Why Company Culture is the Key to Success

Why Company Culture is the Key to Success

What makes a great company culture and how can you create one for your business?

By Peter Tuvey

It’s no coincidence that some of the world’s most successful businesses are known for having a great company culture. While a number of large companies might have seen their culture erode as they have grown in size, the likes of Apple, Google and John Lewis have stuck to the same values that were first established when they were mere startups. Not only has this seen them consistently attract and retain fantastic employees, it has also delivered commercial success and worldwide recognition in equal measure.

So, what sets the cultures of these companies apart? Why is company culture so important? And how does a company create and maintain a winning culture? Before we get to answering these questions, there’s something else that needs to be established: what does company culture actually mean?

What is company culture?

There is no single definition of company culture but it can reasonably be described as the established norms and values of a business. Just like a town or country, a company can have its own traditions, habits, beliefs, attitudes and ways of doing things.

The culture of a business will generally permeate through the organisation’s staff, procedures and activities. In a traditional hierarchical structure, those on the higher rungs, such as managers and directors, tend to have more influence on setting and changing the culture. Encouraging vertical communication, scheduling regular team meetings, organizing staff social events and using open plan offices are all ways in which a manager can influence a company’s culture.

Why is company culture important?

Given that a company culture touches every aspect of the business, this means it can have a profound effect on a company’s level of success or failure.

Culture is often closely associated with employee satisfaction. A positive staff culture will improve staff retention while increasing productivity and creativity, and this will have a positive influence on the profitability of the company. On the other hand, a negative workplace culture will result in higher levels of staff turnover, unhappy customers and, ultimately, minimal to no profitability.

Company culture can also manifest itself in the way that a business communicates with its employees and external stakeholders. By fostering a culture of open communication, a business will be better able to identify and capitalize on new, innovative ideas from its workforce. Similarly, management is more likely to find out about problems and failures quickly, and take action where necessary.

What are the hallmarks of amazing company culture?

If a company’s employees are brimming with ideas and enthusiasm, if they know the CEO and feel they can contact them and if they share the company’s ideals and core principles, it’s a good sign that a business has a great company culture.

Indeed, the behaviours of employees can tell you all you need to know about a company’s culture. These include things like staying late to help out a colleague, chatting over lunch about a great new product idea or approaching management when they’ve encountered a problem, confident that they won’t be criticized or blamed.

Some of the best examples of company culture come from Silicon Valley, which in some senses has reinvented what company culture means. Google, for example, has established an open, informal product development culture where all employees are encouraged to come up with ideas, and everyone has access to the chief executive and founders. Apple also has a strong culture of innovation, but it’s reported to have achieved this through a strong culture of working hard and striving for perfection.

And, here in the UK, John Lewis is renowned for its positive company culture, which emanates from its employee ownership model and the fact that every tier of staff benefits from the same bonus structure.

How do I create a great company culture?

The most dangerous thing you can do is assume that a great company culture will develop on its own. As a business owner or manager, creating and maintaining a positive, healthy culture takes a vast amount of thought and effort.

Remember that your actions – not just your words – will set a powerful example for your employees. As the leader of the organisation, your staff will look to you for guidance and direction. If you are unsure or apathetic, this will have a substantially negative impact on your company culture. If you want your business to have an open, cooperative and helpful culture, you need to start by embodying those qualities in the way you deal with staff and clients.

Finally, and most importantly, focusing on two-way communication will help spread the culture and make employees feel part of your corporate family. While an open-plan office or open-door policy will help encourage free and open communication with management, fostering a great working environment will bring huge benefits to your culture and company as a whole.