What is Organisational Culture and Why is it So Important?

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How to value a business

Experts agree that organisational culture is the key to a company’s success. But what exactly is organisational culture, and what purpose does it have in the day-to-day running of a business? Here, we’ve created a guide to tell you more about the concept, and to explain how having a good or great organisational culture could help to give your business a boost.

Table of Contents

  1. What is Organisational Culture’s Definition?
  2. How Can Organisational Culture be Measured?
  3. Qualities Shown in a Good or Great Organisational Culture
  4. Changing and Building On Organisational Culture
  5. Does Your Own Company Require New Premises?

*Reminder: Here at Halkin, we are ready and prepared to provide our clients with virtual office spaces, offering them a working solution on their ideal platform in the time of the pandemic. For more information on what we’re doing to tackle COVID-19, please contact our team today.

What is Organisational Culture’s Definition?

Strictly speaking, there is no one set definition for the term “organisational culture”. Over the years, a number of different investigators have drawn their own conclusions, but each of the most famous studies focuses on the idea that organisational culture is the development of certain group behaviours over time and basic assumptions that help to guide and inform an organisation.

In short, organisational culture is a collection of values, ideas, practices and expectations that your company follows. These factors help to make your company what it is, and should be demonstrated by your team members in order to improve performance in the workplace. Doing this can also lead to an increase in your reputation among your customers and client base.

You shouldn’t, however, confuse the idea of culture with your company’s goals or mission statement. Both can help you to define it, but culture is created through authentic behaviour, not simply a good press release or well-thought-out policies. How your boss responds to a crisis in your company or its wider industry, how your team adapts to changes in customer demands, or how your manager corrects another employee after they make a mistake are all examples of how you may see your company culture in action.

Lean Culture

Some companies may attempt what is commonly known as “lean implementation”. Part of this involves implementing a lean culture, which also varies in terms of definition and concept. In some cases, the primary focus of implementing lean culture will be to improve a company’s processes. In others, it may include increased respect for employees as well.

In any and all cases, the core principle will remain the same, which is that lean culture is a culture of learning, with an overall aim of continuous improvement that’s driven by customer focus.

How Can Organisational Culture be Measured?

As there is no set definition or meaning for the term “organisational culture”, there is also no one set way of measuring it. However, there are some established theoretical frameworks that have been developed to understand company culture.

The Denison culture index, for instance, defines four traits of organisational culture which can more easily be measured:

  • The company mission, or whether or not the business has a clearly set out strategic direction and goal, alongside measures of success and key performance indicators
  • Employee engagement and involvement, or whether or not leadership teams, management, or bosses rely on employees to make decisions by empowering them and developing them, as well as enabling team working
  • Internal consistency, or whether or not the organisation has consistent values that they visibly adhere to
  • Adaptability, or how open the organisation is to change, or to learning from customers, clients, and competitors

Why is Organisational Culture Important in the Workplace?

Having a great company culture is key to running a successful business, and how this works will all depend on your team. Workplace cultures vary from company to company, but the ones which work best are the ones that align with the values of the employees. When workers feel like they can align with the culture of a company, they’re more likely to feel comfortable, supported, and valued. They’re also more likely to feel respected, and able to speak up and share problems that they may be experiencing.

Organisational culture also plays a huge role in attracting new talent to your business, and for outperforming your competition where necessary. According to a study conducted by Glassdoor, 77% of workers across the UK, France, Germany, and the United States would consider how good the corporate culture of a firm is before applying for a job. It’s also been found that more than half of a workforce would be willing to leave their current positions for a lower-paying job if they found an organisation with a better culture.

Having a good or great organisational culture in your workplace is also one of the top indicators of satisfaction within a business, and is the reason almost 65% of workers stay in their jobs.

Qualities Shown in a Good or Great Organisational Culture

Co-working in London

Every company has its own unique culture, and you should never be in doubt about keeping your company ethos just the way it is to stay true to your brand. However, there are certain qualities that you may wish to cultivate within your firm, as these are shared by corporations with consistently high-performance levels. These qualities include:

  • Alignment between your company’s objectives and your employee’s motivations
  • A culture of appreciation, where hard work is valued, and employee’s contributions are thanked and recognised
  • Trust between team members, so everyone feels free to express themselves
  • Honesty and transparency, so teams are able to rely on each other to make decisions, interpret results, and form partnerships where necessary
  • Everyone on the team supporting each other, encompassing collaboration over work projects, general communication, and respect
  • Employees motivating each other to even greater levels of performance, with the results being greater productivity and profitability
  • Leaders showing resilience, and are noted to watch and adapt to change with ease
  • Creative and innovative thinking, which is applied to all aspects of the business (including cultural initiatives)
  • Psychological safety, which ensures that everyone on a team feels comfortable contributing, from providing honest feedback when asked to take risks when problem-solving

Business Plan

Changing and Building On Organisational Culture

Carefully managing organisational change is of paramount importance for any firm, because if it fails this can have a great impact on the market position, engagement, and retention of employees. There is always a possibility that a cultural shift in your firm will result in failure, as there are a number of pitfalls and problems that have to be avoided or resolved before a successful change occurs.

A few practical solutions which may help you to change or build on your company culture include:

  • Avoiding a fuss around the change, as announcing this intention may cause concern among your employees. Instead, you may start by making small changes and taking the time to talk with your employees in small groups about the need for change, along with any challenges or possibilities
  • Conveying a need for change to the wider organisation, not just high level employees and individuals. Use stories that allow employees to connect with the need for and the purpose behind the change, so they’ll understand the benefits rather than focusing on the challenges it may create
  • Use what you have to your advantage, and ensure that leaders of networks and resource groups are involved in the implementation of a new organisational culture

There are also several “dos” and “don’ts”, which may apply to management teams and leaders in a working environment:

  • Do come with a clear vision, direction, and purpose for your organisation, and promote this to your workforce
  • Do identify key stakeholders of the vision you now have and encourage your employees to be attentive to the needs and wants of those stakeholders
  • Do define the role of managers as enabling their team and drawing on the capabilities of staff
  • Don’t suddenly bring in new managers. Work with your existing managers and employees who share your vision to create shared values amongst the members of your organisation

Does Your Own Company Require New Premises?

If your own business is growing in size and could soon require a new address to comfortably accommodate your team and any equipment, get in touch with us today. We are fully prepared to offer you a new, stylish office space at one of our London locations, and as each of our offices are unique in personality and aesthetics, we’re confident that we can help you find a location that suits your company’s culture.

You’ll never have to worry about costs with our service, as all our rates are transparent across our tenancies. As these tenancies are also flexible, you will even be able to change location and receive a new address for your office if your firm suddenly requires more room.

Contact our team today and we’ll do everything we can to help your business become the success you know it can be.

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