What Company Culture Is, What It's Not, & Why It Matters

Nov 29, 2023

Read any job description, employee handbook, or corporate leadership piece, and you’re likely to see one buzzword appear over and over again: “company culture.”

It’s clear that companies in every industry are starting to understand just how important this concept is – but the truth is, company culture isn’t a buzzword. It’s not just a ping pong table in the break room or free snacks or nap pods. So what is company culture, really, and why is it so important to a company’s short- and long-term success?

Company Culture Is…

  • “The way we do things around here.”

  • There’s a tangible, practical aspect to company culture. Put simply, company culture refers to the way people in an organization behave, what practices and procedures are in place, and the attitudes and beliefs that inform those practices and behaviors. To get to know a company’s culture, you need to look at what their insurance policies cover, how they run their meetings, how employees interact with each other and with management, their vacation and flexible work policies, and more. A company demonstrates its values through its processes and procedures, and those values are lived out through the way employees and managers engage with each other and with their customers or clients. Are meetings collaborative, with employees sharing ideas and thoughts, or are they carefully structured with top-down oversight? Do employees ask each other for help or advice when solving problems, or do they isolate themselves?

    Popular perks like game nights and nap pods are examples of performing a company culture that values employees’ happiness and well being. However, do those same companies support employees with strong mental health benefits, flexible work hours for parents who need to stay home with sick kids or attend ballet recitals, or company bonding activities like running clubs, book clubs, or lunch and learns? Surface-level behaviors don’t tell the whole story of a company culture, so it’s important to look deeper.

  • Everyone’s responsibility.

  • Many people who write about company culture focus on leadership - and a company’s leaders certainly have a strong hand in deciding what a company’s culture is and modeling the values and behaviors that represent that culture. But every employee in an organization contributes to the culture, from the CEO to front-line sales teams to the person who answers the phone to the cleaning crew, and everyone in between.

    Executives can encourage open communication and idea sharing among employees, but if members of one team clash and create division among themselves, the entire culture is affected because other employees will see and be influenced by the dysfunctional team dynamics. Conversely, if entry-level employees take advantage of open idea exchange policies and contribute productively during meetings with support and encouragement from executives, higher-level employees can be more inclined to follow their lead and offer their own suggestions. Culture is contagious, and everyone has the power to contribute to it, in ways both positive and negative.

  • The only sustainable competitive advantage employers have control over.

  • Clearly, company culture is an important indicator of the internal health of an organization. But just as importantly, creating and sustaining a healthy company culture is a strategic business decision that might ultimately be the strongest driver of an organization’s enduring success in their market.

    Recent technological advances and societal shifts have led more and more companies to hire employees who are adaptable, as opposed to those with a specific educational or professional background. In an ever-evolving business landscape, an agile workforce that can pivot to meet new demands and challenges is a company’s strongest competitive advantage, and executives are putting their focus on hiring individuals who demonstrate a willingness and ability to continuously learn, grow, and adapt.

    Unlike other competitive advantages, such as economic conditions, market location, and vertical strength, company culture is completely within the control of an organization’s members. Company cultures that foster values of adaptability, resilience, and continuous learning can provide a leg up over competitors who are slower to keep pace with technological advancements and shifts in the business landscape, in addition to helping ensure a more productive, engaged, and loyal workforce, all of which are key components to an organization’s internal and external success.

Whatever is going on in the economic, social, and business landscape outside an organization’s power, a company’s culture can serve as the beacon that guides teams through any uncertainty and challenges they may face. It is the compass that aligns values, beliefs, and behaviors, fostering an environment where innovation flourishes, employees thrive, and customers remain loyal. And it’s all within the power of a company’s leaders and employees to choose and embody every day.

About the Author

Kelby Shope

Kelby joined Kimmel & Associates in 2018, focusing on general construction and concrete in Iowa, Kansas, Minnesota, Missouri, and Nebraska. In 2022, he transitioned to serving the renewables market nationwide.

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