The Importance of Company Culture: What Is It and How Do You Create It?

There are many reasons why employees choose to take the jobs they do beyond just claiming a paycheck. People work for some companies based on their values or the workplace environment.

According to research by Deloitte, only 48 percent of millennials think companies behave ethically. Those businesses that do become more attractive as a place to work, offering better environments and development opportunities.

These values and priorities contribute to a perception of the company’s culture. It can make all the difference in an employee enjoying their job and investing more effort in their work.

The importance of company culture also emerges through the reasons why clients hire one company over an equally capable rival.

But what is company culture and how do you create it? Read on to learn more.

What Is Company Culture?

You can consider the culture of a company to be much like its personality. And like personality, some people will get on very well and others won’t.

Company cultures vary, with some businesses preferring a team environment. These workplaces expect everyone to get involved in whatever the business is doing.

Others use a more formal style, with clear boundaries between staff and managers. The culture revolves around professionalism and achievement.

It’s often not officially defined in writing. Culture tends to emerge through the way a company treats staff and clients. Checking your company reviews on a site like Glassdoor can help reveal how your employees perceive your existing culture.

What’s the Importance of Company Culture?

Earlier, we compared a company’s culture to its personality. And just like a personality, people can feel like they are or aren’t compatible with the values of the company.

But it also comes from finding compatibility between working styles. Employees who prefer working alone won’t flourish in a company that offers open plan offices and team-working.

Employees who are compatible with the culture are more likely to enjoy working there. That improves productivity and builds strong relationships between colleagues. Those better relationships lead to more innovative work.

Companies whose employees are incompatible with the culture risk seeing a rise in ‘presenteeism’. This is where employees are physically present, but disengaged from their work. Presenteeism is estimated to cost businesses more than $150 billion a year.

Culture also helps with employee retention, even if an employee needs to relocate. They’re more likely to transfer within your company than leave altogether. Check out this article if you want to add a relocation program to your company culture.

How Do You Create a Company Culture?

A great way to create a culture is to look at existing examples. How do successful business leaders build their company culture?

Work out how the way they operate contributes to the overall culture. Then identify how you can incorporate these practices in your own business.

Let’s look at the steps you can take to create a new culture in your company.

1. Go Back to Basics

New businesses have the luxury of forming their culture as they grow. That doesn’t mean established businesses can’t rewrite their company culture.

Start by defining your company’s values. What is your mission? Identify what your ‘why’ is. Involve your employees in the process to give them a stake in the new culture.

Determine what sort of company you want to be. Are innovation and creativity important? Do you want a strong work-life balance for employees?

Some companies use a hot-desking approach to office design. This lets colleagues meet co-workers they might not otherwise encounter every day. By discussing their work, new opportunities for problem-solving arise.

Whatever you do, keep your values clear and understandable. They need to resonate with employees before a culture emerges.

2. Use These Values Every Day

Once you’ve defined them, start using your values on a daily basis. They become your benchmark for all decision-making within the company. Values risk becoming a paper-based exercise unless they inform business practice.

This also means you can hand over more responsibility for decision-making to your staff. If an opportunity doesn’t align with your values? They can feel confident in turning it down.

Bringing your company into line with your values may require changes to how you operate.

Perhaps one of your values is to be transparent with employees. Set up a weekly news email to keep them up to date with organizational changes. Or stop having ‘closed door’ meetings.

3. Trust Your Staff

Employees hate being micro-managed. Trusting them to do what you hired them to do is a great way to make them feel valued.

Look at a company like Swedish advertising agency Forsman & Bodenfors. They don’t operate like other agencies. Without creative directors to oversee project work, everyone becomes a creative director.

That means employees need to get comfortable asking for and giving feedback to the whole team. And by giving responsibility for large accounts to new hires, it also shows how much the agency values its staff.

This kind of trust and responsibility is a great way to improve employee retention.

4. Regularly Revisit Your Company Culture

While your culture is getting established, it’s important to reflect on your progress. Conduct surveys with your staff to get their feedback on any changes you’ve made.

Keep evaluating how well your daily operations align with your values. This can be a great opportunity to discover what additional training your employees need.

Evaluate the skills of people applying to work with you. If you’re getting your culture right, you’ll attract a higher caliber of candidate.

And revisit your employee retention rate. If your culture is improving, fewer staff should be leaving.

Cultures take time to grow so you can make tweaks along the way.

Company Culture Defines Your Success

The importance of company culture can’t be understated if you want to win the biggest clients and keep the best employees. It’s also something that you can create or rebuild if your current culture isn’t working.

Start with your values and build from there.

Want to improve your company and its performance? Check out our other business articles and learn more.

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Melissa Thompson

Melissa is a mother of 2, lives in Utah, and writes for a multitude of sites. She is currently the EIC of and writes about health, wellness, and business topics.