Organisational Culture: defining and developing your own Having a positive company culture is one of the best ways to recruit and retain talent in the era of the Great Resignation. Learn how to develop your own in our full guide. Written by Helena Young Updated on 27 March 2023 Our experts We are a team of writers, experimenters and researchers providing you with the best advice with zero bias or partiality. Written and reviewed by: Helena Young Lead Writer Developing an attractive and inclusive company culture is particularly important for small businesses today. In the past, increasing wages would have helped to alleviate the issue. But, in the current economy, many SMEs are simply unable to afford salary rises, and offering an attractive, authentic workplace culture can be a vital employee benefit.Post-COVID, job seekers have been handed the recruitment reins, with industries such as hospitality seeing a mass exodus of staff, leading to labour shortages and headaches for recruiting managers. Instead, having a well-defined work culture has become one of the best ways to distinguish yourself from competitors and improve employee engagement. It’s also a win-win situation for SMEs. Employees are far more likely to thrive within a supportive, conflict-free work culture, with effective leadership delegation leading to new ideas and greater business success.In the below article, we’ll go through how to cultivate your own unique organisational culture, including what to avoid and the benefits that can result. This article will cover: What is organisational culture? Why is an organisational culture so important? What is startup culture? How to create a great company culture Tools for organisational culture Examples of inspirational organisational cultures Building a positive work environment through company culture Aligning company culture with goals and values Conclusion Organisational culture FAQs What is organisational culture?Organisational culture is a difficult thing to describe, because it should be unique to each company.Loosely speaking, it can be characterised as the embodiment of a brand’s personality. Your culture influences how you behave. Because of this, it should reflect your company’s values and expectations, and align closely with your company mission statement.For example, one company might have an autonomous culture, by organising a flat hierarchy with little difference between the executives and the frontline employees. Another might want a mentoring culture with lots of middle-management positions to pass down knowledge. Neither approach is better than the other.Developed properly, organisational culture will create a positive work environment that will see employees working towards a common objective.But, a poor company culture can quickly become poisonous, infecting your workforce with negative traits. This can lead to staff burnout, high turnover, and rotten GlassDoor reviews.Workplace norms, including individual beliefs and behaviours, need to align in order for there to be a cohesive organisational culture. However, business owners should be aware that they can’t have too much control over the concept.Ben Elliott runs recruitment company, Found By Few, alongside his co-founder, Danielle Bowman. As Elliott describes it, “your culture should not be a defined thing that people must fit into. It should be [based on] a set of values. And when people join the company, they share your values but can add to your culture rather than fit it.”Culture vs values – what's the difference?Successful businesses will have a clear set of values and a company culture that they jointly use to promote their brand identity.Both are closely linked and deserve a proper amount of attention. That said, values can be more easily-defined, whereas culture is much more subjective. It’s recommended that a business finds its values first, to use as the building blocks that will shape your culture.Here are some examples of a set of values you might choose to commit to:Integrity, treating colleagues fairly and with professionalismDiversity, equity, inclusion (DEI), being an inclusive workplace that recognises and values all backgrounds, voices, roles, and contributionsHonesty, to act in a transparent, trustworthy mannerYour culture will emerge depending on how successfully you communicate and uphold this set of values. It may also need to be responsive to the emerging needs and concerns of your staff and the wider culture around you.Bowman uses the Black Lives Matter (BLM) movement as a case in point. “[Pre-BLM] a lot of companies weren't looking at DEI, or perhaps overlooked race in that conversation” she recalls. “When the BLM movement happened, companies that were championing themselves as diverse companies to work for, but that really had no racial diversity, said ‘we need to be better here.’