What unites your traditional office workforce with your remote team distributed around the world?
What connects your local headquarters with your growing international operations?
What makes employees who have only seen the CEO on their computer screens for the last 12 months continue to feel motivated to achieve that leader’s vision?
In a word, culture.
As companies become more and more decentralized, your culture has to be strong enough to keep a diverse and dispersed group of workers focused on a limited set of key tasks. This is the four-step process I’ve used in my career as a serial executive to rebuild broken cultures into powerful engines for transformation and exponential growth.
In this guide, I’ll cover the importance of building company culture, explain how to build a great company culture, and provide four strategies to strengthen organizational culture so you can align your team and create a team that backs your company’s mission and values.
What does organizational culture mean?
First and foremost, let’s define what organizational culture means. Organizational culture consists of the values, beliefs, and practices that team members follow. Organizational culture also dictates how team members carry out tasks, how important decisions are made, and how people within an organization should act.
However, it’s important to note that organizational culture differs from business to business. It’s up to the executive team and senior management to define company culture and make it happen, which will be discussed further down in this guide. Only when an organization clearly articulates its culture is it possible for it to come to fruition. So, why is organizational culture important? Let’s discover in the next section.
Why is organizational culture important for businesses?
Building company culture is important for a multitude of reasons. As you know, organizational culture consists of the beliefs and values of a company, and these principles help guide the key decisions that are made on a daily basis. Take a look at some of the top reasons why businesses should focus on creating a company culture that promotes growth:
Higher employee retention rates
Employee turnover can be detrimental to any business. In fact, high turnover can be costing your company thousands of dollars in wasted productivity. One of the top reasons employees decide to leave a company has to do with culture. If a worker finds themself in an environment that isn’t inclusive, is toxic, doesn’t promote growth, or doesn’t align with their personal values, they’ll be inclined to leave.
By building a culture with a defined mission and core values that support employees, you’ll create an environment where your team is motivated to show up every day. Rather than wasting time and money on the recruiting, hiring, and onboarding process, place that time and money into building a culture that keeps employees on board.
Increased employee engagement
Especially in the age of Zoom, employee engagement can suffer. Working from home without any face-to-face interactions with coworkers can make it challenging for employees to feel connected to their employment, and this lack of engagement can make it hard to build a culture that inspires staff.
An organization that’s driven to succeed will create a culture that gets employees involved. This is because with clear expectations, employees will know what’s expected of them and the goals they can achieve, which will inspire them to show up with their A-game and interact with others to produce positive results.
Improved recruitment abilities
If there’s one thing the last several years have shown us, it’s that employees know what they want out of their career. The COVID-19 pandemic has shown workers across the globe how important it is to have a company that cares about them, and if job seekers find companies with high turnover and low morale, it might signal red flags that will encourage them to look elsewhere. In turn, you could lose out on top employees who can take your business to the next level.
By building organizational culture, you’ll be able to attract top talent and improve your recruitment efforts by showing why your team enjoys showing up day after day. No one wants to spend half their day in an office with a less-than-ideal culture. Rather than hiding your culture, show job seekers how great it is to work in your company, and you’ll create a strong impression that helps you build the best team.
Heightened productivity
Another value employees respect is productivity. The last thing they want is to work for an organization with a culture that’s distracting and doesn’t fuel their career. As an organization, it’s important to focus on employee needs while also fostering organizational growth.
So, how do you build a great company culture that promotes productivity? Take care of your employees. This means giving them competitive benefits packages, creating structure in the workplace, and recognizing their hard work. In turn, they’ll have more job satisfaction, which leads to greater productivity.
Optimized work-life balance
A positive work environment recognizes the importance of creating a healthy work-life balance. Not many employees would like to find themselves working endless hours rather than spending time with friends and family or accomplishing personal goals. Building a company culture means respecting boundaries and not overworking your staff. Some tips for work-life balance include communicating boundaries, providing staff with ample sick, vacation, and medical leave, and lastly, investing in your organization’s culture.
