The story of the Theory of Universal Gravitation, developed by Sir Isaac Newton, claims that Newton was sitting in his garden one day when an apple fell from a tree and hit him on the head. Because the apple fell, instead of, say, floated away, Newton realized that a force must have acted on the apple to make it fall. We observe gravity everyday when we don’t float off the planet and into space, or when we can barely drag our body out of bed in the morning because it feels heavier than a freight train.
And even though we experience the effects of gravity every single day, we can’t observe the actual force that is gravity. In fact, Newton’s Theory of Universal Gravitation is just that; a theory. Somehow gravity is intangible and unobservable, but at the same time we are acutely aware and experience the effects of gravity every day.
Still today there is no hard scientific law that explains gravity. Yet we can’t argue against it. Not when you just watched your coffee slip from your hand on your morning commute and–in slow-motion–spill all over your brand new tie.
Like gravity, the term “company culture” is often thrown around and we all have some idea of what it means. By no means is company culture a Law, but we still observe its affects everyday in the workplace.
And like gravity, company culture is intangible. The culture of an organization is the invisible force that makes successful businesses. Because it is hard to observe, culture is often ignored or misunderstood by companies, though it generates more ROI (through engagement, employee happiness, and retention) than almost any other aspect of a company.
But what is culture exactly? And why does it matter?
Unlimited parental leave, free gourmet meals, and travel stipends are all nice perks some companies offer their employees. And yes, employees do enjoy these perks. But the culture of the company is more than just perks, in fact the simple offering of perks is revealing of a company’s culture, but they don’t tell the whole story.
What is culture? Company culture is the personality of the company. It includes a variety of elements like work environment, company mission and values, ethics, goals, and expectations. Culture is how your company represents itself everyday, how the employees act, how you market and sell products. Culture is the soul of a company.
Culture matters, a lot. A positive company culture is key to sustaining employee happiness, enthusiasm, and engagement. Trust me, you want your employees to be engaged. Disengaged workforces cost companies $450B in lost productivity annually. Disengaged employees are more likely to leave for a better position, too, or at least a position that they believe will fulfill them more.
You may be thinking, “but I pay Ryan x amount to do his job, is that not enough?”
In short: no.
95% of employees say culture is more important than compensation. And millennials especially are attuned to the nuances and importance of Culture. In one poll Millennials responded that they would rather work for a company with good culture that aligns with their values for $40K annually than a job they find boring for $100k.
The first step to understanding how your culture is affecting your employees is to understand what your culture is. Some companies already have a firmly established and well regarded culture. But for newer companies, or companies who want to reexamine their culture and make meaningful changes, it helps to start by defining your company’s core values and developing a mission statement.
Your organizational values aren’t just words on a poster or website, they must be an edict the entire company embodies, every employee from senior leadership down to entry level workers. Like when you can tell a politician makes a promise she never intends on keeping, or claims she values what you value, even when her lifestyle and actions reveal her true values are much different and often times conflicting. You can sense this, and on some level it probably causes a fair amount of cognitive dissonance.
In the same manner, employees know when a company claims their values are one thing, but ignore or disregard them in everyday practice. This can cause dissonance amongst employees who joined the company because of its core values, which may lead them to leave.
Once your core values and mission statement are established, the next step is to align everyday tasks and larger goals with the company mission.
If you’re SpaceX and you have a stated goal of sending humans to Mars, most people working for you probably share the same values or believe the mission is important. A programmer who knows the lines of code she is writing will affect a ship’s ability to retain oxygen will be more engaged than if, say, the lines of code she is writing are meant to automate Elon Musk’s coffee maker.
Employees who understand their work is part of something bigger feel more connected to their tasks and are more likely to take pride in their work and want to do their best.
A successful company culture will enlist, empower, and encourage employees to OWN the company culture. Employees will inevitably become ambassadors of the company they work for, whether for good, or bad. If your organization doesn’t align its actions with its stated values employees will reflect and relate this to people they interact with. This can damage the company brand in the eyes of customers and potential employees.
The inverse of this is the positive ambassador; employees who work at a company with a culture they relate to, appreciate, and own. These employees can’t stop talking about how much they love their job, how great the organization is, and how everyone should work or shop there.
A happy, engaged workforce will represent your company in a positive light for the entire public to see. Thus, a correctly executed culture initiative becomes a powerful marketing and branding play, but only if done correctly, with honest intentions and openness.
Any real movement toward establishing your culture requires organization-wide buy in. And it has to be more than perks. Perks can improve employee happiness and engagement as well as enhance the physical work environment. But a company that considers their culture to be about perks runs the risk of attracting employees who prioritize the perks over the values of the organization. These employees can be toxic, and negatively impact their co-workers.
When an employee’s values don’t align with the organization, their loyalty and commitment to success will suffer as a result. A decision to hire an employee who fits the company culture over one who doesn’t, but who has slightly more experience, is a cultural play that companies like Zappos are beginning to adopt. A less experienced employee who fits your company’s culture is more likely to stick around for years to come. They can grow into their position and develop while at the same time enhancing company culture and becoming a positive ambassador for the organization.
Establishing your culture and orienting new hires into it starts with onboarding and continues into other HR processes. It is important to make sure HR processes align with your culture as HR will be the first department new hires interact with. Starting off on the right foot can set the standard of expectation for the employee’s experience working for your company.
Positive culture leads to happy (read: productive), engaged employees who stay at your company longer, contribute more, and acts as ambassadors to potential applicants and customers. Employees who fit company culture are more likely to be happy, and happy employees are shown to be up to 31% more productive.
Culture is also a self-fulfilling cycle. If your company has a positive culture your employees will be more engaged, which leads to a better product and reputation, which leads to greater success, which enhances the company’s ability to attract top talent, which helps the product.
Remember that culture is more than perks and upbeat mantras, more than pep-talks and half-bought initiatives. Establishing culture sets a tone for what employees and customers can expect when they work with your company.
A positive culture creates a gravitational pull around your company. The better your culture the more positive people’s perceived experiences with your company will be, those positive experiences will generate more positive expectations of your company, and when you continually meet and surpass those expectations it leads to more positive outcomes.