What Makes a Successful Company Culture? Definition & Examples

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Do you ever think about how your employees interact and work together? Do they share the same beliefs and values? These small things make up a company's culture and can have a big impact on your bottom line. As a leader, it's important to create a successful company culture that drives employee engagement.

TL;DR (Too Long; Didn't Read)

A successful company culture is defined by strong core values and beliefs that inspire employees to do their best. Organizations with great workplace cultures are responsive to the needs of their employees, invest in their professional development and foster a sense of community in the workplace.

What Is Company Culture?

Company culture, or corporate culture, encompasses the core values, beliefs and behaviors that guide everyone in an organization. To put it simply, it's what defines the work environment. Think of it as the character and personality of your company. It has a direct impact on employee morale and productivity as well as on a company's ability to attract and retain talent.

This term has different meanings for different business leaders. While everyone agrees that company culture exists and influences results from top to bottom, there is little consensus on what it involves. Organizational culture isn't something you can see or touch, but it is present in the behaviors, attitudes and actions of the leaders and team members of an organization. Many times, it's what makes people decide to join or leave a team.

A company's culture cannot be copied, but you can learn by example. Popular brands like Zappos, Twitter, Google and Squarespace are praised by employees, and that is largely due to their strong cultures. More than half of executives say that corporate culture influences profitability, productivity, business growth and other aspects of organizational success. About 90% believe that improving the culture of a company would increase its value.

Think about the way your employees feel about their work. Consider their values, expectations and beliefs as well and then reflect on your company's mission and goals. All of these traits represent the culture of an organization. A positive culture drives innovation, employee engagement and work performance, while a poor one can lead to workplace conflicts, diminished productivity, high turnover and loss of revenue.

Components of Great Company Culture

One size doesn't fit all when it comes to corporate culture because each organization has a personality of its own. For example, some companies have a more traditional culture with a clear hierarchy and core company values that haven't changed in decades. Others are focused on innovation and get their employees involved in every decision. The best way to define corporate culture is to understand its key elements:

  • Core values
  • Clear mission
  • Communication
  • Consistency
  • Commitment to learning
  • Camaraderie
  • Traits and skills of leaders
  • Company's story, routines and traditions
  • Workplace environment
  • Behaviors and attitudes
  • Rules and guidelines
  • Teamwork

Generally, people are the most important component of a company's culture. The way they interact, work and support each other has a direct impact on the business as a whole. As a leader, you want to build a sense of community within your organization and surround yourself with people who share similar core values and beliefs. While it's true that employees have distinct personalities, they should embrace these differences and work together toward a common vision.

Organizational culture is also shaped by external factors, such as international trade, economic trends and national traditions. It may also change as a company grows. Location can shape corporate culture as well — think about Silicon Valley, which is home to hundreds of technology companies focused on innovation. A culture may be rooted in core beliefs and values, but it also changes and evolves.

Brands With an Amazing Culture

Perhaps one of the best examples of great company culture is Zappos. The company's core values are a way of life. Employees are expected to be humble, passionate and determined, to embrace and drive change, to work together as a team, to pursue growth and to think outside the box. Zappos strives to create an environment in which employees can have fun, take pride in their work and grow professionally.

Freedom and responsibility define the corporate culture at Netflix. Employees are encouraged to pursue their dreams, take initiative and strive for excellence. They are candid with each other, share information openly and make decisions on their own. Furthermore, Netflix expects its staff to learn quickly, contribute outside of their specialty and think outside the box.

Another brand known for its positive culture is Twitter. The company has a globally diverse workforce with varied interests and perspectives. The work environment is team oriented, so employees are expected to collaborate and support each other. Unlimited vacations, yoga classes and free meals are just a few of the perks of working for Twitter.

Signs of Bad Corporate Culture

Some organizations have made headlines for their negative workplaces and toxic culture. Take Amazon, for instance. According to the New York Times, its culture is questionable at the very least — employees are encouraged to sabotage each other, work until late at night and give up their personal lives. Workers with health problems are often edged out or evaluated unfairly for not being able to meet the company's standards and prioritize work over everything else.

