Workplace Culture: What It Is, Why It Matters, and How to Build It

By Candace Coleman, CultureWise Content Manager

“Culture eats strategy for breakfast.” This drop-the-mic zinger, attributed to management guru Peter Drucker in 2006, hit a nerve. Plan-oriented CEOs were floored to hear that something as intangible as workplace culture could undermine a business linchpin like strategy. As the quip gained traction, they trained their sights on this “soft” topic that had previously escaped their attention.

Leaders began to digest the slew of books and articles that emerged on organizational culture, and many learned that it impacted their companies far more than they realized. They discovered, as Drucker’s saying colorfully illustrates, that culture could make or break their business—regardless of how well they orchestrate everything else.

In time, “workplace culture” rose to buzzword status in the business community. Even though multiple opinions, myths, and misconceptions circulated about what constituted good company culture, few people disputed its importance.

What is Workplace Culture?

Today, despite a heightened understanding of culture’s impact, people are still uncertain about how to define or improve it. And that’s why many CEOs who try to elevate their organizational culture resort to tactics that don’t work.

For example, some leaders simply aim to make their employees happier and offer appealing perks, hoping that a strong culture will follow. Others create a set of core company values, believing these principles will foster a solid workplace culture. And many try to shore up their company culture by developing policies that improve work-life balance and address inclusivity in the workplace.

All these initiatives are admirable and can greatly improve a company’s work environment. But none of them form an organization’s culture. So if efforts like these don’t create this vital business area, then what does?

The essence of workplace culture can be boiled down to one word: behaviors.

An organization’s culture is comprised of the everyday conduct displayed by its workforce. It is evident in how employees approach their jobs, work with one another, and interact with customers and stakeholders.

A pattern of behaviors will evolve regardless of whether a company leader tries to mold workplace culture. So, to create a unifying, high-performing culture, leaders must intentionally focus on honing behaviors that will help the organization and its people thrive.

Why Workplace Culture Matters

The behavioral norms that form a company’s culture permeate every aspect of the business. As a result, workplace culture not only impacts people’s attitudes about their jobs but also heavily influences the organization’s level of success. Top areas affected by workplace culture include:

  • Recruitment and retention
  • Employee engagement
  • Productivity
  • Customer satisfaction
  • Resilience
  • Growth
Recruitment & Retention

The pandemic spurred numerous people to reevaluate what they wanted from their careers, and many found their jobs lacking. As a result, droves of employees with realigned priorities looked for more fulfilling, less stressful work, kicking off the Great Resignation.

Substandard workplace culture was one of the primary reasons people listed for leaving their jobs. For example, the SHRM Global Culture Research Report shows that 90 percent of workers who rate their work environment as poor have thought about quitting.

Conversely, a vibrant workplace culture continues to be the biggest draw for top talent. Companies with a strong workplace culture attract and retain the caliber of employees that elevate the organization’s potential for success.

Employee Engagement

Employee engagement is the degree to which people feel connected to and vested in the organization where they work. Engagement is highest in companies that give employees a sense of belonging and purpose and make them feel respected and valued. A healthy workplace culture supplies all these qualities.

Companies with a strong culture make it a key element of their onboarding process. They use it to ignite recruits’ enthusiasm and lay the groundwork for a long-term relationship with the organization.

To maintain this connection, they ensure that positive workplace culture remains a focal point of the employee experience after they’ve settled in. And they strive to make the culture just as welcoming, supportive, and inclusive for remote team members as people working on-site. Organizations that prioritize workplace culture cultivate employee loyalty.

Productivity

A strong culture is rooted in establishing expectations and promotes and reinforces behaviors that help employees reach their potential. As a result, it motivates people to perform at a high level and take pride in their work.

