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What Role Does Organizational Culture Play in a Company’s Growth

What is organizational culture?

Organizational culture refers to a group of values, beliefs, and behaviours that are created and maintained by the organization’s leaders that shape how people work together and how they feel about their organization. And when you have a positive and supportive culture, it can really help a company grow and succeed.

So, the next time you hear anyone say – “that’s the way we do things around here”, “the rituals of our company”, “the company climate”, “the reward system”, “our basic values”, “we believe” and so on, they’re referring to their organizational culture.

The role of organization culture in a company’s growth

“Our assets walk out of the door each evening. We have to make sure that they come back the next morning,” – a famous quote by N.R. Narayana Murthy.

Every organization is dependent on its top performers for year-on-year growth. But what happens when the brightest stars of your organization leave?

76% of employees believe that a well-defined business strategy helps cultivate a positive work culture.

Many times, the reasons to change are the monetary benefits, perks, and business exposure. You can handle those situations, at-least temporarily. But what if the reason to change is the organization’s culture?

Organization Culture is perceived differently by enterprises. There are businesses that realize its significance and spend proportionately to either improve or sustain a positive culture while there are others who have ignored it altogether.

A Deloitte study reports that 94% of executives and 88% of employees believe organizational culture is important for company’s growth.

Although it is difficult to statistically show the impact of organizational culture, it is believed that employees from corporations with a strong organization culture experience a sense of belonging, engagement, and commitment towards their organization which is indeed critical for success. The key role of work culture is enlisted below:

  • Organizational culture goes a long way in creating the brand image of the organization. The work culture gives an identity to the organization. In other words, an organization is known for its culture.
  • Culture shapes the way employees interact with their workplace. A healthy culture encourages employees to stay motivated and loyal to management. Additionally, the work culture promotes healthy relationships amongst the employees. It also goes a long way in promoting healthy competition in the workplace. It is the culture of the workplace that motivates the employees to perform.
  • The organization culture helps build an emotional attachment to the enterprise. The culture cultivates a sense of belonging and commitment towards the corporation and develops a sense of unity in the workplace.
  • Every organization must have set guidelines for the employees to work accordingly. The culture of an organization represents certain predefined policies that guide the employees and give them a sense of direction at the workplace. Every individual is clear about his roles and responsibilities in the organization and know-how to accomplish the tasks ahead of the deadlines. Additionally, such policies help mould positive habits into individuals which makes them successful professionals. It is the culture of the organization which extracts the best out of each team member.

10 Steps to Building a High-Performing Organizational Culture:

1. Define Your Values:

Start by identifying the core values that define your company’s identity and guide its actions. Engage employees in defining core values through workshops or surveys to ensure alignment and ownership. Translate values into actionable behaviours and norms that guide day-to-day actions and decisions.

For example, if one of your core values is “Customer Centricity,” encourage employees to actively seek feedback from customers and incorporate it into product development or service improvement processes.

Clear values provide a shared sense of purpose and direction, fostering unity and cohesion among employees. This can lead to improved decision-making, enhanced teamwork, and greater customer satisfaction.

2. Lead by Example:

Leadership sets the tone for the entire organization. Ensure leaders embody the desired culture through their actions and behaviors. Train leaders on how to embody organizational values through their actions, communication, and decision-making. Encourage leaders to regularly communicate the importance of culture and recognize employees who exemplify desired behaviours.

For example, if “Open Communication” is a core value, leaders should actively seek feedback from employees, maintain an open-door policy, and address concerns transparently. When leaders demonstrate commitment to organizational values, it sets a positive example for employees to follow, building trust, morale, and accountability across the organization.

3. Communicate Clearly:

Clear communication fosters transparency, alignment, and understanding, reducing ambiguity and confusion. Establish regular communication channels, such as town hall meetings, newsletters, or intranet updates, to share information and reinforce cultural expectations.

Provide training on effective communication techniques, such as active listening and constructive feedback, to enhance interpersonal communication skills. For example, use storytelling to illustrate how organizational values are lived out in real-life scenarios, showcasing employees who exemplify the desired culture.

