In the sections below, you’ll learn what organizational culture means, why it’s important, and what benefits it provides.
Ask anyone, ‘What is organizational culture?’, and you’re likely to get a variety of answers. This is why an organizational culture definition is critical to understanding the role culture plays in key areas like employee experience and engagement.
Although there may be many potential definitions for organizational culture, it’s broadly defined as the shared vision, beliefs, and values that characterize the people within an organization. Which means, the culture of an organization is defined by more than its mission statement. Put simply, it’s how the people in the organization behave daily.
An organization’s culture takes time to develop, and it is most often shaped by the leaders throughout the organization, but particularly at the top. Many of the most recognizable companies have identifiable organizational cultures.
Some of the key factors that influence organizational culture include:
There are typically three specific cultural traits to an organization, including:
All three combined make up the qualities of an organizational culture.
Organizational culture is important for several reasons. For one, organizational culture is a crucial differentiator for any organization because the culture can have a significant impact on its success and effectiveness. For instance, organizational culture plays a key role in attracting and retaining talent in today’s competitive market.
Leaders often stress the importance of organizational culture and how it impacts employee experience. Sometimes, though, there’s a disconnect between the culture that is presented and the actual culture employees experience. For instance, an organization might say they support diversity and inclusion, but lack tangible evidence to back up their claim. This type of disconnect can impact employee experience and satisfaction.
Additionally, assessing organizational culture is typically an on-going process. It requires getting consistent feedback from employees across the organization.
If there are myriad ways to define organizational culture, then there are nearly as many ways a culture is structured or created. A strong or definitive culture makes it easier to communicate how and what differentiates one company over another.
It’s important to know that an organizational culture isn’t built overnight. Partly because culture develops organically, it can take years to establish a culture. But no matter what size or structure, every organization has some kind of culture.
Developing a culture is essential for any organization since it serves as an identifying structure for current or new employees. Founders often have the most influence over a workplace culture, especially in the early days of a start-up. Once an organization is established, senior leadership carries the responsibility of growing and evolving the norms of workplace culture.
There are several benefits to building or establishing an organizational culture. Recruitment is one of the top benefits of an organizational culture. Having a clear organizational culture will help you:
Leadership plays a key role in influencing organizational culture. In fact, in many cases, the president or chief executive officer sets the tone for how the entire organization will function. Strong workplace cultures with open and effective communication come from leaders who are active in shaping culture. Once a culture is established, employees are also responsible for adopting the culture and maintaining the way things are done at the organization.
Organizational culture will emerge without input from leaders or founders, but the culture that’s created might not be healthy or positive. Even with leader involvement, a culture may not positively impact employee experience if it isn’t supportive in the ways that employees want it to be.
Naturally, an organizational culture can positively or negatively impact employee experience. If a culture is supportive of the ways employees want to work, employee experience is likely to be more positive. Conversely, if a culture is rigid toward how employees want to work, employee experience suffers. A more positive employee experience typically helps with retention, increases engagement, increases productivity and profits, and determines the overall health of your culture.
Since recognition is possibly the biggest driver of employee engagement, it’s beneficial to foster a culture that recognizes employees and their contribution. This can be achieved in many ways, but it is most important and meaningful when leaders play a role in recognition.
Leaders and employees both can actively shape the culture of their organization, creating a positive and more productive environment.
Depending on the organization’s size and the longevity of the company, transforming culture can be notoriously difficult. Sometimes the shared beliefs and assumptions of a workplace culture can become outdated, or they may hinder future growth. However, changing culture in an organization can have a bottom-line impact that makes the transformation worthwhile.
Culture shifts take time to gain traction, particularly in large organizations where a culture is entrenched. However, changing culture in an organization is possible if leaders commit to the change, no matter how long it might take. On average, it takes anywhere from several months to several years to change a workplace culture.
The following are four steps toward culture transformation:
Sometimes, a change in leadership will have a ripple effect on an organization’s culture, particularly if the change at the top is part of the cultural change. Mergers and acquisitions can also present many culture-related issues. In some cases, an acquisition can have a negative impact on company culture. For instance, how easily does the company adjust to a new culture?
Ultimately, it’s important to remember that organizational culture plays a crucial role in every organization’s success and effectiveness.
Find out more by reading the e-book, Create a Holistic Employee Experience, to explore how customers are using EXP platforms to improve employee experience, or by exploring Microsoft Viva, an employee experience platform that supports connection, insight, purpose, and growth, empowering people and teams to be their best
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