Why is Organizational Culture Important?

By Andrew Dittman Posted in BUSINESS

The culture of your organization is what sets your company apart from your competition. It is, in large part, your branding, and when done correctly, will attract your ideal client – and employee.

It is essential to recognize that your organization already has its own culture. The question is, is it by careful, thoughtful, intentional design, or did it form haphazardly? It matters.

Let’s start by taking a look at some of the elements that go into a company’s organizational culture.

Organizational Culture Defined

There are a great many things that work together to make up your organization’s culture, and it all begins at the top.

Ideally, you will have your company’s organizational culture defined with clear goals set in the beginning, allowing it to flow down from the top. You can adjust whenever and wherever you need so that your company can thrive and be financially successful, but the fundamental values won’t change.

There are no hard and fast rules for creating a culture within a company. And while companies will define their “perfect” organizational culture differently, depending on their core values and goals, there are some essential ingredients involved in any organizational culture:

And yet organizational culture is so much more.

What Organizational Culture Does for Your Company

From the company’s standpoint, your organizational culture defines who you are; your corporate personality, if you will. It lets your clients, customers, and employees know what to expect from you.

There is a clearly defined set of standards, morals, and expectations that you desire your employees to be comfortable participating in, right down to the hours and dress code. You may also support specific causes and ideologies.

Creating a community that is specific to your organization is critical to the success of your company, clientele, and employees.

Having a clearly defined organizational culture is essential for the following reasons:

1. Organizational Culture Clarifies Your Company’s Identity.

Having a clear and unambiguous company identity is essential to your clients and your employees. They know who you are, what you do, and what you believe in. They know what they can expect from you with no guesswork or uncertainty involved. You are a known quantity that attracts a specific type of client and a particular type of employee.

There is no doubt about your niche market, which makes marketing more cost-effective and successful. Your employees know and share your core values and beliefs. Your marketing strategies may change, but your core values and beliefs do not.

Organizational culture creates a community that is specific to your organization, which makes identifying and establishing that culture worth taking the time to get right.

2. A Clearly Defined Organizational Culture Fosters Happier Employees.

Understanding and experiencing consistency in day-to-day operations within the company provides a safe structure within which to operate, with clear direction given to the employee. Roles and responsibilities are also clear.

Having structure provides a sense of freedom, which is true even if one of the characteristics of the company’s organizational culture entails a certain lack of structure. It is a known, expected, and comfortable environment that, if they have chosen the right company, fits in with their own personal values.

Happy and content employees can only exist to the extent to which they share common goals, norms, values, and beliefs with those associated with the organization’s culture.

A clearly defined organizational culture also provides a sense of camaraderie, a feeling that they’re all in it together. Feeling part of a group of like-minded individuals and working towards a unified goal is important. It helps employees foster social connections at work, which helps reduce some of the workplace stress.

Also, employees who have friends or social connections at work typically experience greater engagement and loyalty.

3. A Strong Culture Transforms a Mere Workforce into a Powerful and Cohesive Team.

Diverse skills, perspectives, and ideas are needed in any organization. The ability to work as a team is essential to accomplish the overall objectives and goals of an organization.

Every employee operating within a strong organizational culture is an integral part of the team, and they know it. They know their input and accomplishments are recognized and valued. There is no playing favorites or jealously jockeying for position. Each team member values the success of the team over their personal ego, confident in the knowledge that their own individual contribution is as significant as everyone else’s. In no way does this negate a sense of healthy competition, it just puts it into a healthy perspective.

As a team member, employees can put the company’s goals first, making faster progress and contributing to the company’s overall success – and bottom line – in a more powerful and impactful way.

Team members experience greater satisfaction because they understand that they contribute to the overall success of the team and the business itself. The result is greater motivation, creativity, personal satisfaction, and overall success.

4. Organizational Culture Ensures That You Retain Only Your Best People.

A successfully defined, well managed organizational culture enables you to keep only your best people. When employees feel like they’re part of a like-minded community, they’re more likely to not only remain in the company but to give their best to it consistently.

Employees feel secure with a sense of trust because of shared values and goals. When the culture is clearly defined, it provides a supportive environment where every employee feels valued and cared for. They feel free to offer ideas because they know they will be heard. This environment increases employee engagement and fosters stronger relationships within the company.

On the other hand, employees who don’t quite fit in with the company’s stated goals and values and therefore won’t provide as much value, aren’t likely to feel completely comfortable and will likely leave on their own. There is a place for everyone, and companies have the right to mold theirs to reflect their desired goals, outcomes, and beliefs in the way they believe will best serve their customers.

5. A Transparent Organization Culture Assures That Two-Way Communication Is Valued.

Upper management should be living out their stated beliefs and values, as the best and most effective leadership is done by example. Part of a healthy and successful organizational culture values and practices two-way communication from the top down.

Management should clearly communicate needs, expectations, adjustments, and any changes that may be on the horizon.

Employees should feel free to express their ideas and suggestions with the company’s best interest in mind, knowing that they will be heard. All parties are open to constructive feedback. This transparency fosters trust within the organization.

An organizational culture that has developed a trusting environment is nearly always more productive, innovative, competitive, profitable, and effective. An environment of trust among staff, managers, and employees will result in an improvement of the collective performance because honest teamwork, information sharing, and problem-solving are enhanced.

6. Belief in a Company’s Organizational Culture Allows Employees to Represent the Company, In and Out of Work.

Happy, contented employees believe in the mission and values of the company and therefore, naturally represent them, in and out of work. Your employees become your brand ambassadors, and everyone wins. The company likely exists to make a difference in the world, but realistically it also needs to make money. When employees show strong support for and belief in their employers, it doesn’t go unnoticed.

This loyalty speaks volumes to the watching world. Of course, this assumes that management is living up to the company’s stated values and beliefs and not being hypocritical. Saying one thing and doing another doesn’t work in parenting or in business.

Loyal employees who believe in their company’s organizational culture ensure company growth, customer satisfaction, employee satisfaction, and an increase in the bottom line.

7. An Established Organizational Structure Makes the Hiring Process Easier.

Having a clearly defined and well-established organizational culture makes the hiring process easier, saving the company time and resources.

And if they are smart, they will not stop there. Employees will also want to know what the company culture, or atmosphere, is like. What will it feel like to work there? What will they experience?

Loyal employees who believe in their company’s organizational culture ensure company growth, customer satisfaction, employee satisfaction, and an increase in the bottom line.

As mentioned earlier, if someone is not a good fit and is not contributing appropriately, they will likely make it easier for management to let them go as they know it is not a good fit for either of them.