4. Encourage Collaboration:

Cultivating a culture of collaboration fosters innovation, creativity, and problem-solving capabilities. Create cross-functional teams or project groups to encourage collaboration and knowledge sharing across departments. Recognize and reward collaborative efforts through peer-to-peer recognition programs or team-based incentives.

For example, implement collaborative tools and platforms, such as project management software or online forums, to facilitate virtual collaboration among remote teams.

5. Recognize and Reward:

Recognition reinforces desired behaviours, motivates employees, and strengthens the connection between individual contributions and organizational success. Establish formal recognition programs that celebrate employees who demonstrate behaviours aligned with organizational values. Ensure recognition is timely, specific, and personalized to maximize its impact and relevance.

For example, implement a “Spotlight Award” where employees can nominate peers who go above and beyond to embody the company’s values.

6. Empower Employees:

Empowered employees feel valued, trusted, and motivated to excel. Delegate decision-making authority and autonomy to employees, empowering them to take ownership of their work and contribute meaningfully. Provide opportunities for skill development, career growth, and leadership training to empower employees to reach their full potential.

For example, implement a “Hackathon” event where employees are encouraged to pitch innovative ideas and collaborate on projects outside their regular responsibilities.

7. Promote Work-Life Balance:

Promoting work-life balance improves employee satisfaction, reduces stress and burnout, and enhances overall health and productivity. Encourage flexible work arrangements, such as remote work options or compressed workweeks, to support employees’ personal and professional needs. Offer wellness programs or initiatives, such as yoga classes, mindfulness workshops, or mental health resources, to support employees’ holistic well-being.

For example, offering flexible scheduling options allows employees to balance work commitments with personal responsibilities, leading to greater job satisfaction and employee retention.

8. Invest in Learning and Development:

Investing in learning and development enhances employee skills, knowledge, and competencies, driving performance improvement and career advancement. Offer a variety of learning opportunities, including workshops, seminars, online courses, and mentorship programs, to cater to diverse learning styles and preferences. Encourage continuous learning and skill development to foster a culture of innovation and adaptability.

For example, implementing a “Learning Library” platform where employees can access curated resources and self-paced learning modules on topics relevant to their roles and interests promotes ongoing professional growth.

9. Embrace Diversity and Inclusion:

Embracing diversity and inclusion fosters innovation, creativity, and resilience by leveraging diverse perspectives and experiences. Establish diversity and inclusion initiatives, such as employee resource groups or diversity training programs, to promote awareness, understanding, and appreciation of differences. Create a culture of belonging where all employees feel valued, respected, and empowered to contribute their unique talents and perspectives.

For example, implementing blind recruitment practices mitigates unconscious bias and ensures equitable opportunities for all candidates, leading to a more diverse and inclusive workforce.

10. Adapt and Evolve:

Cultivating a culture of adaptability and continuous improvement enables organizations to thrive in dynamic environments, navigate challenges, and seize opportunities for growth and innovation. Solicit feedback from employees through surveys, focus groups, or suggestion boxes to identify areas for improvement and gauge cultural alignment. Stay agile and responsive to changing needs, market dynamics, and industry trends, and be willing to reassess and adjust cultural initiatives accordingly.

For example, conducting regular pulse surveys to measure employee satisfaction, engagement, and perceptions of organizational culture, and using insights to inform strategic decisions, promotes ongoing adaptation and evolution of the organizational culture.

Qualities of a Great Organizational Culture:

A great organizational culture is characterized by:

  1. Alignment with Values: The culture reflects and reinforces the company’s core values, guiding principles, and mission.
  2. Engagement and Commitment: Employees are deeply engaged in their work, passionate about the company’s goals, and committed to its success.
  3. Open Communication: There’s a culture of transparency, open communication, and constructive feedback, fostering trust and collaboration.
  4. Innovation and Creativity: Employees are encouraged to think outside the box, experiment, and innovate, driving continuous improvement and adaptation.
  5. Strong Leadership: Leadership sets a positive example, inspires trust, and empowers employees to excel and grow.
  6. Employee Well-being: The organization prioritizes employee well-being, promoting work-life balance, and supporting physical, mental, and emotional health.
  7. Recognition and Appreciation: Employees feel valued and appreciated for their contributions, with a culture of recognition and reward.
  8. Diversity and Inclusion: The culture embraces diversity and inclusion, fostering a sense of belonging and leveraging diverse perspectives and talents.
  9. Adaptability: The organization is agile and adaptable, able to navigate change and uncertainty with resilience and creativity.
  10. Commitment to Growth: There’s a shared commitment to continuous learning, development, and improvement at all levels of the organization.