“That's an example of why company values will define your culture and why culture should constantly evolve.” Why is an organisational culture so important?Put simply? Having a good organisational culture will make your employees be more engaged with the company they work for, and likely stay there for longer.Culture can shape the way your staff behave and interact with one another. If there are positive traits – your culture is supportive, innovative, or inclusive – then high staff turnover can be dramatically reduced. This is one of the most positive impacts when workers enjoy engaging with their colleagues and manager.Staff can feel inspired and motivated to work harder, increasing productivity and driving up your bottom line. Hiring will also be made easier, as you can boast honestly about your successes and how happy your employees are with their roles.Knowing your brand personality will also make it easier to narrow down the type of talented professionals who will fit in well in your company.It might sound utopic. But all of these benefits genuinely are possible with a strong company culture. A smart way of ensuring staff are bought into the process is through the creation of Employee Resource Groups, allowing team members of particular backgrounds to engage authentically with cultural change at your business. What is startup culture?Businesses that are just starting out will not have had time to develop their own unique company culture. This has led to the phenomenon of startup culture, a set of organisational practices and beliefs first originated by the early ‘dot-com’ startups of the late 1990s.Startup culture began as a move away from ‘boring’ corporate culture, bringing lots of positive outcomes. Moving away from rigid processes and a defined management pecking order can create the ideal atmosphere for innovation and accelerated growth.But, de-emphasising rules can also be a dangerous mindset that pushes employees to engage in certain behaviours. As a result, there have even been several high-profile cases of ‘startup culture’ becoming one of mismanagement and poor duty of care.In an extreme example, WeWork’s policy of free beer was withdrawn after a former employee sued the company for sexual harassment and other inappropriate behaviors in the workplace. This is one example of an instance that's led to many managers exploring sober workplaces.Pros and cons of adopting a ‘startup culture’ Pros Startup environments often give employees a strong sense of community as teams are relatively small, and everyone is working toward a common goal. As they tend to have leaner workforces, startups are agile and less resistant to change. Startups tend to have a flat hierarchical structure, placing more value on open communication. Managers work closely with employees, giving leaders a stronger influence over the values of the workforce. Cons Copying a generic ‘startup culture’ will make your company’s own seem potentially inauthentic. Having minimal resources can create a high-pressure environment Life in a startup moves fast. Company culture needs constant monitoring or it can quickly deteriorate into a toxic work environment. Many startups try to reject rigid processes and ‘dull’ working environments, deprioritising proper management, structured HR processes, and risk assessment. How to create a great company culture in 7 stepsThere is no secret recipe for building a positive company culture. As Elliott states, “I think I'd be a bit worried if the CEO of a company prescribed ‘this is our culture’ rather than something that is coming from the employees. Company values are the thing the CEO has control over, and they will inevitably shape the culture.”With that in mind, the key to defining a successful company culture is to ensure that your ideal scenario is supported by strategy and structure.Below, we've listed a step-by-step guide to introducing policies and programs that will develop your desired company culture. Business owners might not choose to follow these tips entirely sequentially. But they are a good, logical formula to follow if you're unsure how to get started:Step 1. Mission statementDefining and communicating a mission statement is the first step to building an organisation's culture. By laying out a clearly-defined destination for the workforce, mission statements establish a shared goal for employees to work towards – massively influencing their attitudes towards their jobs.Our guide to how to write a mission statement has more information on the subject, including some example case studies to inspire you.Step 2. Company valuesJust as important as mission statements are company values. Typically presented as a list of five or six key ‘character traits' for your business, these are essentially an instruction to staff and managers of how to conduct themselves while working.Naturally, a company's values – when implemented correctly – will play a huge role in shaping its culture. If members of a workforce are visibly striving to embody principles like honesty, integrity, and inclusivity, this will create a harmonious organisational culture where every individual shares the same moral code.New team members will also feel motivated and inspired to do the same when they join, creating a cycle of positive company culture that runs itself. Which leads us onto..Step 3. HiringFinding someone who immediately blends into your workforce is a near impossible task. But it’s also a task worth doing – 81% of hiring managers believe a candidate is unlikely to leave an organisation where they are a good cultural fit.Take a smart approach to your hiring strategy and ensure any interviews or aptitude tests assess a candidate’s cultural aptitude as much as their skillset or experience.For example, design your questions around your