Organizational culture: development & importance

In today’s competitive market, creating a positive organizational culture is crucial. That’s why leaders need to create a workplace that fosters employee growth, innovation and workplace well-being. In this post, we’ll provide what you need to know about organizational culture, including what it is, the factors that influence it and tips for maintaining and shaping it.

What is organizational culture?

Organizational culture, sometimes known as “corporate culture,” encompasses shared attitudes, beliefs, assumptions and behaviors that shape how people think, act and interact with both each other and external stakeholders. Factors that can influence and define organizational culture include leadership, communication, teamwork, innovation, employment engagement, diversity and inclusion and more.

Leaders must take a step back and look at the bigger picture to understand how the workplace impacts the experiences and performance of everyone on the team, including new hires. When it comes to the latter, the onboarding process and other cultural initiatives should communicate values and expectations upon hiring them. It’s also essential to examine specific attributes, such as how decisions are made.

Why is organizational culture important?

Organizational culture is like a guidebook. It shapes everyone’s behavior, beliefs and attitudes, essentially showing your team what matters and how to accomplish tasks. Too often, leaders focus on only strategy and overlook the importance of how their team members respond to their environment.

A positive atmosphere is vital for attracting and retaining top talent, enhancing productivity and improving reputation. According to Limeade research, 60% of employees plan to stay at their organization for more than three years when they feel valued and cared for. When everyone feels valued and engaged, they are more focused, energized and passionate, resulting in better business results. Investing in these aspects can help organizations adapt to changing circumstances, ensuring they remain competitive and successful over the long haul.

Factors that can impact your culture

Factors such as the behavior of leadership to the physical environment of the workplace can shape your surroundings. Understanding these factors is important to maintaining a healthy and positive atmosphere that aligns with your values and goals while boosting employee satisfaction. In this section, we’ll explore some of the key factors that can impact your workplace and provide insights into how to manage them effectively.

Organization history and legacy

The history and legacy of your organization, including its successes and failures, can have a significant impact on how it’s perceived. For instance, if your business has a history of trying new things and taking risks, then it might encourage everyone to be more creative and innovative. Alternatively, if your business has been around for a long time and has always played it safe, then it might have more traditional values. Past financial performance, ethical practices and social responsibility initiatives also contribute to perceptions. It’s important to acknowledge how the past has influenced your organization’s legacy and make a conscious effort to align it with current values and goals.

Industry and market trends

Leaders need to adapt to changing industry and market trends to stay competitive or meet customer expectations. For example, if consumers are becoming more environmentally conscious, you may prioritize sustainability and eco-friendly practices. Similarly, the state of the economy can also have an impact on your organization’s atmosphere. During tough financial times, you may choose to emphasize efficiency and cost-cutting, while during periods of growth, you may focus on expanding operations. These external factors can shape values and influence how everyone feels about their jobs, ultimately impacting overall success.

Organization size and structure

An organization’s size and structure can impact its culture. Smaller businesses often feel like a big family or a tight-knit startup where everyone works closely together and has the freedom to make decisions. There’s a sense of collaboration and people often wear many hats to get things done. On the other hand, larger businesses may feel more structured and formal, with clear lines of authority and more specialized roles. They often have more policies and guidelines to follow. Additionally, the size can impact the level of communication and collaboration between different teams or departments, which can also influence the overall work environment.

Organizational policies and procedures

Organizations that care about the growth and happiness of its people ensure its policies and procedures help them achieve their personal and work goals. These businesses make the well-being and satisfaction of their team important while simultaneously focusing on high performance. To make a workplace that matches what you want, you need to create policies that value wellness and productivity at the same time.

How to build a strong organizational culture

You can’t develop a strong organizational culture overnight. Instead, you must build it through continuous practice and reinforcement of desired behaviors and values over time. Developing an effective and intentional tone for your workplace requires a thorough analysis of your current environment. By identifying the gaps between your current state and where you want your organization to be, you can then develop a plan for building an ideal environment for everyone. This involves more than simply stating values on a website or in a handbook; it requires consistent communication and reinforcement of those values through actions and decisions.

By keeping open lines of communication and regularly reinforcing your values, you can foster a work environment where your team members not only respect but also put into action the things that matter to you. Enable them by providing training and resources to help them uphold these standards. And don’t forget to lead by example and personally live out those values and beliefs yourself!

10 tips for maintaining and shaping organizational culture

While there is no one-size-fits-all solution, there are various strategies to maintain and shape your organization. Here are 10 tips that can help you develop and maintain a strong environment where everyone aligns with their goals and values.

