Every company has a culture, whether they like it or not.
For most small businesses, the company culture stems from the founders of the business. This is common due to most start-ups, or mom’s and pop’s type operations, employing mostly close friends and family, or friends of family, in the early stages of the business. These folk, hired from the same circle, form a culture that mimics those influential early employees. This culture is usually positive and everyone is full of promise for the future.
To be clear, company culture can take on many forms. A culture of innovation could be what drives a start-up forward, or a culture of professionalism for a law firm, or a high-energy culture for a young digital agency. And, there are bad culture’s like a patriarchal culture, or cultures that are too-highly driven to the extent of being unhealthy, or a culture of mediocrity. There are certainly different cultures across different industries, for example, across the motor-repair industry, there will tend to be similar cultures to others in the industry. Similarly, the culture at places of higher education, will have elements in common with other education establishments.
When a positive culture is nurtured and embraced within an organisation, when it forms part of their DNA, there is little doubt of the immense benefits it can deliver. Actively working at, and maintaining, a great company culture, breeds a sense of purpose into employees, where they feel engaged, and that their contribution is valuable to the organisation. Besides having more engaged, happy, inspired and effective employees, research shows absenteeism declines in companies that display a positive culture. Productivity among disengaged employees in the United States costs companies $300 Billion a year.
According to professors Edward Deci and Richard Ryan from the University of Rochester, there are six main reasonswhy people work. The study has been updated by Lindsay McGregor and Neel Doshi for a more modern workplace as outlined in an HBR article titled How Company Culture Shapes Employee Motivation.
The first three have a positive effect on company culture:
- Play – This happens when you have fun doing what you do. You find joy in every aspect and motivation comes from doing the work itself.
- Purpose – When the work strikes a chord with your own identity and is fulfilling.
- Potential – When the work enhances your marketability for the future.
The other three negatively affect company culture:
- Emotional pressure – The fear of failure or the disapproval of others drives your motivation to work.
- Economic pressure – You work purely for the reward. This is external from the work itself and is based on fear of financial failure.
- Inertia – You work because that’s what you did yesterday. It’s like when someone is on autopilot and going through the motions. If you asked them why they do what they do, they can’t tell you.
In high-performance cultures, play, purpose and potential were most prevalent characteristics displayed by the organisation’s employees. The last three – emotional pressure, economic pressure and inertia – were suppressed. Higher customer satisfaction scores are correlated to workplaces with a strong culture. Higher customer satisfaction scores can also be linked to improved company revenue.
As a leader, if you are leaving your company’s culture to chance, and not actively working at it to ensure it supports the purpose of the organisation, you are missing a great opportunity to differentiate yourself.
As the great Peter Drucker once said:
“Culture eats strategy for breakfast!”