values. You might choose to conduct a group interview, such as a metaphorical crisis management scenario, to see how well each candidate works in a team.Be wary of trying to find someone who’s a perfect fit – it is healthy for new candidates to bring a new energy into your team. If you are a group of extroverts interviewing an introvert, for example, don’t get hung up on whether or not they’ll be keen to join your after-work socials. Their different personality will likely be a valuable trait that is currently missing, and it can help grow your culture.Step 4. OnboardingJust because a candidate impressed during an interview, doesn’t mean they will just fall into place and become a cultural ambassador for your company.New hires have to learn your organisation’s way of doing things. Set up an introductory workshop or welcome day to teach every new employee about the company’s beliefs and values.That way, they can immediately see how your organisation’s culture might differ from their previous role – helping them to align accordingly.Step 5. Performance reviewsAs these happen regularly, they are a good method by which to reinforce your company values. Structure your employee feedback on how well they perform against certain cultural standards.For example, asking coworkers for feedback on their ability to work in a team or simply to help others succeed. Be sure to request reports from multiple departments, to encourage the idea that collaboration leads to success.Step 6. Rewards for employeesOnce you've gathered the necessary information from performance reviews, be sure to reward those who embody your company culture with tangible benefits and perks, as this provides motivation for staff.Rewards also don’t have to be given out on an individual basis. For example, if you want to promote teamwork, you might offer a free lunch to an entire department when it hits a certain target.Step 7. Employee surveysEvery change implemented in the above should be followed or preceded by a staff survey to gauge interest/success. Employees are best-placed to offer opinions about their company's culture. Ignoring them will risk sacrificing engagement levels and with them, staff morale.Anonymous surveys are crucial here. Workers are more likely to be honest about what they like about their current work environment if they feel they can express themselves freely. Tools for organisational cultureThere are lots of different tools and resources available to help organisations define and implement their culture – particularly for the above steps. Here are four key software types we recommend companies explore:1. Intranet softwareActing like a centralised company message board, intranet software can be used to update staff on important items that influence culture, like training programmes or employee benefit schemes. Examples include tools like Happio and Microsoft Sharepoint.Businesses can also personalise the intranet's homepage to reinforce the values that a company cares about. This could be as simple as celebrating an employee's birthday for positivity, or sharing end-of-year financial figures for transparency.2. HR softwareHuman Resources departments or managers are at the heart of organisational culture. Also known as people teams, they exist to track things like Diversity, Equity, and Inclusion, staff satisfaction, and health and wellbeing initiatives.HR software is a must if you're serious about building a strong company culture. Tools like CitrusHR and Gusto dramatically enhance the employee experience. Features include onboarding capabilities, to ensure new workers are supported, and performance goals, to make it easy for line managers to track learning and development.3. Employee surveysFeedback capture software like Slido, or feedback surveys like SurveyMonkey, provide an excellent solution for gathering and analysing employee data.Google Forms is an example of a free software format available. You can also use most Customer Relationship Management (CRM) systems to build an online webform if you're after something a bit more professional-looking that stakeholders can use.4. Performance review softwareGone are the days when managers had to struggle through a year’s worth of employee data to conduct performance appraisals. Instead, tools like PerformYard and Trakstar come with features to edit feedback forms so they are tailored to a company's unique values and mission statement.This information can then be utilised to spot the areas where culture is being compromised. For example, if negative feedback towards a particular staff member is consistently given, managers will be quicker to intervene: benefitting both the employee and their co-workers. Examples of inspirational organisational culturesWe've scoured the top-listed companies in the UK, according to jobs review website Glassdoor.co.uk, to come up with our list of the most inspiring employer case studies for SMEs. They are: Swipe right to see more 0 out of 0 backward forward Bain & Company ServiceNow Boston Consulting Group Ocado Technology Mastercard Average Glassdoor Rating 4.5 Average Glassdoor Rating 4.5 Average Glassdoor Rating 4.4 Average Glassdoor Rating 4.3 Average Glassdoor Rating 3.9 Number of employee reviews: 6,500 Number of employee reviews: 3,500 Number of employee reviews: 7,300 Number of employee