Everyone is talking about organizational culture these days. But since culture is multi-faceted and “soft,” it’s easy to talk about it and not take action. We may ask, is culture really worth the effort? Are there tangible benefits in business? Based on my experience, the answer to those questions is YES. This article tells you why and offers four practical ways to strengthen your organization’s culture.
What are the benefits of a strong culture?
According to Terry Deal and Allan Kennedy, culture is “the way we do things around here.” Culture is comprised of an organization’s unique blend of values, beliefs, attitudes, routines, stories, systems, and (often unspoken) rules. A strong culture can be the glue that holds us together and the secret sauce that differentiates us in the marketplace.
Recent research makes a compelling case for building a strong organizational culture. First, companies with strong cultures are more profitable. A 2019 Return on Culture Report by Oxford Economics found that companies with strong cultures are 1.5x more likely to report average revenue growth over 15% for the past three years, and public companies with strong cultures are nearly 2.5x more likely to report significant stock price increases over the past year. And equally important: strong cultures are linked with better hiring, retention and engagement. A 2019 mission and culture survey by GlassDoor found that:
- 77% of workers consider a company’s culture before they apply
- Culture is one of the main reasons 65% of employees stay in their jobs
- Companies with a strong culture report up to 72% higher employee engagement
How can you make culture stronger?
These four steps are key:
1. Examine Your Values.
Some assume that culture will come naturally if we put up placards and talk about our values at the annual meeting, but that’s not enough. Go beyond abstract ideals to capture what your company values look like in action and how they tie into your strategic goals. Ask the following questions:
- What are our assumptions and beliefs about each value?
- How do our values support our purpose, mission and strategy?
- What behaviors and actions demonstrate our values? How will we encourage and reward these?
- What behaviors and actions do not align with our values (and therefore will not be tolerated)?
2. Achieve alignment.
Alignment is the magic bullet when it comes to culture. Leaders who straightforwardly align their values, behaviors, and strategy will create strong cultures.
To get to alignment, look within and be honest about who you are as an organization, where you are now, and where you want to go in the future. There’s no right or wrong answer. Don’t copy someone else. CrossGroup uses Kim Cameron and Robert Quinn’s Competing Values Framework to help leaders map their current and preferred future cultures. We create action steps to build a culture supported by specific behaviors, and in support of strategic goals.
3. Talk about your culture all the time.
Speak often about the desired culture and then go beyond words to prove that you mean it. You must literally live the culture and demonstrate it with all those you influence. Here are some ways to make culture come alive for your people:
- Talk about successful projects using words that describe the values and culture in action.
- When coaching employees and in performance reviews, describe behaviors that align with the culture.
- In team meetings, highlight a value every week and explore how we are living them and where we need to grow.
- Tell legendary stories that illustrate your values and culture.
4. Welcome feedback.
Meaningful dialogue between leaders and their teams can help merge your company’s purpose with values. Welcoming feedback from your employees and customers allows you to observe inconsistencies and blind spots. Address these with transparency and take action.
There is no good or bad organizational culture, but there are strong and weak cultures. A strong culture is all about living it together and course-correcting when we get off track. Leaders invite dialogue instead of just making speeches, and they set an example of mutual accountability between all members of an organization. That builds trust, and trust strengthens culture.
In Conclusion…
In a strong culture, teams set strategies and achieve goals more efficiently, businesses become more defined in their respective industries, and in the face of a crisis, leaders can make decisions more effectively. Over time, the culture will solidify and become a force that defines your organization.