Is Company Culture Really That Important?

It’s common to see major companies bragging publicly about their corporate culture, but the values they tout are usually not particularly unusual. Manufacturing and industrial companies are devoted to safety. Tech companies value innovation. Retail operations prioritize customer experience.

By themselves, those aren’t “corporate culture.” They’re really just catch phrases or slogans — at least when they’re part of a public marketing campaign.

Many major companies also make a big deal about the free food they provide to employees, or the ping pong and pool tables they have set up in their offices. Those may be cool, but by themselves, they’re not “corporate culture.” They’re simply nice benefits.

However, values like safety, innovation and customer experience — and benefits that make employees happy at work — can all be crucial ingredients in a company’s culture.

And the right company culture can determine whether a business is a flash in the pan or a long-term success story.

What is Company Culture? defines culture as “the behaviors and beliefs characteristic of a group.” Therefore, a company’s culture is the combined beliefs and behaviors theoretically shared by all of a company’s workers, from the top to the bottom of the organizational chart.

Needless to say, you can’t enforce culture. A statement saying your organization’s culture values innovation doesn’t make it true. And providing free lunch has little to do with your company’s core behaviors and beliefs.

Corporate culture isn’t created by a PR staff or marketing consultant. Corporate culture is built. It starts with the beliefs and behaviors of the founders, it’s grown through the hiring of employees who share those beliefs, and it’s constantly reinforced by the way the company operates and makes decisions on a daily basis. “Innovation” may indeed be a key ingredient in a company’s culture. But that’s because it’s truly a core value deliberately built into the organization at every level, starting with the CEO and extending all the way down to the newest employee.

If you’re still struggling to figure out the difference between company culture and a marketing slogan, think about this statement heard constantly in almost every organization in the developed world: “That’s not how we do things here.”
The way that things “are done there” — probably defines the company’s culture.

Why Is Company Culture So Important?

A longboat isn’t going to get very far if everyone is rowing in a different direction. The winner of the race will be the boat whose crew is working in unison.

Many research studies, including a landmark one published 20 years ago in the journal Organizational Science, have shown that businesses with a strong and positive culture are more likely to enjoy financial success. It’s not hard to see why; the more involved and committed a workforce is to the organization’s mission, values and goals, the higher the likelihood of success. Workers who don’t understand the culture, or disagree on its key components, are more likely to end up “rowing in different directions.” Communication is fractured, decision-making is contentious and internal politics trumps cooperation. A shared culture leads to cooperation and progress.

A strong corporate culture also creates a more enjoyable work environment, in which employees are engaged and feel a shared responsibility for results. That’s not only important for company growth, sales and profits. More than 50 million millennials are now in the workforce, and they typically have less loyalty to an employer than their parents. These younger workers are likely to pay greater attention to a company’s work atmosphere, culture, and values, so a strong and positive corporate culture is vital to attract and retain this large and growing group of employees. (That’s also where the free food and ping pong tables come in.)

Does It Work?

If you believe successful CEOs like Brian Chesky of Airbnb and Elon Musk of Tesla Motors, their companies’ cultures have played a major role in their success. Of course, visionaries like Steve Jobs, Larry Page, and Sergei Brin were preaching about the importance of corporate culture — and practicing what they preached — many years ago. And Apple and Google still seem to be doing pretty well.