Understanding company culture and employee engagement
By: Dr. Laura Hamill
When most people think about company culture and employee engagement, they focus on tangible, surface-level perks and policies: dress code, the framed mission statement in the lobby, the presence or absence of ping-pong tables in the office. Though these may be extensions of culture and impact engagement, they don’t define it — and they certainly don’t create it. While there’s no one-size-fits-all approach to shaping company culture, organizational culture tools and a company culture platform are a great place to start.
Company culture is an organization’s collective values, norms and beliefs — also known as “how things are done around here.”It’s also known as the backdrop for everything that happens at your company and the day-to-day experience. For example:
Do employees feel valued?
Can they do their work?
Do we tell the truth to each other?
Do we give honest feedback?
Do we speak the truth to leaders?
Do leaders always “win” the conversation?
Is the organization luxurious and elaborate — or frugal and modest?
Is it fast-paced and risk-taking or methodical and calculated?
In short: What’s it like to work here?
Employee engagement is a deep connection and sense of purpose at work that creates extra energy and commitment. It’s all about energy. People often confuse job satisfaction with employee engagement. But that burst of energy people feel actually comes from being engaged in their work — not just with how satisfied they are while at work. It’s like being “in the flow” — when you get so caught up in what you’re doing that you lose track of time. You feel challenged, but not overwhelmed.
Employee engagement and organizational support
Many leaders assume employees are responsible for their own well-being and engagement at work — so they hire for passion or energy. But once these enthusiastic employees start working, your organization needs to support them in ways that keep them engaged.
We call this organizational support for well-being. When a company has strong organizational support, an employee feels like their company really cares. The resources, communication, reinforcement and encouragement leaders give their employees ultimately helps them become engaged. And the numbers prove it.
What does company culture look like?
The thing with culture is that you don’t always see it — especially after you’ve been at an organization for a sustained amount of time. It’s most noticeable as a new employee or when you step into a client’s office for the first time.
For example, let’s say you’re in the lobby of a very busy company — there are phones ringing and people rushing around, opening and closing doors, speaking at a rapid-fire pace. Does it feel exciting? Maybe that’s because people are energized by their work, entrenched in the rush and constant change. Or does it feel panicked? In that case it could be that the organization is chaotic, lacks integration and is constantly putting out fires.
Either way, over time, company culture becomes more ingrained and less evident to those who are in it. To determine what culture looks like, you have to take a step back and look at the day-to-day behaviors and expectations, including:
What are those little micro-events that new employees experience?
What message are they getting about what’s really important?
Does your onboarding process orient people to the organization’s ways — or let them navigate on their own?
These early experiences say a lot about your company, and you want them to appropriately reflect your culture. It’s also important to understand company culture at the attribute level, not the overall level. Below are some examples of cultural attributes based on how decisions are made in the company.
Note that there’s no right or wrong here — just the extent to which specific cultural attributes are helping versus hindering.
Another way to look at it is that culture is to organizations as personalities are to individuals. A culture’s characteristics are not overt or concrete, but they’re powerful because they shape employee behavior — telling people what to pay attention to, what things mean, how to react emotionally and how to behave. And the culture is ubiquitous throughout the organization, even though it may present itself differently from one department to the next.
Finally, whether a company culture is “good” or “bad” is relative, depending on the behavior and results it drives. Some examples:
Company culture aligned with strategy
A technology company with a clear focus on sales has done an exceptional job of building a culture where selling is king. They fully support sales training and new employees receive this message from the get-go. Along with an understanding of expectations and a clear-cut process for selling the product and servicing existing customers.
A health technology company with a focus on innovation and collaboration built a team-oriented culture of health that drives their strategy. Everyone works in an open plan office and the leadership team is accessible. They hold walking meetings more than conference room powwows and the culture is woven through their policies, procedures, benefits and people system (right down to the interview guide to evaluate candidates for cultural fit).
Company culture not aligned with strategy
An insurance company wanted to “disrupt” the industry by delivering new products and developing innovative approaches to their customers. But their corporate culture of command and control, their lack of trust, rampant bureaucracy and “that’s not in my job description” attitude didn’t allow for new ideas and approaches to surface.
A technology company with a large number of customer service employees advertised that their personalized service sets them apart from the competition. Yet they cut back on training for these employees, increased the span of control for service supervisors and took away valued benefits.
Why employee engagement and culture matter
Like it or not, a culture is being socialized at your company. Company culture tells people how to behave, whether they’re valued, how to get their work done and what matters to the organization. So ask your leadership: Is this the culture we want? And will it help us achieve our strategy?
Because here’s the thing: Research shows that culture is the single most important factor in organizational success or failure. And while most companies understand the significance of strategy, they often don’t realize that culture is what drives it. So if your culture doesn’t align with and support strategy, your strategy will fail. Period.
What does it mean to align company culture with strategy? It means you thread culture through everything you do — every policy, procedure, system, benefit, perk, even your office setup: all of it should be intentional and consistent with the culture.
