Organizational culture. It’s a term we’ve all heard and most likely used ourselves. However, when it comes to defining the term, organizational culture is a bit elusive and can prove difficult to define as everyone seems to have their own definition. Some will argue, “It’s just the way we’ve always done things.” Or, “It’s what makes our company unique.” While these general responses may be true, they don’t provide much insight as to how things operate within an organization. The only generalizations about culture that go without question are that it does exist, and it plays a critical role in the way organizations operate.
So, what is it?
Throughout our lives, we’re constantly learning new concepts and adapting to new societal norms. If we don’t understand something, we have the power to quickly Google, find an answer and move forward. We look for quick ways to learn and simple ways to understand. More often than not however, we run into certain concepts that can only be understood by doing, defining or visibly seeing. We create systems to help us operationalize and live.
Since culture does not have one specific definition and looks different depending on the organization, it is a perfect example of this second scenario. To fully understand culture, whether good or toxic, we need to see it, touch it and live it. It is also one of the reasons why many people are unable to completely grasp culture as a concept, clearly define it and see the importance behind it, often resulting in ignoring it all together.
Think of culture like the framework or structure of a building. You can have fun decorations all over the walls, the coolest lights hanging from the ceiling or the most comfortable seating inside, but if the structure is not strong, the building will collapse, and all of those nice things inside will be lost.
Regardless of size, culture has the ability to make or break an organization. Over time, things inevitably change, and organizations have to adapt. Change is a necessary part of the business cycle and often yields success. This cycle is slightly different when it comes to culture though. Of course, if your culture is outdated or problematic, action should be taken to rebuild and reset the organizational structure. With the changing environment, culture should essentially evolve with the company. But, one thing to consider is that if culture is done well and built on strong values and systems, it is a competitive advantage, and becomes difficult to replicate or replace. Organizations with great cultures see greater success because they have the ability to adapt quickly to change.
Why does it matter?
If you were to ask employees in different organizations to define their culture, odds are you’ll get a different response from each person. Some will say it’s the ping pong tables or the beer keg. Others may answer it’s the annual holiday party or summer picnic. Culture is more than the perks and this discrepancy in responses is reason enough to care about making sure everyone is on the same page. At its core, culture is embedded in an organization’s core values. This doesn’t mean you need to have your core values painted on all of the walls, but they should be clear, understood and practiced as guidelines throughout the organization.
Without a clear definition or understanding of an organization’s core values, there is no anchor on how to diagnose issues, solve problems, make decisions or maintain success. Every decision that is made should be based in core values. If strong core values don’t exist, then a strong culture doesn’t exist, and it would be difficult to develop policies and systems that increase employee engagement, develop a positive employer reputation and even result in business growth. From a broad perspective, great organizational culture and job satisfaction among employees are closely linked. If you find that you are unhappy or unmotivated in your job, think about the culture of the organization. How do you align with the organizational core values? Taking an honest look at how much of an impact culture has (either positive or negative) on an individual level and for the organization as a whole, is a good place to start. After all, you will only be as good as the culture you are working for.
Why should you care?
Creating a great culture is not something that will happen overnight. It takes time and a sustained effort. For many leaders, the reward is in the results, and once results are seen, the possibilities are endless. Below are a few statistics on why culture is so important and how it can impact an organization:
• Low-level engagement within companies results in a 33% decrease in operating income and an 11% decrease in earnings growth, whereas companies with high-level engagement have a 19% increase in operating income and a 28% increase in earnings growth.
• Employees’ overall ratings of their company’s qualities — like collaboration, work environment, and mission and value alignment — are 20% higher at companies with strong cultures. These qualities help winning cultures keep employees aligned and motivated.
There are plenty of reasons why creating and maintaining a great culture is critical to the success of an organization. It should serve as the foundation and play a role in the company every single day. If you are unsure where to start or don’t know how to define your culture, there are a few things you can do now. Look within your organization to discover what values you want representing the business. Figure out what aspects are important for both the organization and your employees. Ensure everyone is on the same page. When you begin with a solid foundation, results are seen, growth of the business is tangible, and the positive impacts become the greatest rewards.