reviews: 507 Number of employee reviews: 5,400 Percentage of employees who would recommend it to a friend [Glassdoor] 91% Percentage of employees who would recommend it to a friend [Glassdoor] 92% Percentage of employees who would recommend it to a friend [Glassdoor] 89% Percentage of employees who would recommend it to a friend [Glassdoor] 88% Percentage of employees who would recommend it to a friend [Glassdoor] 89% Percentage of employees who approve of the CEO [Glassdoor] 97% Percentage of employees who approve of the CEO [Glassdoor] 97% Percentage of employees who approve of the CEO [Glassdoor] 95% Percentage of employees who approve of the CEO [Glassdoor] 93% Percentage of employees who approve of the CEO [Glassdoor] 95% What do staff say? “Private health and dental insurance available. Bain has a generous pension contribution without employees needing to match or salary sacrifice.” What do staff say? “Strong committment to diversity, sustainability, and employee welfare.” What do staff say? “Lots of opportunity to travel, interesting work, [and] smart colleagues with exemplary credentials.” What do staff say? “Nice work culture. Brilliant engineers across all teams. Management is really open to new ideas and willing to help.” What do staff say? “Very positive, supportive culture, highly professional and committed work colleagues.” Building a positive work environment through company cultureYou’ve decided on the key touch points through which to develop your organisational culture. Now, it’s time to put your vision into practice and ensure you properly embed your values into your everyday operations.Communicate your cultureActions speak louder than words – but that doesn’t mean you should forget about the latter.Share stories about your company culture in action, such as by giving a shoutout to a staff member who you think really acted with integrity during a key project. By communicating your company culture and how it enables your business, it becomes more consistent and more effective.As a brand, Found by Few champions diversity and inclusion. Bowman says the business conveys this value “in our marketing, what we talk about, the subjects that we're passionate about, internally with our staff, and then also to our partners as well.”Good organisational culture is also one of the biggest value drivers for potential investors, as it typically leads to long-term business success.Found by Few CMO Danielle Bowman and CEO Ben ElliottSmall business owners should ensure that, having made a significant investment in resources to create a positive company culture, they capitalise on the efforts by communicating any achievements to potential partners – increasing shareholder value.Be honestDon’t shy away from transparency about the problems within your company. If you claim to promote DEI, but discover a gender pay gap within your company, don’t hush it up. Acknowledge the issue and communicate to your staff that you are taking steps to fix it.Your staff are not blind. If they are being fed conflicting messages about the company they work in, this could cause workers to believe management is disingenuous, requiring bosses to employ a conflict resolution strategy.The same is true of your customers. By all means, be aspirational about your company culture. But stay away from cultural inconsistencies. It might feel like a white lie, but people are increasingly clued into company falsehoods.Largely, this is due to social media. Channels like Instagram and Facebook have empowered people to form their own views about who a company is during their own research.Bowman stresses that, if a business is using social media to promote its culture, it should be wary of appearing dishonest by sharing conflicting messages.“If [what they see] doesn't add up, people aren't going to feel like you are a safe space or a culture for them,” she says.Be open to changeLong-term, the main tenets of your organisational culture are likely to stay the same. But, make sure you’re not being too steadfast in your approach to company behaviours and beliefs, as these will naturally be affected by external social factors.“People have liked to define their company culture as something static that individuals must fit into. But that concept is inherently exclusionary. What staff really want is a company culture they can add to rather than fit” Elliott reveals. “That’s one thing that probably wasn't the same five years ago.”Bowman points to the COVID-19 pandemic as a global event that has had a big impact on shaping company behaviours. As attitudes towards the daily commute into the office shifted, work culture has pivoted to allow for a more flexible working dynamic.