Company culture is defined as the beliefs, behaviours, and actions that determine how a business and its employees interact with each other and their customers. What are the signs of a good company culture? What can you do to tackle a toxic culture?
Culture is a critical and often overlooked component that can highly influence the success or failure of a company.
A positive company culture is supportive, innovative, and encourages employees to interact honestly and ethically.
A bad company culture swings too far to one extreme on issues like risk, belittles employees, and ultimately exposes the company and its boards to serious legal or financial jeopardy.
If you are a board member of an organisation, you must understand the signs of positive company culture and work to improve culture as part of your business strategy. Doing so can increase the business’s success and lead to higher employee satisfaction.
How do you know if your company culture is good or bad?
An honest and regular evaluation of company culture must be a critical part of any board’s strategy. This approach requires a real investment of time, energy, and resources.
A first critical question is this: What is your company culture?
- Can your board name what the culture is and what you want it to be?
- Can the chief executive describe the culture?
- How does this culture translate to employees, and what values are most critical?
- Do employees even know the answer to this question?
The simple truth is that all parties involved must understand the most crucial part of your cultural strategy. If they aren’t interested, there is no culture, which can be dangerous.
Many of the answers to these questions can be determined by honest surveys of customers and employees. Depending on the size of the business or non-profit in question, you may want to bring in an outside company or conduct anonymous 360 evaluations. Ask individuals you are surveying tough questions:
- What is the company culture here?
- What are our values?
- Do you view this as a positive or a negative?
Finally, some indicators make it clear you have a company culture problem.
- Are employees working hard or slacking off?
- Are they gossiping?
- Are customers happy?
- Is new business regular or irregular?
What are the key signs of a good company culture?
Many indicators can help you determine if a culture is succeeding or failing. For example:
- What attention are the business’ executives or board paying to company culture? Can they even tell you what their core values are? Can employees?
- What is the employee satisfaction within the business in question? Is there a high turnover rate, particularly when compared to others within the same industry?
- Likewise, what is customer satisfaction within the business? What is the rate of churn? Are customers generally happy with the business, at least when compared to other similarly situated industries?
- What checks are in place to ensure honest and ethical behaviour? How often are there legal compliance checks, financial audits, or examinations of employee satisfaction? Good company culture is not afraid to answer tough questions. Boards that find this is not the case have serious work to do.
What can be done if you have a toxic culture?
Repairing a toxic culture can be difficult for any company or board. Fortunately, it can be done.
First, a part of any board’s strategy is to identify the chief promulgators of the toxic culture. Where is this bad culture emerging? Is it the board’s fault? The CEO’s fault? Can the individuals in question be rehabilitated, or is it time to cut ties and move on? Once those issues have been identified, some tough decisions must be made.
Likely, a toxic culture cannot be replaced without serious outside intervention. If this is the case, a board or business will have to identify outside vendors to come in, identify problems, and develop an action plan that can supplant the cultural issues in question with more positive values. This strategy will likely take extensive work and cooperation from employees who are genuinely dedicated to the company’s mission and want to improve the company culture.
Ideally, these issues will not require such wholesale changes, and in many cases, they may require tweaks and improvements. A business must prove to its employees and customers that they are dedicated to improving its company culture and leading from the top. If attitude changes need to be made, it has to start with management and boards, who must lead by example. Once trust has been built — or rebuilt — a business can begin to meet with employees and learn more about how they can continue to incorporate company cultural improvements into their overall strategy.
Finally, a business needs to be open and honest about the issues that plague the company. Improvements in company culture and employee satisfaction can’t happen without transparency and honesty. These two cornerstone values must be infused into your company culture, and these changes have to start at the top.
Fortunately, resources can help you identify cultural problems and implement concrete plans to improve your toxic culture and save your business.
Interested in learning more about company culture? Have a read of our free ebook ‘A fish rots from the head – a board member’s guide to company culture’. Click on the link below.