.
- What kind of leadership will help cultivate the culture? For example, perhaps you want to want to move away from a “dictate and command” leadership style and move into collaboration and mentorship.
- What kind of opportunities will you make available for your workforce to learn and grow? This could be promotions, interesting project work, and so on. “You should provide multiple ways for employees to make a difference and feel empowered,” Ordever explains.
- How will your culture share successes/wins? You may choose to announce it company-wide, throw parties, or simply send a quick email or instant message.
- How will your culture support your employees’ financial, physical, and mental wellbeing? “Keep in mind that culture isn’t just about keeping employees happy. It’s ultimately about getting better business results,” says Ordever.
4. Ensure your internal communications further your culture.
Barnes says clear communication from the top is critical when developing your organisational culture, especially when it comes to mid- and lower-level managers. Employees have significantly more touch points with their direct managers than upper management. A line worker may only interact with a company leader once per week, while they converse with their direct manager 100+ times.
“The way to shift culture for the better is to engage managers at multiple levels so as to promote the right message and culture to the bulk of your workforce,” Barnes explains.
5. Lead by example.
Ordever says once you’ve decided on the new culture, practice what you preach from the top down. In his experience, he’s often seen a gap between company rhetoric and what leaders actually do day to day. “This is where most companies get lost and lose their culture. Leaders need to display what they want to see from their workforce. Employees are always judging leadership and taking cues accordingly.”
For example, if your culture is meant to be customer-centric, your strategic decisions should always consider the customer first. This consideration trickles down to employees in their daily decisions. “If employees don’t see leaders putting the customer first, they won’t either,” Ordever explains.
Chapter 4: 6 Tools To Support Organisational Culture
Once you’ve got your culture efforts underway, you’re going to need to support it with technology. Below are several tools experts recommend for keeping your culture on the path to success.
CultureIQ aims to help companies identify, assess, and create unique organisational cultures. You can administer in-depth employee surveys, and the tool will interpret the results. Even with open-ended feedback, the platform can use natural language processing to extract key themes and employee sentiment associated with different topics. “CultureIQ allows you to monitor the success of your company culture and plan for continuous improvement,” says Rameez Usmani, marketing director at ProfitGuru.
Slido is a Q&A and polling platform that enables your audience to be part of the discussion. Bruce Hogan, CEO of SoftwarePundit, recommends Slido for use in meetings or company events. He’s even used it as part of “ask me anything” (AMA) sessions with leadership, where employees could submit questions before the sessions and upvote their favorite ones. Leaders would then address the most upvoted questions in a prioritised manner. “Slido really helps employees feel involved with the company and leadership, which has a big impact on organisational culture.”
Cezanne is an HR management suite that includes features for payroll, time tracking, recruitment, onboarding, absence management, and more. Holly Zorbas, assistant editor at CreditDonkey, recommends Cezanne because HR is an essential aspect of company culture. “Every HR professional knows good organisational culture requires employees to be able to learn and grow, and be supported by clear HR practices. Cezanne’s feature set makes these things possible.”
Slack is a messenger tool that enables you to chat with others throughout your organisation. Samantha Moss, editor at Romantific, recommends this solution because it has features that support culture. “One way you can use Slack for improving your company’s culture is by fostering different communities through its channels feature. Employees have varied interests outside of work, and having channels that speak to those interests can help people connect within the company.”
15Five classifies itself as continuous performance management software. Michelle Devani, founder of lovedevani, recommends 15Five because it helps you get feedback from employees quickly and in automated fashion. “The weekly check-in feature is useful for staying on top of employees’ thoughts and feelings. This way, you’ll be able to continually gauge how your organisational culture is shaping up.”
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Organisational culture is a critical part of your business, even if you can’t necessarily see or touch it. Culture influences not only employee behaviors, but also impacts the bottom line. Use the above guidance to ensure your culture, employees, and overall business are on track for success.