Why is company culture important?
Company culture has an effect on engagement, productivity and overall happiness for employees.How important is company culture for a business? According to a recent survey, it may be one of the most important aspects of change that can be invested in.
A recent study conducted by Shiva Rajgopal, an accounting professor at Columbia Business School, and three co-authors from Duke’s Fuqua School of Business, found that healthy corporate culture is essential for a company to thrive. Although the actual definition of what company culture means varies business to business, and even more widely between industries, the survey found that:
- More than 90 percent indicated culture was an important part of their business.
- 92 percent believe improving corporate culture would improve the value of the company.
- More than 50 percent said corporate culture influences productivity, creativity, profitability, business value and growth rates.
- Only 15 percent said that the culture was fine within their business and needed little to no improvements.
In addition to the last bullet, 70 percent found that leadership needs to spend more time developing culture as a whole.
“CEOs and CFOs are very clear that getting culture right enhances value,” says Duke’s Campbell Harvey, one of the co-authors. “But it is a puzzle that if culture is so important to value, why do we hear very few CEOs talking about it?”
If your business needs a change in terms of culture, keep the following three tips in mind:
- Celebrate the wins: This may seem obvious, but letting your employees know that their abilities and accomplishments are seen is vital, as it often drives them to succeed more. Focus on the losses to learn, as they can help aid in better work practices, but the wins can also be telling in what is working and maybe shouldn’t be changed.
- Maintain effective communication: Culture breakdown often occurs when communication ceases to happen between employees, management and different departments. Be sure transparency is kept at its best level as well, as the more employees know and understand, the more apt they are to share their opinion on the matter or lend a hand when help is necessary. Communication develops relationships in the most effective manner.
- Start small and work toward larger goals in the background: Making a change can be difficult, but doing so in the right way will make all the difference. A small change could be establishing company lunches or encouraging employees to take breaks together in order to foster relationships. These attempts at change can often be seen right away. In the background though, develop a plan to make a larger change, and project a timeline to make it happen. This change could be more extensive, such as changing workload expectations.
Start looking at the culture within your business now for a projected plan of change into the new year.