Stronger brand reputation
Your brand is what people know you by, which is why organizational culture is important. You don’t want your brand to be associated with toxicity or not treating your employees well. Organizations with a positive company culture have stronger reputations, which can pay off tremendously. Customers enjoy shopping from and interacting with brands they respect. Showing the public you value your employees will encourage consumers to go after your brand than your competitors.
Better onboarding
Training new hires can take a lot of time and money, as it requires a calibration period for new staff to get up to speed through training, orientation, and learning new skills. However, new hires have also put considerable time into the culture they want to work in, which is why the onboarding process is crucial. By creating an onboarding process that helps new hires seamlessly transition into their new roles, it will boost company loyalty and longevity, which will pay off in the long run.
Employee well-being
A positive work environment also fosters the well-being of your staff. A toxic work environment can drive your employees away, as it can lead to increased stress and decreased job satisfaction. By looking after your staff’s well-being, they’ll feel valued and respected, which will encourage them to be more productive and innovative. An environment with human empathy won’t jeopardize an employee’s mental and physical health.
This also has plenty of benefits for CEOs and the executive team. In an environment with high job satisfaction, there’s less to worry about as a leader, which can help avoid burnout. For more tips to keep your own job satisfaction high, review our blog that outlines our four strategies to prevent CEO burnout.
What Steps Can an Organization Take to Improve Its Culture?
Now that you know why organizational culture is important, what steps can an organization take to improve its culture? There are several ways you can create a positive work environment that’s inclusive and fosters the growth of all your employees. Take a look at our four strategies to strengthen organizational culture below.
Strategy #1: Agree on what “culture” means.
I loosely defined what organizational culture means, which are the values, beliefs, and practices your team follows. The rest of the definition is up to you. However, the hard part for most organizations is defining exactly what culture means to them.
A common problem I’ve witnessed at companies with weak cultures is that the CEO and their leadership team can’t clearly articulate a definition of culture. If I bring up the topic with a struggling entrepreneur coaching client, I’ll hear things like, “We want everyone to feel like family,” or “We always put the customer first.” Those are nice ideas, and important even. But when top companies think about culture, they’re digging much deeper than that.
The best firms have established a set of shared values, goals, attitudes, and practices that characterize “how we do things here.” In essence, it is about what behaviors and rituals are hard-wired into the fiber of the organization. Everything from the office dress code to how the company approaches hiring decisions stems from these cultural principles and the best practices the company sets to reinforce them. Your culture influences the way your employees feel about the work they do, where they see the company going, and what kind of effort they’re willing to put in to reach that destination.
If you’re wondering how to define your organization’s culture, there are a few steps you can take. To get started, think about your “why.” Why is your organization here? What’s its purpose? What are its goals? Knowing your “why” can help you set the behaviors you’re looking for to succeed, which will translate into your organization’s culture.
From there, define your core values and what your company believes in, then create a strong foundation built on these values. You don’t want your organization’s employees to define your culture. Instead, you want a culture that attracts employees who easily integrate into your culture and carry out your mission.
Strategy #2: Analyze your current culture.
It’s hard to imagine a successful CEO saying, “Our company’s culture is 100% financially driven” or “I want a culture where one half of the company blames the other half for every problem.” And yet even some of the biggest companies in the world experience these cultural issues.
In high-flying success or serious crisis, what is or isn’t working in a company’s culture might be obvious. Otherwise, it might not be that obvious to see what cultural issues are preventing the company from taking its next BIG leap. These firms might benefit from understanding their employee net promoter score and putting the company’s culture under a microscope through anonymous polls to their employees.
For example, Eastman Kodak was for years in a downward spiral of business results and no one seemed to know “where’s the bottom.” This led to a potentially fatal identity crisis. The film traditionalists and the digital innovators were endlessly pointing fingers as to which side of the divide was to blame for the company’s struggles. This distrust and insecurity permeated every level of the organization. It negatively impacted both anxious employees and confused customers.