1. Ensure top leadership establishes the culture strategy

To shape a successful company culture, it’s important to set the tone at the top and exemplify the desired culture at the highest levels of leadership. While the CEO should represent the desired culture, HR can also play a vital role in shaping and exemplifying it by:

• Demonstrating the importance of aligning culture with business strategy
• Showing how culture is the backdrop of the entire organizational system for leaders with a “system thinking” mindset
• Showing how a positive company culture can lead to a more positive work climate, boosting employee morale and productivity for leaders who prioritize people
• Articulating and measuring culture, as well as tracking progress over time for data-driven leaders

2. Encourage a positive workplace culture

Everyone, from the top executives to the newest hires, should follow the established framework of values and principles. When you follow the same guidelines you expect from everyone else, you set a positive example and emphasize the significance of the organization’s ethos. Failing to adhere to these established guidelines sends mixed signals to the rest of the organization and undermines their effectiveness. To properly reinforce values and principles, it’s essential to:

• Create opportunities for employees to discuss and apply the organization’s values and principles in their work and decision-making
• Recognize and reward employees who embody the organization’s values and principles, reinforcing the importance of these guiding principles
• Evaluate and update the organization’s values and principles to ensure they remain relevant and aligned with the organization’s goals and mission

3. Conduct periodic audits of your employee wellness program

Conducting periodic audits of your wellness program ensures that it aligns with your workplace’s values and objectives. By examining employee input, actions and business results, you can effectively gauge the program’s effectiveness and identify areas for improvement. Continuously testing and refining your methods through these audits is crucial for maintaining a positive and productive work environment.You can audit your workplace by:

• Assessing your organization’s communication channels, employee satisfaction levels and overall impact on the community
• Ensuring the cultural values support your business objectives
• Making necessary changes

4. Align your culture with your business strategy

Aligning your organization’s way of doing things with your overall direction is crucial to business success. Integrating your values, attitudes and behaviors into all aspects of your culture can create a sense of purpose and direction that aligns with your strategy. You can achieve this by:

• Defining your organization’s values, attitudes and behaviors, and make sure they are communicated effectively throughout the organization
• Ensuring that your hiring process is aligned with your organization’s culture and values, so that new team members are a good fit
• Developing policies and procedures that reflect your values and behaviors, and making sure they are consistently applied across the organization

5. Establish clear employee expectations

To build a strong organizational culture, you must establish clear employee goals. To ensure that employees understand what is expected of them and can represent the atmosphere you’re trying to achieve with your organization, you should:

• Define clear behavioral expectations and educate employees on what is expected of them
• Communicate about your company culture, including how it’s defined and what’s expected of employees
• Align your communications with the culture, using a formal or casual tone as appropriate

6.Embrace and seek employee feedback

Regularly seeking feedback from your team can help you better understand employee experiences and identify areas for improvement. This feedback can promote inclusivity and encourage engagement and ownership. To encourage feedback in your workplace, you should:

• Foster a healthy culture that values transparency
• Provide various communication channels
• Take action on the feedback

7. Prioritize diversity and inclusion

When you prioritize diversity and inclusion, you create an environment where all feel safe, respected and included. Not only does this promote a sense of belonging and togetherness, but it also encourages creativity and innovation. With different people from different backgrounds working together, fresh ideas and perspectives are brought to the table, leading to unique approaches and solutions that may have been overlooked otherwise. To promote diversity and inclusion, consider:

• Reviewing and improving your hiring practices
• Fostering an environment that promotes diversity and provides equitable opportunities for all employees
• Providing diversity training
• Offering equitable opportunities for growth and advancement

8. Celebrate employee success and achievements

Creating a culture of care and appreciation is the key to building a positive and productive workplace. When you take the time to recognize and celebrate employee behaviors, you demonstrate that you value their contributions and encourage them to continue striving for excellence. To show appreciation and recognition effectively, you should consider:

• Implementing employee recognition software, such as Limeade Listening 
• Empowering influential leaders by offering professional development opportunities
• Celebrating milestones and achievements

9. Hire candidates for culture fit

While a candidate’s skills and experience may be impressive, it’s important to remember that hiring someone who fits in with your organization’s beliefs and values is just as important. A candidate who doesn’t fit in with the workplace may cause unnecessary conflict, dissatisfaction and ultimately, high turnover rates. Here are a few key things to consider when hiring:

• Communication style
• Personal values
• Work preferences

10. Embody authenticity through trust and transparency

Embodying authenticity in leadership through trust and transparency can foster a positive culture with 70% of employees saying they’re motivated when leaders simply say “thank you.” When people feel valued and trusted, they are more likely to embody and uphold the values and beliefs of the organization. Here are some ways to cultivate authenticity in leadership:

• Establish trust with employees by treating them with respect and dignity
• Communicate openly and transparently
• Lead by example

Enhance your organizational culture with Limeade

Maintaining and shaping organizational culture can help you create a positive work environment that promotes productivity and engagement. You can achieve this by equipping yourself with effective culture and wellness solutions to provide your team with the necessary tools for an engaging and supportive workplace. If you’re interested in learning more about the Limeade experience and how it can help create a culture for your organization that aligns with your business strategy, book a demo today.