It's no secret that company culture can make or break a business. In a world that’s increasingly going remote, it’s especially important to focus on developing company culture because employees aren’t physically present anymore. Communication over channels such as Slack or Zoom has its limitations - and people may not always understand each other fully.

But that’s not all. The lack of physical interaction, or reduced interaction in the case of hybrid workplaces, can cause teams and employees to drift apart. And in such a scenario, it’s easy to miss the bigger picture and the shared goals that everyone must work towards. Needless to say, the first aspect of the business to take a hit is the culture. 

And if you’re still wondering if company culture matters in a workplace that’s going remote, then this is for you.

Company culture was always important

In 2015, Warwick University published a paper that said happy employees are 12% more productive. Now, this study may be old - however, the findings are still relevant today, when workplace happiness and work culture are all the rage.

Cut to three years later - 2018. A Gallup study revealed that companies can increase their revenues by as much as 33% by developing a great company culture. And in 2019, a Glassdoor survey revealed that 77% of people considered the company’s culture before applying.

There’s a trend that is revealed by various studies over time, even before the pandemic. But these are just some of the statistics that show why company culture is important for performance.

Company culture is not just annual gifts and great vacation policies. It’s deeper, and percolates from the top down, influencing many aspects of the business.

7 ways company culture drives performance

In the last section, we saw three statistics that spoke about productivity, revenue and employer branding. Let’s take a deeper look into the different facets of the business that the company culture affects, thereby driving performance.

1.Motivation
Who are the employees? A group of individuals you've promised a sum of money in return for their time and effort. 

But, is that all? Will a transaction as simple as this be enough for your business to grow?

Simply getting a task completed is not enough. Your employees must take ownership of the company, and deliver their best as though it's their business. But how do you convince a group of random individuals to have the same amount of passion as you have for your company? 

Well, the truth is, it's not always 100% possible. However, you can still motivate them to do everything they do a little better by understanding them more, and giving them what they're looking for. And that's exactly what positive company culture means - it goes beyond merely giving goodies or gift hampers won't do it.

Employees in companies with a positive work environment feel more recognized and valued. They believe in the company's values and try to align themselves with the organizational goals. If you focus on caring for your employees, they will take care of your company for you.

2. Employee engagement

Commonly, employee engagement is mistaken for fun at work. Games and activities at work are just one component of employee engagement, which is a broader concept.

Building up on our previous point on motivation, employee engagement is what you want to achieve by motivating your employees. Engaged employees see themselves as crucial parts of your company’s success, rather than just another cog in the machine.

Why is this important?

Because your business will be driven by a set of highly motivated individuals who have an entrepreneurial mindset. Think bigger strategies, better deliverables and higher profits! This is the best scenario to be in for any business owner. However, it’s a two-way street. As someone in a role that can shape the company culture, you have to make sure you provide the kind of environment where a leadership mindset can develop.

Some ways to better engage your employees are the automation of routine, tedious processes, the democratization of decision-making, the elimination of micro-management, and so on. Treat your people like peers.

3. New ideas and experimentation

Consequently, when you have a bunch of highly motivated, engaged folks working under you, you’ll see new ideas. 

Employees who follow processes perfectly are great - but it’s the occasional disruption that can take the company to new heights. And for that to happen, the work environment has to be conducive to brainstorming, expression and experimentation. You never know who could come up with a whacky idea that can be a game-changer for your company. And so, it’s on you to ensure you give your people that confidence that they will be heard, considered and even supported.

Even if the ideas fail, the way you handle it is what really matters. A company with a positive culture will turn failure into learning, and encourage the employee who came up with the idea. This is especially important because an employee that tries, fails and learns will go a longer way than one who never tries at all.

4.Team dynamics

A common complaint in HR is the lack of proper team dynamics. This is especially true in remote/hybrid workplaces, where employees tend to get into silos, working individually, and trying to outdo the other. 

While some amount of healthy competition is essential, it’s easy to lose sight of the bigger picture. Employees tend to not align with either the team’s or the company’s goals, and just try to push for their own agendas. Unfortunately, many companies make the fatal error of mistaking this competition for motivation, and end up promoting a negative, toxic work culture instead.

So, next time you're wondering why team dynamics are very chaotic at your workplace, ask yourself if the company culture itself has unhealthy expectations. Signs of a positive work culture are clear goals and milestones at the individual, team and company levels. When expectations are clearly spelled out, individuals learn to work in harmony, complementing each other’s strengths and weaknesses.

5. Public image

One of the things that top companies around the world have in common is great company culture. A positive company culture is not just going to give you happy employees, but great PR value as well. While this leads to better talent coming in, it can also lead to better business opportunities and investments too.

Everyone wants to be seen in a good light - either directly, or by association. And so, companies that have a great image have a higher chance of getting into strategic collaborations. Besides, your employees will feel proud about being associated with your organization, which is a huge motivation boost.

6. Better talent

An increasing number of people today are looking for companies with great work culture (remember the Glassdoor survey?). And folks who are highly talented and skilled won’t settle for anything less because they know they’re in high demand. The positive public image that comes from having a great work culture will automatically attract such people to apply at your company, without you having to put in so much effort in recruitment!

Secondly, great work culture reduces attrition. As a result, your current employees become better and better at what they do. When employees become experts, your need to supervise or direct reduces, and so does the cost of hiring new people

7. Happier customers/clients

When employees feel respected and valued, they will respect and value your customers and clients as well. Employees proactively take ownership of the customer experience, and feel responsible for how the customers feel about the company. Remember, the goal is not to simply close a sale, but to build lasting business relationships so you and your clients can grow together.

Now, building this relationship is not easy, especially in a world where in-person interaction has been replaced by phone/video calls. Your employees become crucial collaborators in this process. They’re the ones who are on-ground, convincing your clients to spend their money on your services. Employees who are highly engaged, and feel personally responsible for the business are more likely to develop great relationships with your clients.

This is not just true of customer-facing roles, but of back-end teams as well. For instance, HR will focus better on hiring people who are the right fit for your target market, the Finance team will be more careful in processing client invoices, the Tech team will work hard on features that will greatly enhance the experience of your clients while using your services. Happy employees = happy customers.

Where do you begin?

If you’re wondering how you can create a positive work culture, you must start at the basics - by listening. Listening doesn’t simply mean sending out a survey and following up with team leaders to have them filled. Instead, you must have frank conversations with people from different levels and functions. There’s a lot that your employees would have to say if only someone were to listen.

Listening is only half the job done, however. You must listen with the determination to solve, and immediately start brainstorming strategies to introduce changes at the org level.

You probably won’t be able to tackle all problems at once. So, pick any one issue, and focus all your energies on resolving that issue. For all you know, a number of other issues may automatically get resolved in the process!

Most importantly, remember that employees mimic the actions of those they report to. A strong company culture depends on its leaders. So paying closer attention to the shared work culture amongst the leadership in your company can be key to understanding the pulse of the company, and to also knowing what the way forward is. 

All the best!

At this point, we really hope you have a direction in mind as to how to go forward with building, or enhancing your company culture. We saw why company culture is important, how it stayed important over the years, the ways in which it can drive performance, and how you can get started. 

Creating a great company culture, or improving an existing one is not going to be an easy task that will bear fruit overnight. You have to define clear objectives, break them down into smaller components, and consistently invest efforts and resources to become successful.