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If you’ve heard the term company culture, you’ll likely also know that it can have an
important impact on a working environment. It shapes the way employees interact with one
another, influences job satisfaction, and affects overall productivity – and therefore your
bottom line. But what exactly is company culture, and what can you do to improve it?
Each business will have its own company culture, meaning there’s no one-size-fits-all
approach. It’s tailored to fit the industry, business goals and size of the organisation, as well
as employee needs and preferences. What works for one company might not work for
another, so it’s important to familiarise yourself with different best practices and the
reasons behind them.
In this guide, we’ll explain what company culture is and how to improve company culture to
create a healthy, professional and productive working environment.
What is company culture?
Company culture is the set of attitudes, values and practices that shape a working
environment. It’s integral to the healthy and successful operation of any business, shaping
the daily experiences of employees, affecting how employees collaborate, and defining how
the business operates to achieve its goals.
Each organisation is different, so it’s important to understand how to improve company
culture in a way that works for your business. For example, a tech startup might focus on
fostering innovation and flexibility, while a large corporation might emphasise structure and
stability. Understanding your employees’ needs and aligning them with your business goals
is key to creating a positive and productive working environment.
The importance of positive company culture
Fostering a positive culture is extremely important for the success of your business, regardless of how large or small it is. Creating an enjoyable working environment not only creates better experiences for your employees, but also offers many tangible benefits for your business.
By ensuring that individuals enjoy their work and feel valued, a positive culture helps to avoid disengaged employees, leading to better employee retention, higher profits, and a more motivated workforce. Understanding how to improve company culture will therefore help your business to succeed, as well as supporting your employees.
A positive company culture can:
- Enhance employee engagement and job satisfaction
- Increase employee retention
- Reduce employee absenteeism
- Foster better teamwork and collaboration
- Improve productivity and innovation
- Boost revenue and profits
- Attract top talent to your company
- Strengthen your company’s reputation
When running a business, your culture should always be at the forefront of business strategy, and never an afterthought. By consciously integrating the attitudes, values and practices that you’ve identified into your daily operations, you can drive long-term success in a workplace where employees thrive.
The 4 key company culture examples
There are four main types of company culture every employer should know. By understanding how to describe company culture, you can better identify which aspects are relevant to your organisation, and how you can use them to improve employee productivity and boost profitability.
While each of these company culture examples has its own characteristics and benefits, there are certain drawbacks that might make them less effective or suitable for your business. You don’t need to follow one of these exactly, but they can be a helpful guide for defining what company culture is for your business.
1. Adhocracy
Adhocracy revolves around innovation, success and flexibility. The term comes from the Latin ‘ad hoc’, which means “for this” and is used in a work setting to refer to activities that aren’t planned in advance. Companies that embrace adhocracy foster a creative, fast-paced environment, encouraging experimentation, risk-taking and adaptability.
The adhocracy workplace culture is commonly found in industries like technology, as it supports rapid innovation and the adoption of new trends. While this can lead to increased creativity and a competitive advantage, the fast-paced nature can be taxing on employees, particularly those who thrive in a more structured environment.
2. Market
The market company culture is results driven, with a focus on performance that requires strong leadership to ensure success. Companies using the market model emphasise setting and achieving challenging goals, and tend to strive towards tangible outcomes such as KPIs and profits rather than employee engagement.
It’s common in industries that are focused on profitability and market competitiveness, such as finance, sales and consulting. While this boosts business growth and employee motivation, it can lead to excessive competitiveness and office conflicts among employees striving to meet targets.
3. Hierarchy
Hierarchy workplace culture emphasises structure, control and clearly outlined procedures. Organisations using this model tend to feature strict policies and multiple layers of management, with clear roles and responsibilities. A hierarchical approach tends to be found in large companies and high-risk industries such as healthcare and finance, as it makes it easier to manage and coordinate complex operations across different departments and functions.
While this approach can streamline communication and minimise issues with authority, the focus on hierarchy can hinder employee development and decision-making at lower levels. This company culture example also risks introducing micromanagement, which can have affect employee autonomy and morale.
4. Clan
The clan company culture is characterised by a friendly, cohesive environment where employees and employers share the same values and goals. It prioritises employee wellbeing and autonomy while also encouraging flexible teamwork and collaboration to boost motivation and support business success.
One benefit of this approach is that it fosters creativity and innovation, boosting overall productivity and creating a ‘family culture’ that makes employees feel valued. This makes it a good choice for companies looking to improve company culture in a remote or hybrid working environment. However, too much freedom can lead to reduced accountability and productivity, so it’s important to find the right balance for your business.
