Employer Resources

How to create a healthy company culture and why it’s important  

A survey by PricewaterhouseCoopers found that 72% of managers and employees think a strong culture is an essential part of making successful changes in a company. Meanwhile, 69% say culture helps companies adapt operationally in response to challenges, such as the COVID-19 pandemic.  

Company culture can also bring other advantages, such as getting employees to buy into the company’s mission and fostering a sense of community among workers. These traits can improve employee engagement, maintain high morale and performance and convince talented workers to stay with the company longer.   

These benefits can be positive for any company. The question for many in management positions is how to build a strong company culture that employees and leadership can embrace.  

Understanding corporate culture 

The Harvard Business Review explains that company culture “expresses goals through values and beliefs and guides activity through shared assumptions and group norms.” It supports the firm’s strategic plan, which offers “a formal logic for the company’s goals and orients people around them.”  

In other words, corporate culture connects company personnel to each other and the overall mission and goals of the firm in a tangible way. Culture focuses on personal connections instead of focusing solely on the strategic and logical aspects of operations.  

Company culture is an integral part of overall performance, and it can play a significant role in the pursuit of strategic aims. Strong company culture is essential to employee happiness. Qualities like non-judgmental co-workers, supportive management and executives who buy into the company mission instead of seeking self-promotion are essential to a positive workplace.   

As the PricewaterhouseCoopers survey found, strong culture and the benefits it brings can positively affect performance and the pursuit of company goals. Culture can help employees remain engaged when issues arise or things do not go according to plan.  

For example, if a company needs to set up a remote office, as commonly happened during the COVID pandemic, strong company culture can make the adjustment possible and help employees maintain performance even with less oversight.   

Why is corporate work culture necessary?  

For employees, a strong corporate work culture can do more than make a company a nice place to work. It can also set the stage for professional and personal development. Companies with employee-centered or team-based cultures will often provide training and experience opportunities that allow workers to grow professionally and take on new roles and challenges.  

Understanding what company culture is and how to assess it during the job search can be important for your career prospects. Also, it can help you find a company that shares your values and goals.  

For example, firms that make social change or diversity and inclusion priorities could potentially attract job applicants who also consider these issues important. Employees may find more personal value in their work if they understand that their efforts could impact society and the quality of life for others instead of just bringing more profits to the employer and shareholders.  

Three common corporate culture models 

Strong corporate culture can benefit a company, improve worker performance and retention, help employees feel more connected to their employer and their peers, as well as offer opportunities for personal and professional development.  

There are several different models for fostering a positive company culture. Here are three of the most common.  

The McKinsey 7-S framework model 

The McKinsey 7-S framework is a model for organizational change. It introduces new practices, culture and processes around seven areas:  

  • Structure  
  • Strategy 
  • System  
  • Shared values  
  • Skill  
  • Style  
  • Staff  

All the elements connect to shared values, which is the most essential element in the company’s shift. The company’s culture directly affects and expresses its values and guides the behavior and priorities of employees. 

For example, culture affects the skills and staff portions of the model. The skills and staff portions focus on motivating workers to gain new skills and attracting those who will share the company’s new values.  

The McKinsey 7-S model is ideal for companies needing to make significant structural changes, such as tech companies that need to adjust to stay competitive. Or established companies that need to streamline their management structures.  

Cultural iceberg model 

The cultural iceberg model operates on the assumption that basic, visible cultural elements are connected to deeper traits that ultimately define the overall culture. Visible elements may include:   

  • Dress code  
  • Employee benefits  
  • Tech use  
  • The tone of communication between employees and management  

The hidden elements, just like the underwater part of an iceberg, include: 

  • Communication  
  • Professional development opportunities  
  • Values  
  • Decision-making  

Once they understand this connection, company leadership can find areas of deficiency and make improvements that involve the root cause of the issue, rather than focusing on surface changes that do not deal with the underlying problem. 

Companies that want to improve on their existing company culture can consider this method as a way to define actual issues and make lasting changes.  

Hofstede’s model  

Hofstede’s model can be applied to countries, organizations or other entities, including businesses and even families.  

Hofstede’s philosophy has several applications in the business world. In addition to helping companies understand their customers, it can also provide insights into the root causes of employee behavior.  

For example, Hofstede requires assessing the value placed on individualism versus collectivism to help managers understand whether their employees are focused more on company goals or their own success. It also measures the level of uncertainty employees are willing to accept. Uncertainty could affect whether employees are willing to take risks and make suggestions or whether they avoid these potentially helpful steps because they fear punishment or admonishment for doing so.  

How to improve company culture 

The models all focus on defining and changing elements that can actually bring about lasting improvements to company culture. Here are five ways to help bring the desired cultural changes to a company.  

  • Define company values: Some companies try to create a positive work environment, but they do not have well-defined values. Make sure decisions, policies and practices fit within the framework of your values.  
  • Promote professional development: Professional development opportunities can  help employees earn the skills they need to play a bigger role in the company. Encouraging or offering to pay for professional development courses can help employees feel like valued members of the organization rather than cogs in a wheel.
  • Reward desired behaviors: Managers can recognize or reward employees who adhere to company values or exhibit positive behaviors.  
  • Have positive interactions with employees: Employees who feel respected and valued may feel more likely to invest in their company’s mission and buy into their long-term plans. In addition to constructive communication, managers can also be sure their employees have the necessary information and guidance to complete tasks.  
  • Define positive aspects of current company culture: Some aspects of company culture might already be positive and already support goals and shared values. It is essential to define these and avoid changing them.  

With well-defined values, a clear mission and an accurate picture of current culture, a company can effectively improve culture.