The Importance of Organisational Culture

Defining Organisational Culture

Organisational culture is a shared set of beliefs, values and behaviours that influence both how people within an organisation think and behave but also the decisions and direction the organisation moves in. 

These shared values will influence people within your organisation and regulate how they behave. Every organisation will create and develop its own culture. This will provide boundaries to ensure everyone acts in a way that mirrors the company values. All employees need to understand this culture if they want to be successful.

Matt Phelan, author of Freedom to be Happy (and our Co-Founder and CO-CEO) reminds us that culture and branding are innately linked. He believes it’s a myth they’re separate things. Your culture is your brand! This is because your people are the biggest asset of any organisation. 

Here at The Happiness Index, we believe organisational culture should be determined and built on by everyone within the organisation, rather than taking a top-down approach. Every organisation is different based on the diverse group of people within it and its culture should reflect this. More on understanding culture here.

The 7 Characteristics Of Organisational Culture

It is widely accepted that organisational culture has seven key characteristics. Every organisation will value each of these characteristics, which, when combined, will define the organisation.

Neuroscience tells us that four brain systems dictate how we think, feel and behave. We all use each of these brain systems to varying degrees. Similarly, each of the seven characteristics of organisational culture will be more vital than others to different organisations. 

So let’s look at the seven characteristics of organisational culture and how they might manifest in your workplace:

1. Innovation

Companies that value innovation will encourage their people to be brave and take risks. This will empower people and inspire them to think creatively. Companies that do not value innovation will have set guidelines and practices that must be adhered to. This links closely to the neuroscience theme of clarity, and in particular ideas or requirements.

2. Attention To Detail

This dictates the level to which employees are expected to be accurate in their work. For some organisations, attention to detail is key to success. Financial organisations and law firms are prime examples of this. A culture that places a high value on this will expect its employees to undertake their duties with precision. A culture that places a low value on this will adopt a “fail fast” mentality - which places emphasis on trying new approaches. This often links with personal growth and how people prefer to be challenged within the workplace. 

3. Outcome (Results)

Companies that value outcomes will focus on results above all else. They will strive for results by any means necessary. In contrast, other organisations will consider the wider impact of their work and strive to ding things in 'the right way'. Here we will see that some people will be more instinctive while others will be more reflective. The instinctive-leaning may prefer an organisational culture that prioritises results. The reflective-leaning will prioritise values. More on this later...

4. Relationships

Organisations that value relationships will be focused on building a culture where people work collaboratively and feel supported by their managers and leadership teams. Conversely, others may have a competitive mindset and have a more hierarchical structure that prioritises more formal or financial motivations. Relationships feed directly into the emotional brain style and how important this is to a team will depend on their predominant brain type.

5. Values

Values are something every organisation will have… however - for some organisations values such as fairness, doing the right thing, and supporting environmental or sustainable societal actions will be more important. For others, this will be less of a priority and - instead - they will focus more on other organisational culture characteristics. Organisations that place more emphasis on values may have more reflective people within their teams.

6. Freedom

This characteristic looks at whether organisations give their employees the freedom and autonomy to work when, where and how they like! Organisations that don’t prioritise freedom may have more rigid processes and structures. Freedom is linked to the instinctive brain system. 

7. Stability

A company that encourages stability will be administrative and rule-orientated. It will focus more on outputs and processes than growth. Companies that do not value stability will regularly adapt their processes and practices. The former may have more people with a predisposition to reflective brain types, while the latter may have more instinctive individuals. 

The Importance Of A Thriving Organisational Culture

“Customers will never love a company until the employees love it first.”

- Simon Sinek

A strong organisational culture will ensure that everyone aligns with the company’s values. This will positively impact every part of the business. It’s impossible to understate the importance of a strong organisational culture in creating an environment where employees can thrive and do their best work. Neuroscience shows that when an organisation is aligned with the brain systems of the people who work there, they’ll not only be happier but also more engaged. 

Here are some ways organisational culture can improve business:

1. Identity

An organisation’s identity is underpinned by its culture. The processes and values of an organisation will contribute to its brand image. Employees, customers and the public will all have their own perceptions of your organisation. This is largely determined by its culture.

2. Onboarding

A company with a clear organisational culture will easily be able to align new starters with the company’s goals and values. They will have a clear set of practices and beliefs. This will encourage new starters to adhere to their processes and rules of engagement.

3. Loyalty

If your employees view themselves as part of the culture, they will make decisions for the greater good of the organisation. It will also ensure your people will remain loyal during periods of organisational change and won’t consider jumping ship.

4. Direction

When your people are aware of the company goals and vision they will have a clearer sense of what is expected of them and why. This provides everyone with direction, which will keep your people on-task.

5. Unity

Strong organisational cultures create a sense of community and cohesion. This will help to unite all your people. This will promote better communication, thus improving collaborative projects and reducing conflicts.

Creating A Thriving Company Culture

Even the best company cultures still have room for improvement. If organisational culture is not on the agenda, or you don’t continue to grow your culture then you risk both retention and recruitment declining.

Investing time, energy and effort into your organisational culture will support efforts to increase retention rates by creating a supportive environment where everyone can achieve the best of their potential. 

There are some key areas you can look at to help create a thriving organisational culture. It’s also important to consider the neuroscience themes that drive people at work and think about how you can incorporate them into your culture strategy.

Safety, relationships, freedom and acknowledgement are all key for a happy workforce whilst meaning and purpose, clarity, personal growth and enablement all build employee engagement.

We’ve written a whole article on creating organisational culture, but here are a few tips that we feel are important for any thriving work culture:

1. Listen

It is vital to listen to your employees and create a dialogue with them. By creating an environment where your people feel comfortable enough to reach out – you will promote honesty and transparency. This will help you to learn how everyone is feeling, so you can remedy concerns and build on successes. Consider an always-on listening tool such as our Employee Voice for open, honest feedback whenever your people need to communicate.

2. Empathise

Empathy is a vital skill for any leader that wants to understand, motivate and recognise the achievement and effort of their people. Our global study of workplace happiness placed ‘feeling recognised/valued’ in the top spot, which demonstrates how important it is for the modern employee to feel valued and understood.

3. Communicate

This comes hand-in-hand with listening. Clear communication means sharing your thoughts, plans and targets whilst accepting open feedback. Talking to your people regularly will ensure your people feel motivated, valued and engaged. Putting systems in place where your people know how and where to contact you will help you accurately gauge how they are feeling, whilst creating two-way conversations. This will highlight what needs to stop, start, change and continue to improve culture and ultimately profits. We’ve addressed this important need in our engagement platform via our ‘closing the feedback loop’ tool, which allows completely anonymous conversations and feedback to concerns through the platform.

4. Empower & Trust

It is impossible to know everything that goes on within your organisation. It is therefore essential to trust your workers and empower them to make the right call. This may seem quite daunting to some, but the benefits for your organisation and its culture are huge. Manish Goel, from computer software company Aerospike Inc, says “It is important for the entire company to know that they are an integral part of the company’s success.” Before adding, “Control outcomes, not behaviours."

A thriving work culture promotes community and provides a platform for everyone to contribute to shared goals. When done correctly, it will breed a culture of trust, engagement and productivity. This will make your organisation a better place to work, which will improve retention, recruitment and profit.