The Importance of Company Culture to Your Business

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In definitive terms, company culture also goes by the name of corporate culture. That title, however, can be a tad misleading, conjuring up images of huge enterprises and global MNCs. Instead, it refers to the climate and internal values of your company's working space – and is certainly not something that is only a concern for large enterprises.

As a small business owner, the responsibility for cultivating a positive company culture rests squarely on your shoulders. While not a pressing issue, such as working capital, customers, or supply chain, the internal culture of your organisation can have a significant impact on many facets of your business, especially in the long run.

To illustrate the importance of company culture, let's take a closer look at what exactly it is, and how it can affect the productivity, success and long-term health of your enterprise.

What is Company Culture?

If a business organisation were a person, then its company culture would be equivalent to its personality. Your personality defines how others perceive you, and it is reflected in the way they deal with you and behave towards you. 

The same is also true for a business organisation. If it has a positive company culture, then it will, in turn, have a positive impact on the various parties it deals with – including employees, customers, and suppliers. Negative company culture is similar to an unappealing or unpleasant personality – it alienates people, both inside and outside the business organisation.

Arriving at a strict definition of company culture is not very easy. It is like the old parable involving visually impaired men trying to describe an elephant – the sum total is vast, and there are many diverse parts involved

One thing is central to the culture of your firm, though – your employees. Your entire culture relies on the different policies, values, and practices that oversee and guide the people inside it. 

The Different Aspects of Company Culture

The guidelines of a company culture are not the same as written rules and regulations; instead, it is something that develops organically, over the lifetime of a company. You can see it reflected in the following facets of any organisation, for instance: 

  • How employees dress. Casual and laidback, or formal and serious? Or something in between?
  • How they interact with each other. Friendly, respectful and warm, or hostile, cold, and rough? 
  • How well the employees are treated. Do they get benefits, perks, and encouragement?
  • The hiring standards and practices maintained there. What kind of people do they hire?
  • Its attitude towards inclusivity and diversity. How do they handle sensitive issues like discrimination and harassment? 
  • Its attitude towards hierarchy. How close is the top-level management with the other levels within the organisation?
  • Its external face. How well do they handle the customers, partners, and other third parties connected to the organisation?

Remember that there is no single formula for the perfect company culture, too. It can vary depending on many factors, such as your business sector, geographical location and leadership style

For instance, a Wall Street firm like Goldman Sachs will have a very formal and traditional workspace, where punctuality, professionalism and appearance are essential. In tech hubs such as Silicon Valley, however, firms like Google and Apple will have a far more non-traditional, business-casual approach towards workplace policies, including working hours and employee attire. 

On a similar vein, what constitutes acceptable working hours in a place like Japan may incite violent protests among employees in a country like France! There are many nuances involved in the subject of company culture. 

Why You Should Not Ignore Company Culture

The thing with something as nebulous as company culture is this: if you are a business owner who overlooks it at the start of your entrepreneurial journey, then that doesn't necessarily mean that your company will be left without one. 

In fact, workplace culture is something that usually evolves naturally. However, you still have to retain some control and direction over it, as, just like a plant in a garden, there is a high degree of chance for weeds to creep in. 

Therefore, you have to be watchful and proactive in setting specific standards for internal corporate culture, just like a good gardener. There are many advantages to having a positive corporate culture in your organisation, and investing the time in cultivating a good one is something that an increasing amount of entrepreneurs are doing. 

Indeed, attitudes in the business sector have evolved rapidly in the last two decades. Whether you like it or not, company culture is an integral part of the management dialogue at the moment, and you can be sure that many small businesses and startups are putting it in the spotlight.

While you want it to blossom naturally, ignoring it altogether will only put you at a disadvantage vis-a-vis your peers in the market. In a worst-case scenario, it will even allow cost you a competitive edge, due to the following reasons:

It influences your reputation

In the social media age, it doesn't take long for bad reviews to stack up. A toxic and negative workspace is a fertile ground for controversies and bad press, which can affect you in a host of different ways, ranging from the relatively mild and benign to those that are downright painful. A positive and healthy company culture will make your organisation stronger and more resilient.

It is better for the HR department

If you want to attract talented employees to your business, you need a positive culture and working environment. Employees who join such organisations tend to stay for longer periods. On the other hand, if you have a negative or weak culture, it will make it harder to retain top talent within your firm. A good company culture makes your HR strategy far easier to implement.

It is better for productivity

Morale plays a massive role in most human activities – it can win wars and help move mountains. Workers tend to have higher morale in organisations with a positive corporate culture, and those same satisfied workers will be willing to work harder and longer for the benefit of the company.

It is better for your customers

Successful companies have a knack of retaining loyal customers, and they do that by treating them the right way. That cannot happen in a strict, well-marshalled corporate culture. You need the right kind of values, focus on quality products/services, reliable partners, and above all, motivated and happy employees.

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As a business owner - especially if you have an SME - it can be hard to look beyond your profit margins. Investing in a positive company culture is never a waste of time, though; the long-term dividends are well worth the opportunity cost in these crucial early days of your business.

Meanwhile, if you're looking for further inspiration, then don't forget to take a look at our list of some of the most definitive company cultures in the world.

What are your thoughts on company culture? Is it a gimmick, or an integral aspect of a successful business? Join the conversation in the comments below.