At Goodyear, the company was lagging behind in the most profitable segment of the market. Although a market leader, the results were considered “unpredictable” and consumers were indifferent to the category and brand. I saw a company with a clear “top-down” decision-making culture that relied on past successes, rigid hierarchies and layers of compliance that hamstrung employees from taking real ownership over their work.
And at International Meal Company (IMC), concerns about negative same-store sales, sagging profits and stock prices had completely overshadowed the need to excel in the core business drivers of food quality and service that were causing this drag in the first place.
What is the common theme from these examples? A weak company culture. This means it’s time to analyze your current organizational culture. Follow these steps to determine where your organization’s culture stands so you can determine where you want to head next:
- Get an outsider’s view: As a CEO, it can be easy to be biased, especially when it comes to your company’s culture. To start, get an outsider’s view who has no connections to your organization to get an understanding of your current work environment. This can be a coach or consultant, for example. From there, they can inform you about their own observations to give you a clearer view of where your company culture stands
- Conduct culture surveys: Another tip to assess your organization’s culture is conducting culture surveys for your staff to fill out. Through culture surveys, you can ask important questions for better clarity, such as, “How do people treat each other?” and “How does the layout of the workspace affect your work?”
- Perform a walkthrough of the company: It’s important to make observations on a typical workday to assess how employees interact with each other, how the space of the company is laid out, and what emotions are present at any given time. Making these observations can provide insight into how your employees feel working at your organization, whether good or bad.
- Conduct interviews: One way to build trust and increase transparency is by conducting interviews with current staff. During these interviews, which can either be individual or in small groups, ask how they view your organization’s culture. You can ask guiding questions, such as, “Would you refer a friend to work here?” or “Is there anything you would change about the company?”
Through these steps, you can get a better understanding of where your organization’s culture stands. After a thorough assessment, you can take the necessary steps to begin redefining your culture to achieve the results you want.
Strategy #3. Identify the results you want.
Another key component of building company culture is identifying the results you want. Employees want to work for an organization that’s structured and has a clear vision. This all starts with your motive and your “why.” To identify your results, think about the problem(s) you’re trying to solve with your organization. Is there a gap in the market? Has it never been done before? Knowing your reason for business can help you determine what you want to achieve.
After you’ve defined your motive, you’ll be able to list out the results you’re looking for. Is it to tap into a new market? Are you looking to increase your profits? With your end goal envisioned, you’ll be able to build a company culture that’s motivated to help get you there.
Often, there is a disconnect between what a company thinks it’s doing to achieve desired results and what it’s actually doing. Kodak, for example, believed it was in the business of selling the means to take and process pictures. In reality, Kodak’s consumer business was about storytelling, by capturing and sharing memories. Ultimately, this lack of alignment drove the inability to transition beyond its traditional “device selling mentality” – despite creating the world’s first digital camera in 1975.
We needed to revert the several-year profit downward spiral into an economic balance. To that end, I wanted to create a united culture that would allow us to manage the inevitable decline in film sales while also growing our digital business profitably.
At Goodyear, we wanted three things. First, to win and be a leader in the most profitable market segments. Second, to earn the right to a sizable investment to upgrade our manufacturing park. And last but not least, to position ourselves as a dynamic challenger company with a rich history that was still innovative and whose products were still the best in the industry.
For IMC, we wanted to create a company that delights its guests with delicious food and service with passion. The desired result was to double the share price and allow the private equity a successful exit.
An effective culture should make your key stakeholders feel good about working for you or buying from you. But, more importantly, that culture should be pointed towards specific, measurable results.
Strategy #4. Align your culture and the results you want to achieve.
Now that you know what you want to accomplish, you and your leadership team can start building out the how and making everyone accountable to deliver.
