Organisational culture

The importance of building a high-performance organisational culture

If you want your business to not only survive but thrive in the post-pandemic world, your organisational culture could be key to every aspect of your success, from retaining key employees to increasing your bottom line.

Companies with a healthy culture provide not only a great place to work for their employees but have the infrastructure in place – policies, practices and people that orchestrate an ideal work environment that drives increases in productivity, revenue and a healthier workforce that is committed to its organisation’s success.

These companies are 1.5 times more likely to see a growth in revenue in excess of 15 percent over three years. Additionally, they are also 2.5 times more likely to enjoy meaningful growth in their stock value over the same period.

However, despite this, only 31 percent of HR leaders consider it in a position to drive future business growth. Improving an organisations culture isn’t easy; in fact, 85 percent of companies fail when they attempt to transform.

What is organisational culture?

Though most businesses agree that it exists and has a significant influence in shaping a company, there is some degree of fuzziness over the definition of what comprises a company’s culture.

This confusion creates a problem. If a company struggles to define its culture, can it fully understand how it influences employee behaviour, the employee experience or company productivity?

According to PeopleInsight, a helpful way of defining a organisations culture is by its shared beliefs, expectations, language, customs, habits and attitudes of its employees and the company’s underlying values, norms and standards.

Additionally, it can demonstrate how a company interacts with the outside world, treats its employees, conducts business, and handles marketing and advertising.

It also impacts employees experience and engagement levels, and a company’s reputation and branding can significantly impact recruitment and attracting top talent.

In essence, it makes a company what it is. A great culture has positive traits that lead to improved performance at all levels. In contrast, a dysfunctional organisation may have negative traits that hinder performance and impact employee experience and engagement.

Finally, when you’re considering what it means, don’t confuse it with your company’s goals or mission statement, though they may be important in defining it. Your culture is developed over time through consistent and authentic behaviours.

If you want to see your company’s culture in action, watch how your CEO addresses a crisis, how a manager corrects a mistake made by an employee or how your customer service team respond to new customer requirements.

The importance of a company’s culture

Your organisation’s culture will impact every area of your business, from employee benefits to contract terms and employee punctuality to the tone used in communications.

When your business needs to recruit, your culture can offer a significant advantage. Consider this: 77 percent of workers will consider a company’s culture before applying for a position. In addition, almost half of employees would consider sacrificing salary to work in a company with a better culture. It is one of the top indicators of employee satisfaction and why a little under two-thirds of employees stay in their current position.

Microsoft and Salesforce are two excellent examples of organisations that prioritise their culture and have gone from strength to strength.

Under Steve Balmer’s leadership, Microsoft was known for its cut-throat competitiveness but has been transformed since Satya Nadella became CEO in 2014. First, he upended the culture at Microsoft, moving it from a place where employees had to prove themselves to one where they were encouraged to improve themselves through a programme of continuous learning. This marked shift has transformed Microsoft’s success, allowing them to compete with Apple and Amazon as one of the world’s most valuable companies and have a market cap close to the elusive $1 trillion mark.

Under founder and CEO Marc Benioff, Salesforce has put its company culture at the front of everything they do since its foundation. As a result, they have experienced outstanding growth in a highly competitive sector, with their stock price growing year on year by an average of 26 percent.

According to Fortune, Salesforce is recognised as one of the best companies to work for in America, driven by the philanthropic, cultural norms that Benioff instigated. New Salesforce employees spend part of their first-day volunteering and receive 56 hours pay annually to volunteer in their community.

Organisational culture has a direct or indirect bearing on the following, as suggested by research published in the Journal of Social and Development Sciences:

  • Goal achievement
  • Team cohesiveness
  • Employee performance
  • Creativity and innovation
  • Competitive edge
  • Long-term economic performance
  • Customer service
  • The ultimate success of a business

How to build a high-performance organisational culture

As ably demonstrated by Marc Benioff at Salesforce and Satya Nadella at Microsoft, leaders set the tone.

When you want to develop your organisation’s culture, the first thing you need to address is the purpose, which you can identify by asking three questions: where are we going, what do we believe in, and why do we exist?

The answers to these questions need to connect to the company’s leadership. Now you’ve identified the purpose, there are five areas to consider in order to create a high-performance culture in your organisation.

Clarify and Communicate Values

First is to establish the cultural values that anchor your aspirational culture to your organisation’s values and vision.

Reinforce Positive Behaviour

If you want to foster a resourceful and positive attitude in your employees, it is essential to reward those who represent your company values as their behaviour will increase performance. Furthermore, improved employee performance will increase customer satisfaction and, consequently, the success of the organisation. Therefore, positive employee behaviour should be rewarded to motivate them to work more productively and increase their self-esteem.

Encourage Open Communication

Which will build trust and create a healthy atmosphere in the workplace. Leaders that believe in empowering their employees from top-level to entry-level will ensure a fluid, unbiased communication policy no matter the topic to discuss.

Empowering Employees

By giving them a voice in the decision-making process. This will, in turn, make employees feel more engaged and will improve performance. In addition, successful leaders believe in enabling employees to achieve their full potential by creating a culture of trust and providing training for professional growth.

Collect Feedback

Collecting feedback is a crucial ingredient in creating an effective culture to promote transparent feedback, enabling leaders to understand how their employees feel and share opinions on anything they believe needs addressing.

The importance of building a high-performance organisational culture cannot be over-emphasised. It improves employee motivation, productivity and retention, increases a company’s bottom line, and when recruitment is necessary, having a brand that attracts rather than repels top talent will ensure your ongoing success.