Nine out of every 10 clients who contact us say they want to offer nilo.health as a way to improve company culture – but what exactly does this buzzword mean?
Corporate culture, also called “organizational culture“, can be summarized as the “prevailing values, norms and attitudes that determine decisions, actions and behaviors within a company”. It’s a kind of subterranean modus operandi that grows and evolves over time at every organization. It permeates and affects each and every individual and environment – from the boardroom to the company kitchen.
The slippery nature of culture doesn’t mean it should merely be ignored and left to do its own thing – however, that’s the mistake leaders frequently make. As the authors of the HBR article “The Leader’s Guide to Corporate Culture” note: it’s common for leaders to be “confounded by culture […] many either let it go unmanaged or relegate it to the HR function, where it becomes a secondary concern” The authors recommend that leaders instead “maximize [culture’s] value and minimize its risks [by becoming] fully aware of how it works”, bearing in mind the warning “culture eats strategy for breakfast”.
Why cultivate your culture?
Culture is quite simply the linchpin for:
- achieving company goals
- employee retention
- providing support to employees during crises
Studies have found that a culture perceived as “positive” by employees results in:
- fewer employee sick days
- enhanced employee retention
- open communication and better conflict management
- greater employee receptivity to new processes and change management
- enhanced attractiveness to potential employees
Most of the factors on the second list are signposts of employee well-being and feelings of psychological safety. Thus, a “positive” culture is also often one that is mental health-friendly – explaining in part why so many clients reach out to us when the topic of culture is put on the table. And there’s another reason culture is more in the spotlight than ever these days…
The Great Resignation, which has seen record numbers of workers around the world leaving their jobs since the start of the COVID-19 pandemic, has thrown countless organizations into a frantic search for new talent – and profound self-searching. A study published this past February, found that the most common reason cited for quitting during the Great Resignation was toxic company culture. Another study, recently published in MITSloan Management Review, performed an analysis of more than 1.4 million Glassdoor reviews for companies across 38 industries and found that “company culture is 12.4 times more likely than compensation to predict whether an employee leaves”.
What does it mean when culture trumps compensation – when you can’t simply “buy” loyalty? It means you’re facing a much more diverse set of needs from current and prospective employees, you’re dealing with “complex” emotions not “pure” economics. What better time to nurture the all-pervasive organism of culture rather than taking a “whack-a-mole” approach to individual employee pain points?
The first step of addressing your company culture is assessing it. Assessment can be tricky given how ingrained and subjective culture is and the fact that it manifests in more qualitative rather than quantitative factors. Start by evaluating the following aspects of culture via an anonymous company survey:
- How well leaders and employees handle conflict and mistakes
- How constructively and effectively feedback is delivered
- How the company deals with stakeholders
- How confident employees are about taking risks/initiative
- How the company shows appreciation for good work
- How family-friendly the company is
Note that some of these aspects are covered in Amy Edmondson’s Psychological Safety survey, recommended in our Corporate Sanity Guide.
The 7 absolute must-haves
Once you’ve got a clear picture of your company’s strengths and weaknesses, you can put together a strategy to cultivate the culture-must-haves listed below, paying particular attention to problem areas highlighted in your survey.
1. Build respect into your company DNA
Respect was found to be the number one culture ingredient for employees in the study by MITSloan Management Review. Respondents defined it as: ”being treated with consideration, courtesy and dignity, [while having their] perspective taken seriously”.
Ways to cultivate respect:
- Ensure all leaders and employees possess the essential soft skills. Consider soft skills training and make a list of the skills most critical to your organization, evaluating candidates for these during the interview process.
- Implement a zero-tolerance policy towards any form of disrespect.
- Embrace transparency and authenticity when communicating on company matters, showing employees they are trustworthy and valued.
- Express your appreciation and gratitude for great work; give feedback sensitively.
2. Promote supportive leadership
Ranked number two in importance – we can see why: leaders have a tremendous influence on company culture, as well as a far-reaching impact on whether an employee feels supported and valued or isolated and disrespected. Choose team leaders according to the qualities most sought after by employees, “[leaders] being responsive to their requests, helping them do their work, accommodating individual needs, offering encouragement and having their backs”– and also make sure you have processes in place to handle toxic leadership swiftly.
3. Prohibit unethical behavior
As the MITSloan study’s authors point out, unethical behavior is more common than you might think – and it’s contagious. Just one manager’s unethical behavior – be it theft, plagiarism or disobeying industry regulations – increases the likelihood of others following suit. Depending on the severity, ensure offenders undergo counseling, face disciplinary action or are removed from their posts.
4. Offer benefits & perks
Benefits and perks won’t fix broken culture, but they do matter. On one hand, they are a way of showing your employees you care about them, on the other, they can positively influence the culture. Social or team-building events can help build and reinforce interpersonal bonds – especially after a return from home office. Offering mental health resources as a benefit helps foster an authentic, inclusive and respectful communication culture that doesn’t shy away from critical topics such as DEI, life-work balance and mental illness.
5. Sponsor learning & development
Providing opportunities for learning and development via in-house trainings, flexible work schedules or subsidized education is a big plus for employees – the third most frequently discussed topic on Glassdoor after management and compensation. The advantages are manifold with further education benefitting not only the individual, but often strengthening the company as well – for example through skill upgrading.
6. Be transparent about job security
At first glance, you might think job security doesn’t have much to do with company culture, but it does! Transparency about a company’s financial status can prevent the rumor mill firing up and fueling demotivation. In a best-case scenario, transparency – even about company challenges – can spark team spirit: think of the employees of Gravity Pay who, when informed of the company’s financial woes at the outset of the pandemic, decided they were going to “create an opportunity for people to anonymously cut their own pay to help the company”. A whopping 98 percent of employees requested pay cuts. Having clear policies in place for employee errors is another culture-booster, helping teams stay innovative and proactive without having to feel like they’re walking on eggshells.
7. Walk the talk
Studies show that leaders who merely pay lip service to their company’s core values don’t have much of an impact on how the company culture is perceived by employees, BUT when leaders practice what they preach, putting the values in action themselves, employees notice and rate the company culture positively, the MITSloan Management Review study found.
- your core values are authentic/realistic/achievable
- you formulate actionable values and norms
- you keep your values in mind when recruiting