These days, company culture is a hot button topic. Mostly because it is a trendy thing to address on blogs and editorials. However, company culture is not just a discussion topic. It is not really a part of a PR routine. It is far more critical.
In essence, company culture regulates the workplace environment. What many companies miss out on is that culture is not only about playground rules. There is more to it, and it can do more for your company than it seems.
This article will explain why company culture matters and how it can be a competitive advantage? But first, let’s sort things out.
What is company culture?
Defining “company culture” is like catching a butterfly with your eyelashes. It is impossibly cool and yet doesn’t explain much in tangible terms.
Overall, the definition goes like this:
- Company culture (aka Organizational culture) is an umbrella term that covers various organizational aspects, attitudes, and behaviors established and expressed by the company and its employees.
On the other hand, you can see it in employee interaction with one another and how they make decisions.
Overall, company culture deals with the following questions:
- How should employees interact with one another? What kind of behavior is encouraged? What management style will bring the best out of them?
- How does the company’s approach to its environment? I.e., the market niche, competition, partners, customers, suppliers, contractors, etc. This aspect also includes how the company defines its business and interprets its constituencies.
Why does company culture matter?
Company culture is something of an oil that keeps every component of the company mechanism operating correctly.
On a strategic level, company culture provides a sort of mental infrastructure for establishing and maintaining its ethics, keeping employee engagement, following through with the business goals, and setting expectations.
Well-made company culture addresses the needs and values of employees.
- If there is a culture fit, workplace satisfaction is more likely to be high. Thus a better engagement and employee retention.
Organizational Culture also helps out with the social aspects as it encourages interaction. Consequently, overall productivity can be higher with more knowledge sharing simply because it is encouraged.
Thus, the direct impact of having a consistent and credible organizational culture is that the employees understand what the company expects from them and act accordingly.
- In addition to that, company culture communicates every employee’s cause and effect on the business operation, how it contributes to reaching goals, and accomplishing short-term/long-term objectives.
Types of company culture explained
There are three types of company culture:
- Social culture – that handles employees’ roles and responsibilities. It is the practical level, and it outlines who does what, why, and who is overseeing the work.
- Material culture – this one involves tools and processes that enable proper operations. It concerns with inputs and outcomes of employee interaction, their workflow needs, and requirements.
- Ideological culture – i.e., the conceptual side of things. This type includes such fundamental cultural aspects as company vision, values, beliefs, attitudes. Ideological culture determines emotional and intellectual guidelines for employees.
Also, it is crucial to differentiate several levels of Company Culture.
- There is a “current state of things” – the actual company culture expressed by management and employees.
- For example, how employees deal with one another, how they treat rookies, and whether there is a teamwork synergy.
- Then there is the so-called “vision thing.” It is a combination of things the company strives for and encourages.
- Inclusivity, diversity, and proactivity are amongst the most prominent examples.
- Then there is the “negative zone.” This one is all about things the company denounces, rejects, and overall resists.
- For example, employee toxicity, employee frustration, abuse of power, harassment, and so on.
- Then there are “zones of growth.” These zones refer to aspects of the company culture that undergo a transformation, need improvement, or overhaul.
- In one way or another, there are always zones of growth within the company culture. The question is, how critical is the need to transform a particular aspect.
How Does Company Culture Work?
Company culture is not something you can will into existence through an executive decision. Quite the contrary, it is a result of continuous and multi-layered decision-making and attitude throughout the company.
- It describes what the company is all about here and now.
- But it doesn’t define it as such because you can expressly cultivate culture and transform it.
Because of that, it is critical to understand the mechanisms that make organizational culture work.
That’s the key to making company culture mean something.
Long story short: it is “practice what you preach.”
Long story long: the mechanism of company culture looks something like this:
- Social level – i.e., the interpersonal relations, employee expectations, and responsibilities;
- Workflow level – involves management approaches, task management, time management, problem-solving, innovation, etc.;
- Conceptual level – includes realizing company vision, reaching business goals, strengthening infrastructure, mitigating negative factors.
In one way or another, each of these levels involves the following aspects:
- Commonly shared values – the throughline that enables productive interaction within an organization and fuels the transformation;
- The management style that determines formal\informal aspects of inner workings and informs the decision-making flow;
- Focus on outcomes – the delivery of tangible results, analyzing its impact, exploring its transformative potential;
- Interpersonal relations – fair treatment, tolerance, and mutual respect among employees;
- Team synergy – collaboration, constructive discussion, and establishing collective input to reaching goals;
- Attention to detail when approaching situations and solving problems, emphasizing workflow precision and task clarity;
- Focus on innovation to benefit the workflow – embracing experimentation and reasonable risk-taking to explore possibilities and discover opportunities.
Now let’s explain how company culture can be a competitive advantage.
How can company culture be a competitive advantage?
There are several ways well-defined, and fine-tuned organizational culture can help you out:
- Enabling company growth
- Organizational culture establishes an infrastructure (social, material, and ideological) that enables reaching business goals and benefits employees.
- Employee retention
- The goal is to make an environment in which employees feel appreciated and motivated to drive results.
- Employee recognition and rewards
- Clear-cut culture paves the way for perpetuating the employees’ accomplishments based on expectations and their business impact.
- Culture monitoring
- the goal is to establish a measurement system of employee satisfaction, providing regular “temperature check” regarding different issues, and overseeing the effectiveness of current organizational culture infrastructure.
- Candidate engagement
- The goal is to create the initial culture match between the company and the candidate by discovering the culture’s features through its channels (website, career page, external publications). This aspect will help with establishing an effective hiring process.
- Candidate matching
- Culture fit factor more or less guarantees that the candidate is more likely to fit into the organization and contribute to the business operation.
- Employee onboarding
- Well-defined culture outlines the immersion of the new employee into the organization and predicts possible challenges.
So how to make company culture work as a competitive advantage?
How to make company culture a competitive advantage?
Several aspects can turn company culture into a competitive advantage.
- A clear definition of organizational culture provides a roadmap of value proposition and storytelling possibilities.
- It outlines who you are as a company, workplace, employer, what you are standing for, and how you contribute to your business environment.
- The monitoring and metrics system enables measurement and inspection of what is going on within the company culture-wise.
- It will allow understanding whether employees share the same values, satisfied with their work and current standing, whether they benefit from the stated culture guidelines, or just “phone it in.”
- Culture research gathers information about needs and requirements regarding the work environment and culture from the key target audience segments. Usually, there are five key segments:
- Current employees – the goal is to explain organizational aspects in practical terms.
- New employees – this time, it is all about the onboarding and the immersion of the new employee into the work environment, introducing to other employees, explaining values, guidelines, and establishing cooperation models.
- Job seekers/candidates – in this case, the objectives are to engage with them and provide information to consider whether there is a culture fit.
- Competition – the goal is to contrast your culture and the way the competitors represent their organizational culture.
- Clients/potential clients – in this case, the goal is to represent company culture as the integral component of what makes the particular company a viable business partner/vendor, etc.
- The company culture’s marketing presentation adjusts different aspects of company culture to the points of view of the target audience segments it is aiming for.
As a result, company culture becomes a powerful tool in presenting different company aspects for different TA segments.
As you can see, company culture plays a significant role in multiple aspects of its operation. Because of that, you need to take it seriously and make it a force of stability and transformation that drives the company forward.
If you need help with defining your company culture or need assistance in getting the nuances right – our HR consultants can help you out.