Company culture and organisational culture are terms that are commonly used across industries and organisations of every size. Most of us have a general grasp of what this term supposedly means, but the real value of understanding company culture can easily be lost in a flood of social patterns, behaviours, and mindsets that are challenging to define or quantify. Here’s an in-depth look at what this term means, how to determine a company’s culture, and the value of this concept.

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Defining company culture

A company culture is an expression of a core set of values, norms, habits and beliefs. This forms the basis of a unique identity that influences pretty much everything your organisation does. It’s also about what you reward in an organisation be it perseverance, adaptability, creativity or any endless combination of traits.

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Why company culture matters

As challenging as it is to define or measure, company culture is exceptionally important to realising organisational goals. It impacts every aspect of a company, from the big-picture strategy and public perception to how employees go about their daily tasks.

Companies with a positive culture often have more engaged employees, as well as being much more attractive in terms of talent acquisition. According to a recent survey, company culture has taken top priority with job seekers, with 77% of adults saying they consider company culture when applying, and half of the respondents saying a good culture is more important than a good salary.

Similarly, the cost of poor company culture can be severe. In fact, a 2020 report carried out by BreatheHR detailed that almost 27% of employees that quit last year did so due to toxic workplace culture. The result? Losses of £15.7 billion each year.

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How to determine a company's culture

Company cultures are unique and nuanced, and often come to life organically based on goals, market position and the people in positions of leadership. That said, more often than not a positive company culture exhibits the following characteristics:

• Purpose – Employees understand their medium and long-term goals, are unified behind a shared vision and are inspired to be more productive and engaged in their roles.

• Communication – Communication is clear and respectful, with open channels between employees and leadership. Employees are not afraid to speak up and leadership is open to new ideas and information. Finally, discussions tend to revolve around looking to the future and learning from the past rather than dwelling on non-constructive criticism.

• Development – Talent isn’t just hired, it’s nurtured. Career support is available and encouraged, leaders take on mentoring roles, and learning is fostered at every level of the organisation.

• Acknowledgement – Good work and innovative ideas are acknowledged and rewarded, not only through financial rewards but through career progression, words of gratitude, and personalised rewards.

• Diversity – An active strategy and commitment towards embracing diversity and its benefits in a meaningful and respectful way. Tolerance and acceptance of different cultures, norms, and differences are balanced with a drive to bring people together into collaborative teams.

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Different types of company culture

By looking at company culture characteristics, we can further define different types of company culture in a broad sense.

1. Clan culture – These companies see themselves as a united family, brought together by shared values and goals. Here, loyalty and tradition are very important, and there’s a very strong sense of shared identity.

2. Market culture – This is a culture driven by results above all else. It’s a highly competitive, demanding environment often driven by a powerful central personality who sets the tone.

3. Adhocracy culture – Innovative, risk-taking companies with a need for exceptional agility are known for their ad hoc cultures. It’s a culture that is dynamic, driven by creative thinking, and willing to try something new - even if it doesn’t always work out.

4. Hierarchy culture – Here, rules and procedures take priority status, and there’s a clear commitment to doing business a certain way. This is not a culture that is open to creativity and risk-taking and is usually found in industries with high regulation and safety requirements.

Getting to understand and strategically transform your company culture is no easy task, but the right tools and technologies can simplify this essential process. At Totem, our company culture platform works with employees at every level of your organisation, delivering in-depth Culture Insights, whilst also providing a dedicated culture platform for employees to socialise, connect and recognise success.