How does organisational culture impact employees?

Company's organisational culture

Company culture, while sometimes hard to clarify, is one of the most important elements of your organisation. Whether they know it or not, every company has a culture. Sometimes cultures develop naturally, while other times an organisation purposefully chooses to create a culture.

Culture ties into your company mission and values. The mission of the company sets the direction and purpose, while values define the culture, which describes the environment around how the mission is achieved. A strong organisational culture is positively correlated with employee motivation, innovation and satisfaction, as well as good leadership behaviour, so it’s important to understand it.

There are six different types of corporate culture, and there is often overlap within any organisation.

Types of organisational culture

Empowered culture

An empowered culture is one in which every individual in your organisation feels engaged in the operation of, and actively participates in the success of, the business. This type of culture encourages people to take initiative in leading new activities, take ownership of their roles and are responsible for their outcomes.

Some benefits of creating an empowered culture are that issues are proactively identified and addressed before they become problems, by employees who feel comfortable bringing ideas and solutions to the table. Individuals are actively engaged in improving the organisation, by taking ownership of roles and ideas, and are accountable for how they work.

Empowered company culture

Innovative culture

In certain industries, innovation is prized and even necessary for the ongoing success of the organisation. A culture of innovation prioritises coming up with fresh ideas but also, crucially, to engage with the process of bringing those ideas to life. The impact of organisational culture on creativity and innovation is extra clear in this example.

A culture of innovation creates an environment in which employees are encouraged to communicate their ideas. There is a commitment to innovation that permeates every level of the organisation, which builds constant innovation and pushes the company to a leading position in the industry.

Sales culture

Creating a sales culture at your organisation drives the importance of supporting sales-focused activities. A sales culture can help employees be better able to promote new products and services, approach new markets, develop a sales process in line with the company’s values, and be supported by other sections of the organisation.

Creating a sales culture develops a sales force that is an expert on every product and service the company offers, and that is driven by a commitment to meeting and beating KPIs. All other teams in the organisation will be dedicated to support the sales force as a priority.

Customer-centric culture

Employees in a customer-centric culture are encouraged to view everything through the eyes of the customer and to make decisions based on that perspective. This type of culture runs through your entire company, even among those who never interact with customers, which is vital for organisations that rely on good customer service to function.

Some benefits of creating a customer-centric culture are:

  • Company-wide customer accountability ethos.
  • An increase in customer satisfaction and therefore revenue.
  • A workforce committed to delivering exceptional customer experience.

Culture of leadership excellence

In this style of culture, employees at every level have total confidence in company leaders. Leaders, in turn, demonstrate their commitment to their role by participating in ongoing leadership development programs and undertaking mentoring roles.

In this type of culture, the impact of organisational culture on employee motivation becomes clear: employees with natural leadership skills will easily move into leadership positions, and those with natural tendencies towards leadership who lack the skills will be nurtured.

Creating a culture of leadership excellence will create better talent retention through internal employee development, which will also lead to strong leaders in every area and level of the company.

Leadership excellence culture

Safety culture

A culture of safety is a commitment to protecting the health and wellbeing of every individual in your organisation. It requires having certain safety policies and procedures in place, with an emphasis on ongoing training to ensure everyone can perform their job safely. This is particularly relevant in industries that involve physical labour, heavy machinery, moving parts or hazardous materials.

A culture of safety means team members will have a proactive approach to safety compliance and a feeling that employees and their safety are valued by leadership. Companies that prioritise this culture will find they have fewer incidents, which means lower costs.

These six types of organisational culture do not necessarily exist alone. It is likely, and in fact preferable, that your organisation exhibits elements of two or more of these cultures.

Impact of organisational culture on employee performance

Organisational culture impacts how well you can attract and retain talent, and affects employee satisfaction, motivation and performance. It’s vital, therefore, to understand the types of organisational culture and codify your own company’s culture so you can ensure you’re building the right type to maximise your organisation’s performance.

To maximise its benefits, your organisational culture must be strong, clearly communicated and constantly reinforced. This will help you to operate and follow your purpose with intention, uncover gaps in your mission and values then improve on those areas, and improve employee creativity, innovation, motivation and performance.

If you’re ready to improve and clarify your organisation’s culture, our Championing Organisational Change and Driving Impact Digital Badge can help you successfully communicate and implement your vision for success. This short course will help you understand the importance of defining future strategies, taking ownership of new processes and demonstrating a commitment to project outcomes, developing your essential leadership skills.

This course, one of six Smart Skills Digital Badges, takes around 12 hours to complete, and is 100 per cent online, on demand and mobile friendly. On completion, you’ll have a sharable and verifiable qualification, as well as the skills to lead your organisation into a new culture for the future.

Team being impacted by organisational culture

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