How to improve company culture
1. Review your current culture
The first step is to review your current workplace culture, as this will help you to highlight areas for improvement. See how your business fits into the company culture examples we’ve looked at above, and look out for signs of disengagement and low morale in your employees, which could signal underlying issues. If your employees are energised in their roles, understand the core values of the company and present themselves well in the workplace, it’s likely that you have a fairly positive culture.
It can be helpful to speak to your employees on a one-to-one basis to gain insights about the current workplace culture. Ask them to describe your company culture and suggest what could be improved to create a more positive and supportive environment. Similarly, conducting regular employee feedback surveys helps to support ongoing efforts to improve company culture, making it easier to address areas of friction in a timely manner.
2. Promote a culture of advancement
When considering how to improve company culture in your organisation, it’s important to find out what motivates your employees, and use this as the foundation for your approach. For example, employees who value a sense of accomplishment and who have a strong desire to learn and grow are likely to value a company culture that focuses on growth and advancement.
Increasing the chances for progression can better motivate employees and give them guidance about their career development, so they feel more in control of their roles. Clearly outlining progression routes and opportunities for professional development not only helps to support employee retention but also makes roles at your organisation more attractive to new talent.
3. Create opportunities for connection
Interpersonal bonds and opportunities for formal and informal communication are essential to creating a healthy culture. Some companies can be very segmented, and employees may only interact with their own teams or those that they work closely with in a professional setting. This is particularly true of companies with multiple locations, or that operate flexible or remote working arrangements.
Creating more opportunities for employees to collaborate and communicate with the wider organisation can help to foster creative problem solving, support healthy working relationships and strengthen teamwork. Similarly, regular social events and team-building exercises can help to contribute to a more unified company culture where employees feel connected and motivated to work towards common goals.
4. Encourage flexibility
Every employee has their own life outside of work, including family responsibilities, personal hobbies and interests, and their own mental and physical wellbeing. More and more, employees are considering flexibility as a key factor when looking for a new job, meaning that a workplace culture that supports a healthy work-life balance is essential.
Initiatives such as flexible hours, remote working and duvet days can help to foster a flexible working environment that reduces stress and increases motivation. These initiatives not only improve morale and enhance engagement but also help to build trust for employees and employers alike. While they may feel complex to manage, implementing the right HR software for remote workers can make admin a breeze.
The challenges of improving company culture
Like any other aspect of managing a business and motivating your employees, improving company culture poses several challenges.
The biggest barrier is resistance from employees, which could also include pushback from key stakeholders who don’t understand the need for change. It’s important to remember that “we’ve always done it this way” isn’t a reason to stick with policies and procedures that don’t get results.
Effective workplace communication is key when working to improve company culture, as it allows you to not only explain what is happening, but why. It also allows you to understand why employees may be hesitant, such as being afraid of the unknown, familiarity with existing processes, and scepticism about the benefits of change.
Before, during and after the implementation of any initiatives to improve company culture, it’s important to measure key performance indicators such as employee engagement. This will give you a better insight into the current condition of your culture, so you know which aspects to address, as well as making it easier to track and quantify progress. This requires a lot of resources and a consistent effort to get right, which can be particularly challenging for smaller organisations.
It’s also worth bearing in mind that not all culture changes are suitable or feasible for all businesses. External factors such as legal requirements and market conditions can have an impact on whether a certain initiative would be successful – or even lawful – for your organisation to implement.
The role of employees in improving company culture
Without employees, there is no culture. Employees are responsible for making sure that their behaviours are in line with the organisation’s wider goals and values. This means contributing directly to shaping the workplace environment and influencing how others perceive the company’s identity and mission.
Encourage your employees to actively participate in different initiatives such as workshops, training and development programs, relationship-building exercises and work-led social activities, and support effective communication and feedback at all times. Ensuring that every employee plays a key role in improving the company culture can help to keep them engaged and motivated, which itself offers lots of benefits for your business.
Improve company culture with employee-friendly HR software
However large or small your business, a healthy company culture is essential to ongoing growth and success. While business owners, managers and HR professionals may be in charge of making the key decisions that shape the working environment, it’s the role of everyone at the company to maintain a positive environment.
Despite the challenges associated with it, improving your company culture is a valuable endeavour that can support the longevity and success of your business. HR software is a powerful tool that can help you to monitor progress, track KPIs and manage employee feedback surveys to support your culture initiatives.
To find out more about how PeopleHR can help you to improve your company culture, check out our free demo, or get in touch with us and we’ll be happy to answer any questions you may have.