Employees operating within a supportive workplace culture are inspired to

  • Continuously seek improvement
  • Communicate effectively
  • Be proactive
  • Stay organized and focused
  • Deliver results

Positive accountability lies at the core of a  high-performing culture. Teams pull together when accountability is a standard everyone in the organization upholds. And coworkers are more likely to encourage and acknowledge one another’s achievements. In addition, employees empowered with accountability feel more closely aligned with company goals and are inspired to do their best work.

Customer Satisfaction

Workplace culture drives what customers see, what they hear, and how they feel when they interact with a company. Consequently, a robust organizational culture has the power to build exceptional customer relations.

A strong culture reflects specific behaviors that help attract and retain a solid customer base. They include:

When customers consistently experience a high level of service, they become brand ambassadors. Ultimately, a company culture exhibiting customer-focused behaviors will elevate a company’s reputation in the marketplace.

Growth

A leader’s personal influence can wane when their company begins to grow because employees see less of them. Left untended, the culture that the owner instilled will eventually be overtaken by the loudest voice, positive or negative, in any department or location.

But when properly planned and nurtured, a founder’s visionary culture can expand with their business and become the vehicle for the growing organization’s success. For example, some of the world’s largest companies have remarkably cohesive cultures, including Marriott, HubSpot, and Southwest Airlines.

Healthy workplace culture is also essential to the success of mergers and acquisitions. When leaders intentionally craft, communicate, and help their people absorb behaviors that benefit all involved, they give their people the best chance to galvanize as a team.

Resilience

The behaviors engrained in a strong culture build resilience and agility. Employees operating from a secure foundation are motivated to be tenacious and innovative when faced with challenges. They are prepared and empowered to think creatively and address problems head-on. 

These qualities are why companies with strong cultures stood out during the chaotic years of the pandemic. They were already structured to adapt to and take advantage of change, and when the health crisis hit, they were poised to respond and rebound.

An effective culture is the backbone of a business because it provides structural support to everything a workforce does, especially in stressful times. It helps them maintain stamina, confidence, and unity.

How to Build Workplace Culture

CEOs still rely on strategy to develop the more concrete areas of their business, like operations, marketing, and finance. But to achieve their organizational goals, they also need a plan and a process for developing a healthy workplace culture.

A leader’s first step should be to envision the ideal culture for their organization based on the characteristics they know breed success. Then they should identify and articulate the behaviors that will bring that culture to fruition. Examples of behaviors leaders might choose to include are:

  • Practicing blameless problem-solving
  • Embracing change and growth
  • Welcoming diverse perspectives
  • Sharing information
  • Taking ownership and following through

After laying the groundwork by defining the traits they want their culture to reflect, leaders need to communicate, coach, and practice these behaviors with their staff. And, as with any other business methodology, they need to commit to an ongoing process of building and sustaining their company’s culture. They can’t set it up and expect it to operate on autopilot.

As organizational expert Patrick Lencioni explains in the Charleston Regional Business Journal:

“What makes a business successful is when leaders are crystal clear on what they want their organization to be, and then repeat and reinforce that message constantly.”

Author and CultureWise CEO David J. Friedman advises leaders to create “rituals” to practice the behaviors they’ve defined for their culture. He notes that these practices form a systematic method to teach and reinforce the behaviors they want their team to exemplify, and they are immensely effective.

As he observes in Culture by Design,

“By incorporating daily and weekly rituals to practice these behaviors together in our work life, we create multiple opportunities to think about, discuss, and internalize them.”

After leaders implement a process to build their company’s culture, their employees will be able to follow consistent patterns of behavior throughout the organization. In addition, this infrastructure ensures that the culture remains dynamic and intact as the company evolves.

Explore the CultureWise website to learn more about having a strategy and process to build and sustain workplace culture. Then book a call with one of our specialists to discover the impact the CultureWise system can have on your company.

And stay informed about the many facets of workplace culture with a complimentary subscription to our weekly newsletter, Culture Matters. You’ll receive the latest articles, videos, and podcast episodes, and be among the first to hear about informative webinars and event opportunities.

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