And this is how the stories unfold… At Kodak, we focused on the most critical five specific and measurable strategies and created a “play to position” playbook. This unified the team and within a year brought the company back from the cliff’s edge and added hundreds of millions of dollars to the bottom line. We achieved every single success metric we targeted and the so desired economic equilibrium, with a five-year streak of profitability and a leading digital business prolonging the livelihood of the company.
At Goodyear, we created a challenger culture of innovation and employee engagement. We trained all 6,000+ employees on why we needed to change and the importance of operational excellence. We hardwired innovation and execution discipline into the company’s processes. Within three years we earned the badge of “Best place to work” and with that, we were awarded $1 billion in upgrading infrastructure, team members, and product lines. We became leaders also in the high-value-added segments while receiving broad market recognition for innovation.
At IMC, we simplified our strategy into one-page building blocks and empowered team leaders to take ownership over getting those blocks stacked up. We also narrowed our focus to a smaller group of key metrics that we tracked on accountability visual dashboards, with a culture of fail small, fail fast. The result? We were awarded “The best turn-around story of the year” by a prestigious bank, we ultimately doubled share price behind same-store-sales growth, and we received rave consumer reviews for our innovations.
These are all examples of how to align your culture to achieve your desired results. So, how do you get started? It starts with building a concrete plan.
Like the examples above, you need to identify any problem areas within your organization that are taking away from your company’s culture. From there, you’ll be able to outline a series of steps to achieve alignment and get your entire team on board. With a team that’s invested in your company’s success, you’ll be able to turn your organization around and get back on track.
Accountability is a particularly important cultural value for any CEO to consider. Any size company can create a culture of accountability with simple steps like setting clear expectations, improving your company’s meeting rhythm, and coaching your leaders to bring out the best in every employee.
To successfully navigate the unprecedented challenges of the last year, CEOs had to be flexible and adaptable. Culture, however, is one of those non-negotiables that transcends where your people work or where you’re reaching your customers. Centering your company around your bedrock values and practices will help you complete this pivot stage of your journey, keep innovating, and keep growing.
Key takeaways: What steps can organizations take to improve company culture?
Building company culture can be an uphill battle, especially if you already find yourself in the trenches. However, there are plenty of steps you can take to create a positive work environment. Using our guide, you’ll be able to take the necessary steps to align your culture with your organization’s values. From defining what culture means to you to analyzing your current culture and identifying the results you want to achieve, these are the steps you can take to improve your culture.
At CEO Coaching International, our professional executive coaches can help you redefine your organization’s culture. Through our executive coaching services, you’ll be paired with a coach with decades of experience to help grow your business, develop your people, and achieve your own personal and professional goals.
Our one-on-one personalized executive coaching is customized to your specific needs, so you can get the results you want. Contact us today to see how our executive coaches with real-world experience can help you overcome the challenges of being a CEO.
Jaime Cohen Szulc is a coach at CEO Coaching International with extensive experience launching transformational strategic initiatives, achieving operational excellence and turning failing divisions into growth engines. He has managed from $20M to $4.5B businesses and up to 12,000 employees. He has served in roles including CEO, President, CMO, COO and Chairman in his 30+ year career at firms including Goodyear Tire & Rubber Company, Levi Strauss, Eastman Kodak, and International Meal Company.
About CEO Coaching International
CEO Coaching International works with CEOs and their leadership teams to achieve extraordinary results quarter after quarter, year after year. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 1,000 CEOs and entrepreneurs in more than 60 countries and 45 industries. The coaches at CEO Coaching International are former CEOs, presidents, or executives who have made BIG happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $10 billion, and many are founders that have led their companies through successful eight, nine, and ten-figure exits. Companies working with CEO Coaching International for two years or more have experienced an average revenue CAGR of 31% (2.6X the U.S. average) and an average EBITDA CAGR of 52.3% (more than 5X the U.S. average).
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