“Prior to COVID-19, to define themselves as flexible, [a company] probably would have offered people one day a week working from home,” says Bowman. “During COVID-19, employers [switched to] ‘if we really are a flexible company, that means letting people work where they want and as they deem best.”Get everyone involvedThe leadership team must demonstrate a similar commitment to the company’s culture. Not doing so risks undermining the very behaviours you are trying to establish throughout your business.If you promote a collaborative culture with an open door policy, don’t hide away in your office with the door shut every day. Instead, lead by example.Rein in bad behaviourEmbedding the ‘right’ kind of organisational culture for your business also means squashing the wrong kind – before it can take root. This will avoid causing conflict within the team further down the line.For certain inappropriate actions, such as if a staff member exhibits prejudice or aggressive behaviour, there are clear paths to follow, such as asking employees to report it to a line manager.But, for those who simply aren’t a ‘cultural fit’, a more personalised approach is needed to help them engage with the established beliefs and practices.Oftentimes, employees simply need to open up about issues or struggles they might be facing. Managers might organise a simple informal chat to a lunchtime walk or a coffee.Let’s say a staff member has taken sick leave without telling their manager, exhibiting poor communication and teamwork. Remind them of the process for taking sick leave. Ask them if anything is wrong and set goals and boundaries that may help them to communicate better. Aligning company culture with goals and valuesBusiness owners researching company culture and how to develop it will likely hear the term ‘cultural alignment' at some point in the journey.This is exactly what it sounds on the tin: your company values, mission statement, and objectives all joining up hand-in-hand to create a cohesive narrative that tells customers and staff exactly who you are and what you believe in.Companies have a greater chance of achieving cultural alignment if they plan ahead and consider how each branding aspect complements the other.For example, if a firm targets ‘becoming net zero' in its mission statement, it is only right that ‘eco-friendly' be given as a company value. This will cement your firm's priniciples and guarantee trust from customers and workers.Thinking further ahead, cultural alignment brings multiple benefits for an organisation's change journey. Let's say a company migrates to a different software platform for its sales activities. It will be better-placed to do so if it prioritises values like innovation and growth. Workers will feel encouraged and supported to test out the new tech, rather than intimidated by the learning and development required.Remember that practice does not always follow theory. Cultural alignment is a tidy phrase that belies just how fluid a brand's identity can be. Entrepreneurs are better off thinking of it as a North Star to follow, than a fixed destination. ConclusionOrganisational culture refers to the values, personalities, and habits that make your business what it is. Successful cultures nurture a supportive and motivational work environment; just as dysfunctional cultures bring about conflicts and low staff morale.The first step to designing your own organisational culture is understanding this is not something that can one day be introduced into the office like a shiny new printer. Astute founders will recognise that company culture must be built up and reinforced over time with various tools and materials, including business software.Our top three takeaways for designing organisational culture are:Organisational culture is abstract. It will naturally evolve alongside your company. Embrace change, and communicate clearly if you feel you are moving in a new direction.All members of your team have a crucial role to play in building company culture. Ensure organisational culture is sprinkled through the people management process to gain – and retain – everyone's buy-in.Culture is tightly intertwined with company values, which themselves sit alongside mission statements. Be aware that any changes to these supporting players will also affect your overall culture (and vice versa). Organisational culture FAQs What makes a good organisational culture? There’s no ‘right way’ to do organisational culture. What it looks like will depend on the company’s goal. Generally, to have a successful organisational culture your workforce needs to be fully-aligned to ensure you are all pulling the same direction. Why is organisational culture important? Organisational culture mandates how your employees should behave and interact with each other. Developing a good culture is therefore crucial to ensure that your team works effectively with each other to reach a common purpose. How can organisational culture affect the workplace? If developed well, organisational culture enables a business to run harmoniously, as the entire workforce acts with shared beliefs and goals. If employee beliefs and behaviours are not aligned, this can cause conflict and poor collaboration, often slowing down growth. Share this post facebook twitter linkedin Tags News and Features Written by: Helena Young Lead Writer Helena is Lead Writer at Startups. As resident people and premises expert, she's an authority on topics such as business energy, office and coworking spaces, and project management software. With a background in PR and marketing, Helena also manages the Startups 100 Index and is passionate about giving early-stage startups a platform to boost their brands. From interviewing Wetherspoon's boss Tim Martin to spotting data-led working from home trends, her insight has been featured by major trade publications including the ICAEW, and news outlets like the BBC, ITV News, Daily Express, and HuffPost UK.