Types of Organizational Culture:

  1. Hierarchical Culture: Characterized by a strong emphasis on structure, authority, and clear lines of hierarchy. Decisions tend to flow from the top-down.
  2. Adhocracy Culture: Emphasizes innovation, risk-taking, and agility. Employees are encouraged to experiment, think creatively, and adapt quickly to change.
  3. Clan Culture: Focused on collaboration, teamwork, and a sense of community. Employees feel like part of a family and are deeply connected to the organization.
  4. Market Culture: Driven by results, competition, and a focus on achieving strategic goals. Emphasizes performance, accountability, and market competitiveness.

Organizational Culture FAQs:

Ans: Organizational culture profoundly influences employee engagement by shaping their experience, motivation, and sense of belonging within the company. A positive culture fosters high levels of engagement, leading to greater productivity, satisfaction, and retention.
Ans: Leaders play a pivotal role in shaping organizational culture through their actions, behaviors, and decision-making. By embodying the company’s values, fostering open communication, and leading by example, leaders can cultivate a culture that inspires and empowers employees to thrive.
Ans: Recognition is a cornerstone of a positive organizational culture, reinforcing desired behaviors, values, and achievements. By recognizing and celebrating employees’ contributions, organizations can foster a culture of appreciation, motivation, and mutual respect.
Ans: Organizations can assess their culture through employee surveys, focus groups, and cultural audits to gauge employee perceptions, values alignment, and areas for improvement. Regular feedback and measurement help organizations track progress, identify strengths, and address cultural gaps effectively.

Now we all know that employee retention is a key concern for organizations. Unlike previously, it is time-consuming, costly, and often the individuals who leave take proprietary knowledge that is impossible to replace. Hence management is realizing the importance of holding on to their existing people.

But how probable do you think it is to convince your employees to not make the switch? Now every employment proposition consists of some mixture of tangibles such as pay and benefits, and intangibles such as relationships with colleagues, work-life balance, and trust in management. Thus, when the current position is not meeting employee’s needs, an opportunity to join another organization crops up.

So, to answer the question, if the reason to change is tangible – it may not be a huge task to retain the talent. However, if it’s the latter – the management does have a task at hand. Because organizational culture cannot change instantaneously. Nonetheless, organizational culture influences all the aspects mentioned above. Organizations rewarding their employees on high performance instill a sense of satisfaction and achievement within the individuals.

In a healthy organizational culture, managers provide ways to maintain that balance, including flexible schedules, on-site amenities, and work-from-home options. Additionally, work cultures where company-wide goals percolate to employees of all levels, where employees are encouraged to work in collaboration and where all are given opportunities for training, new learning, growth, and promotion also have positive impacts on retention.

Embee firmly believes in the significance of organizational culture when it comes to engaging and retaining valuable employees. It is one of the important components that our CEOs, CTOs and other leaders employ to sustain performance, build emotional connect, and maintain a competitive advantage. We consider it a fundamental business strategy. Organization Culture does play a crucial role in organizations – it is a valuable asset and a key driver for employees.

Picture of Abira Bhattacharjee

Abira Bhattacharjee

Chief Human Resources Officer, Embee Software

An innovative and strategic business partner with over 21 years of diverse experience in global markets, I am deeply passionate about meeting talent needs and enhancing human capital experiences. My expertise lies in creating high-performance leadership teams and delivering effective HR solutions to attract, hire, and engage top talent. As an avid technology enthusiast, I possess extensive cross-functional experience encompassing P&L, operations, business development, DEI, and employer branding.

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