The Importance of Company Culture – Why it Can Make or Break your Company
Billie FowlerHead of People & Culture
There is a misconception that companies with great culture are full of hipsters working in a novelty office space. Yes, a company’s culture can be fun and unconventional, but having a great culture can be a way for you to drive your company to outperform your competitors.
What is Company Culture?
Company culture, also known as organisational culture, is a system of values governing the way people behave within a company. It encompasses elements such as work environment, company mission, values, ethics and goals. Organisational culture influences the way people in the company behave and perform their jobs.
Culture Is the ‘Fit’ Between Individuals and Organisations
Company culture is rooted in the development of organisational psychology. In the 1970’s, John Morse released a study on the ‘fit’ between personality and organisation. He found that those in congruent jobs that matched their personality reported feeling more competent. A positive cultural fit can improve self-esteem and make team members feel more capable of carrying out their work to the best of their ability. They have greater job satisfaction and identify more with their company. They are also more likely to remain within their organisation, are more committed to their job and show superior job performance. Ding ding ding! That means lower staff turnover and better company performance.
Establish Your Culture Through Values
Inspired by Zappos‘ company culture, we wanted to ensure that as we grew as a company, we were financially successful as well as an enjoyable place for people to work, with a common goal and values that we all agreed on and were willing to live by. To build a company culture that we wanted our team to nourish, we engaged and collaborated with the entire team to find the common values that connected us together. We held numerous team meetings where we were really able to flesh out what was important to us and came up with our eight values – Passion, Reliability, Teamwork, Creativity, Fun, Transparency, Learning & Accountability.
The common mistake companies make when coming up with their company values is they invest a lot of time in defining them, but then they make the assumption that, by sticking them on a wall, people will live by them. Committing to a newly defined set of values is initially a challenge and requires finding a way to positively reinforce them early and often, so that every team member knows them and knows how to apply them to their everyday work.
We talk about our values in Team Meetings, use them to give feedback and award a weekly prize to someone who really exemplifies one or more of our values. We also use WooBoard, a team recognition platform, to maintain a constant stream of praise, where we also tag our company values. Furthermore, we’ve also integrated our values into performance reviews and our recruitment processes. Even our Christmas Party awards are awarded based on our values.
Our company culture isn’t just about driving an efficient business. It’s also about looking after our team. Whatever our priorities are in life, we look for more than just earning money in our jobs. Over the years we’ve adapted a number of benefits for our team to encourage work life balance, healthy & active lifestyles and self-development. Each month, we have an event to celebrate the successes of the month and provide an opportunity for the team to socialise outside of work. We provide annual flu vaccines, incentives for exercising, Friday night drinks and a complimentary cereal station to name a few. Our open-plan office space is relaxed and nurtures a very collaborative environment where input is welcomed amongst all members of the team and transparent feedback is encouraged.
We received independent recognition in 2016 for the effort that we’ve put into making 4mation a Great Place to Work, ranking 3rd in the Best Places to Work in Australia Study.
In short, investing in your team is investing in your company.
Using Culture as a Hiring Mechanism
The hiring process is the cornerstone to ensuring our company culture is embedded in the genetics of our company. Cultural fit is not something that prospective employees can instantly create or change, so we look at whether their behaviour, their values and their attitudes are in line with ours. Imagine you’re in a boat with a group of people and everyone has an oar. If some people row at different speeds, or in different directions, or some don’t want to row at all, you won’t get anywhere very quickly. The success of our company relies on a happy and cohesive unit and that’s why hiring the right fit is important.
Hiring for cultural fit means sometimes you have to let go of talented, experienced people that could make an impact on the company. A bad hire can have an even greater negative impact on your employees. Employees who don’t fit in with your culture can stifle enthusiasm, motivation and the dynamics of your team. This diminishes productivity and profitability of your organisation and ultimately leads to poor retention. Poor employee performance generally stems from incorrect hiring decisions, which is why we have an extensive and unconventional hiring process.
Candidates go through a number of stages, beginning with an initial phone call to qualify them to come in for a group interview. This consists of a meet and greet with a few of our team members, a tour of the office followed by a presentation that outlines our values and how we apply them to our company. This gives candidates a more informed choice as to whether they actually want to work with us or not. We invite successful candidates back in for a one on one interview. We’ll shape our questions to highlight how candidates might or might not fit into our culture. Candidates then sit a timed technical test to assess hands-on skills, but the results hold less weight than cultural fit. When looking for new team members, we don’t want people who can just ‘do the job’. It’s a easy to train up new skills, but very difficult to change someone’s personality.
The value of Common Goals
Don’t assume that a great company culture is self-sustaining. It’s like a living organism – if nurtured it will grow and flourish. If ignored it will wilt and die.
Ultimately, the company’s culture defines how people behave when the boss is out of the room. It is the principles that will guide your employees’ behaviour, decisions and processes and is the glue that holds your company together. Your employees will live by it, it will sustain their enthusiasm, it will get you through hard times, it will be the basis for your hiring and firing decisions and it will get all of your employees working towards the same vision.
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