Why is Company Culture Important For Success?
A company’s culture is one of the few things that sets it apart from others. While it’s not difficult to replicate the marketing strategies, revenue models, or even the proprietary products and services of a certain company, one can’t capture its essence in another organisation. Thus, a company’s culture can also be considered as its fingerprint, which is unique to them and thus can’t be recreated.
Noah Rabinowitz, senior partner and global head of Hay Group’s Leadership Development Practice calls a company’s culture its “X-factor”. It’s what gives it an edge and also decides how well or worse it is going to perform in the industry.
The impact of a company’s culture is not confined to the perimeter of their business facility alone. The employees have their friends and relatives with whom they go out, and social events they participate in. Thus, they might not be aware of this but they all contribute to their company’s “brand” by reflecting the values and beliefs it stands for.
Dylan Minor and Michael Housman released an interesting report (titled Toxic Workers) on how the productive and talented employees can greatly cost a company by engaging in negative behaviour that degrades the workplace culture and limits the productivity of others.
Minor and Housemen mentioned in their report how most firms focus more on finding the next “superstar” performer rather than taking measures to avoid toxic workers. This is surprising, considering that the latter can save more costs than the former. A small chart published in the report clearly explains this relationship.
Looking at the chart above, it becomes clear that an organisation can save a lot more by replacing a talented but toxic performer with an average worker, rather than replacing an average worker with a top performer.
Role of Leaders in Workplace
It is natural to assume that since leaders form only a small part of every organisation, it must be the ground-level employees or the mid-level executive workers who shape the company culture. However, this is not true.
Leaders are the public faces of every company. They are the ones making announcements to the press, giving interviews, and also operating the entire business in a distinct manner. In other words, they decide what kind of atmosphere the company should have. The employees too look up to them and often emulate them whether knowingly or unknowingly. Thus, the way the leaders handle situations, behave in social gatherings, or simply expose their personalities when they interact with others in conference meetings or even one-to-one conversations, affects the workplace culture.
Here are a few ways the leaders of today and tomorrow can create a healthy and vibrant work culture and benefit their companies:
Promoting Employee Engagement Programs: Employee engagement is a crucial part of any company’s culture. When the employees understand how they are contributing to their company’s mission, they are more likely to bring their A-game to the work and effuse a positive attitude which affects others too. In fact, it was found that companies that run employee engagement programs achieve 26% greater year-over-year increase in annual company revenue than those who don’t.
Company Branding for Recruiting Top Workers: In an Allegis Group Service Study 69% of the participants said they wouldn’t take a job in a company that had a bad reputation, even if they didn’t have an existing job! Such is the importance of a company’s reputation or brand. However, branding isn’t limited to ad campaigns or media appearances. The culture existent within the company plays a far bigger role in its reputation and popularity. Thus, leaders have to step up and establish a high-quality brand. Top performing employees want to work in a place that has a good work culture and flexible working hours.
Promoting Trust and Maintaining Transparency: An important yet often overlooked aspect of a good company culture is transparency and trust. When employees don’t have any doubts regarding how their performance is assessed, why their salaries are what they are, or don’t have to think twice before raising a concern with the HR, they know they are working in a good company, a company that has a healthy culture. In fact, in the Glassdoor U.S. Site Survey, January 2016 90% of job seekers said it’s important to work for a company that promotes transparency.
It can’t be emphasised enough how important company culture is today. Global leaders are already aware of this and taking initiatives. On the other hand, those who have decided to turn a blind eye on the issue are likely to be challenged sooner or later.