A company’s success depends on employees who are engaged and productive, but many businesses are now finding that attracting top talent and retaining key people is incredibly challenging, even when they increase remuneration.

As today’s highly competitive job market proves, a strong company culture isn’t just a nice perk. A positive culture can help firms hire and keep more productive workers. And when a company’s culture is dysfunctional, morale nosedives, absenteeism and turnover increases, and productivity slumps.

Your company’s productivity and bottom line is directly linked to its culture.

What Is Culture and Why Does it Matter?

Culture refers to a social system with shared beliefs, values, customs, behaviors, narratives, practices, and artifacts that characterize a group and a company. It encompasses the way people think, act, communicate, and perceive the world around them. Culture is shaped by various factors, including history, geography, language, social norms, and traditions.

Having a strong company culture matters for several reasons:

Identity and Belonging

Culture provides individuals with a sense of identity, purpose, and belonging. It shapes our understanding of who we are, where we fit in the company story. Cultural practices and traditions often serve as a source of dignity and help individuals increase their competitive capabilities to be part of a team.

Social Cohesion

Culture plays a crucial role in fostering social cohesion within a company. It provides a framework of shared values, norms, and behaviors that promote cooperation, coordination, understanding, and mutual respect among individuals. Cultural activities and celebrations also bring people together, strengthening social bonds.

Communication and Expression

Culture influences the way people communicate and express themselves. Differences in communication styles can shape interactions and understanding between individuals from different backgrounds.

Knowledge and Wisdom

Culture encompasses accumulated knowledge, wisdom, and experiences passed through different company areas. It includes systems of education, traditional practices, and ways of knowing.

Adaptation and Resilience

Culture helps enterprises adapt to changing circumstances, situations, and challenges. It provides a framework for problem-solving, decision-making, and coping with adversity. Cultural values and practices often contain lessons and strategies for resilience, enabling companies to navigate and overcome an array of challenges both internal and external.

Diversity and Understanding

Culture celebrates diversity by recognizing and appreciating the differences among individual styles, personalities, and groups. It promotes cross-cultural understanding, empathy, and respect. By engaging with diverse cultures, people can broaden their perspectives, challenge stereotypes, and foster a more inclusive and competitive company.

10 Symptoms of a Weak Company Culture

How do you know if your company’s culture needs improvement? Here are some common symptoms to look out for — and the damage they can cause.

1. Lack of employee engagement: Employees who feel disengaged and unmotivated in their work show signs of low productivity, absenteeism, or a lack of enthusiasm.
2. High employee turnover: If employees don’t feel valued, supported, or connected to the organization, they are more likely to seek opportunities elsewhere.
3. Poor communication: Communication breakdowns, lack of transparency, and ineffective internal communication channels can result in misunderstandings, rumors, and a general sense of confusion among employees.
4. Lack of teamwork and collaboration: Employees may struggle to work together as a cohesive team due to silos, internal competition, or a general reluctance to share information or support colleagues.
5. Resistance to change: Employees who resist change and are reluctant to adapt to new initiatives or processes can hinder growth and innovation within the organization.
6. Low morale and negativity: When morale is low or there’s a negative work environment, employees may express cynicism, complaints, or a lack of enthusiasm, which can impact the overall mood and productivity of the workforce.
7. Lack of clear values and vision: Without clearly defined values, a shared vision, or a sense of purpose, employees may feel disconnected and uncertain about the direction of the organization.
8. Micromanagement and lack of autonomy: Managers who exhibit micromanagement tendencies can reduce employee autonomy and decision-making power. This can stifle creativity, diminish employee empowerment, and limit individual growth.
9. Inconsistent performance and quality: Without a strong sense of accountability and standards, employees may not prioritize excellence in their work.
10. Lack of employee development and recognition: Neglecting employee development and recognition efforts can result in limited opportunities for growth, reduced job satisfaction, and diminished loyalty among employees.

It’s important to note that these symptoms can vary in degree and combination, and their presence does not necessarily mean a company’s culture is irreparable. However, recognizing these signs is crucial for organizations to take proactive steps in improving their culture and creating a positive, supportive work environment.

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Jeff Hanhausen is CEO of The Hanhausen Group, which produces high-performing teams and competitive culture with a curriculum based on meeting commitments and making promises. For more than three decades, he has worked with business owners across industries to improve enterprise value.

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