The relationship between culture and employee engagement
While there’s a clear distinction between organizational culture and employee engagement, both affect employees in the workplace. Engaged employees are focused, energized and enthusiastic — they mean better business results, plain and simple. They enjoy their work, and they help boost productivity and profits. In other words, boosting employee engagement is good for people and for companies.
Just like company culture, research shows that companies with high employee engagement outperform the stock market, are more lucrative and have stronger internal metrics such as performance. If you want to see your people flourish when it comes to both how they feel about their work and their performance, you have to invest in your company culture first.
What happens when you understand company culture?
The impact of organizational culture and employee engagement goes beyond growth and profit. Most companies aren’t even aware of their current culture and most companies who delve into culture emphasize the culture they want to have (e.g., their values). But most people fail to understand the gap between where they are now and what they want to have. That’s why understanding your culture (and we’ll talk about how to do that) allows you to accomplish a variety of key objectives:
Socialize new employees
Describe your company to potential partners, clients or employees
Align employee and leadership behaviors — as well as internal work streams — with the culture
Improve satisfaction with customers
Develop a leadership framework for strategy development and communication
Differentiate the company for potential partnerships
Ensure the company is well-positioned to meet its future business objectives
10 Ways to create a strong company culture
An intentional company culture approaches culture from an architectural model — based on proactive, interventionist activity by leaders — instead of an evolutionary model, which occurs when the culture is allowed to be shaped by random events. Here’s how to develop company culture:
1. Secure ownership from your leadership team
Ideally, your CEO should be the face of the culture you’re trying to shape. But HR can also lead this effort. When making the case for an intentional culture to leadership, make sure they understand the importance of aligning culture with your business strategy.
Think about the different personalities in the room: for the “system thinking” leader, show how culture is the backdrop of the entire organizational system. For the “people” leader, show the relationship between climate and culture. And for the “data driven” leader, show how you can articulate and measure culture, as well as show progress over time.
2. Conduct an audit of your organizational culture and employee engagement support
A culture audit helps you understand how your values are visible through the employee experience. For example, is your organization top-down or participative, hierarchical or flat, secretive or honest? And most importantly, does your culture align with strategy so you can achieve business objectives?
3. Thread your culture through processes, policies and procedures
This means aligning the culture you want with business strategy. It means always asking if what you’re doing reflects the culture — when it comes to policies, procedures, organizational culture tools and systems (especially your people system and organizational structure), communications, interviews, conducting meetings, benefits and more.
For example, if you’re a team-oriented, flat organization, you can’t squirrel away your leadership team behind bulletproof glass doors. Maybe they have a slightly larger office — or a corner desk if your space is open-plan — but they need to work alongside everyone else.
4. Help ensure employees understand expectations
This doesn’t come from a tagline — it comes from developing clear behavioral expectations and educating employees on expectations.
5. Hire for culture fit
At Limeade, we hire for culture first. It’s easier to hire someone who fits our culture and train them a bit where needed, than to hire someone with a glowing resume and ask them to shift who they are to fit in. Employees are 20% more engaged when they have the right amount of mix between their work and personal life.
6. Hold everyone accountable for living the culture — and measuring progress
Create metrics around how well employees are demonstrating the culture, rewarding those who live it and determining appropriate consequences for those who don’t. Knowing how to measure workplace culture and holding leaders, managers and teammates accountable is crucial for success.
And when it comes to giving shoutouts or kudos, whatever you’re doing has to align with your culture. The gold watch was once a great way to mark tenure when years of service mattered. But it requires more than surface-level perks to build a real culture and a great employee experience.
7. Make sure leaders are walking the talk
You can’t build an intentionally open and honest culture if you have a leader who doesn’t communicate critical information to their team. Similarly, you can’t preach work-life balance if you have leaders driving their teams into the ground. Make sure your leaders understand the culture and expectations, and then evaluate how they’re mapping their management style and behavior to the culture.
8. Empower your culture champions
There are always respected leaders — both formal and informal — who are great culture ambassadors. These are the people who serve as role models by “walking the culture walk” every day. Make sure the champion network knows they’re regarded for upholding the culture and give them free reign to align their management or work style with it.
9. Communicate the culture
Don’t be afraid to openly address culture with your employees. It’s crucial to communicate about your culture — how it’s defined, what’s expected of people and how they can “live” the culture.
Keep in mind that your communications must also align with the culture. If things are formal and structured, your communications should follow suit: distributed at regular intervals, using more formal language. If your culture is more innovative and iterative, you might just communicate as needed, using a casual, conversational tone.
10. Test and reiterate
Sometimes throwing spaghetti at the wall is the best approach — especially if you can clean it up quickly when it doesn’t stick. In other words, be willing to fail fast and fix faster. As you take on the role of culture architect, there are a number of ways to know if you’re moving in the right direction — like employee feedback, behavior (is it what you want or not?) and straight-up business results. Test your methods frequently and be willing to reiterate often, as swiftly as you can.