Considering these facts, it's fair to say that Amazon's corporate culture is not for everyone. It may be a good choice for those who love a fast-paced, results-driven environment but not for someone who is looking for work/life balance. Another example is Forever 21. The company is notorious for its strict policies and has been sued by its own employees more than once.

Identifying a bad company culture isn't easy, though. In general, organizations with a poor culture have high turnover rates, disengaged employees and a tendency to focus solely on the bottom line. Office gossip, conflicts, unfriendly competition and micromanagement are common red flags. Many times, employees are treated as numbers and stick with the company for the perks and not because they believe in its mission and values.

A toxic corporate culture can negatively affect the workplace and kill your company's future. Happy employees work harder, collaborate better and have a sense of purpose. They go back and forth to help the company achieve its goals and pay more attention to customers' needs. If your people are often late or absent, work on the weekends or tear each other apart, then it might be time to change your corporate culture.

Identify Your Company's Culture

As a startup or small business, you may not have a true corporate culture yet. That's perfectly fine — fostering a positive company culture doesn't happen overnight. Start by defining the work environment in your organization. Do you prefer a fast-paced office that promotes healthy competition or a laid-back environment?

Consider your management style and business objectives as well as your company's mission. Think about why you started the business in the first place. What motivated you to take this step? Ask yourself the following questions:

  • Why does your company do what it does?

  • What are your core principles and beliefs?

  • Where do you see your business in five or 10 years from now?

  • What does your company's culture look like right now? Is there anything you would change?

  • How important is professional development in your organization?

What motivates your employees to show up or work? High wages, free snacks and other perks will carry you for a while, but you need more than that to retain talent and keep your staff engaged.

Fine-tune your hiring process to ensure you're bringing in employees who align with your values. The early hires you make will have the biggest impact on your company's culture. Therefore, it's important to surround yourself with the right people from the start. Design job interviews that tackle all areas, including skills, experience, hobbies, work philosophy and more so that you gain a better understanding of each candidate.

Look for potential candidates who can bring new skill sets, opinions and perspectives to your team. Don't just hire people who think or act like you and your team. Hiring for cultural fit doesn't mean dismissing personal values but choosing people who share your company’s vision and core beliefs. Seek ways to constantly reinforce your core values and keep improving as your business grows.

Avoid These Common Mistakes

Your company's culture won't appeal to everyone no matter how great it is. In fact, if you try to please everyone, you may end up losing your identity. Instead, focus on creating the type of workplace in which you'd like to be a part. Be clear about what you expect from your employees and let go of those who are not a good fit.

Amazon has an intense corporate culture with strict policies. The same goes for Uber. This approach isn't necessarily wrong as long as you uphold ethical standards and treat your employees as human beings, not numbers. A positive culture doesn't necessarily translate to a laid-back, informal environment.

Also, make sure you have a list of core values to which everyone must adhere. Failure to do so may result in negative behaviors and can affect your company as a whole. Set an example and abide by the values you've set forth.

Another common mistake is putting too much emphasis on perks and benefits. These things can help you attract talent, increase employee engagement and boost job satisfaction, but once the novelty wears off, your people may lose their motivation. You need to offer more than just a great benefits package to retain talent and foster a strong company culture. Focus on cultural initiatives, incorporate constructive feedback into your processes and offer your employees opportunities for growth.

How Company Culture Drives Success

Companies spend around $4,129 for each new hire and need at least 42 days to fill a role. If you hire the wrong people, you'll end up losing time and money. For this reason and others, it's important to clearly define your company's vision and core values. A strong culture can make it easier to attract professionals who share your values and know what is expected of them.

Cultivating a great organizational culture will not only increase employee happiness, engagement and retention but also strengthen your brand. Furthermore, it positively impacts business growth and builds loyalty. For example, 13 companies that have been on Fortune's 100 Best Companies to Work For list every year since 1997 have significantly higher returns than the average organization.

More than one-third of employees would pass on the perfect job if the company culture wasn't right, according to a large-scale study conducted by Jobvite. About half of those who are married and over 40 percent of single candidates take corporate culture into account when applying for a job. These findings show that organizations with strong cultures can hire more easily, increase employee retention and generate higher revenue.