The Definitive Guide to Company Culture

We believe that a vibrant company culture that supports and nurtures our employees is so important that it is a key to our success—and a unique and sustainable competitive advantage.

Since we launched BambooHR in 2008, we’ve found again and again that what’s good for our employees is also good for our organization. For example, one of the BambooHR core values is “Enjoy Quality of Life.” We help our employees do that by encouraging a healthy work-life balance. We come together and do amazing work during business hours. Then, everyone leaves their work and goes home while they still have enough time and energy to enjoy the evening with their loved ones.

As a result, when we return to the office the next day we are rested, refreshed, and ready to continue doing our best work. Over the years, we have learned a lot about establishing and improving company culture. Now we want to do something meaningful with that knowledge: share it with you. That’s why we wrote this ebook.

We’re not saying you should copy everything we (or anyone else) may do. That never works because (A) every organization, BambooHR included, has more to learn and aspects to improve, and (B) every organization and culture is different. Instead, in these pages you’ll find principles and best practices that can help any organization develop and maintain its own thriving culture.

And there’s more. Throughout this ebook, you’ll see important insights from our recent culture survey of more than 1,000 small- and medium-sized businesses. Find out what our research reveals about company culture and the powerful role that HR professionals can have in establishing and improving it. See how your organization compares to others, and benefit from their experiences.

Company culture is often called the personality of an organization.

Company culture is a shared set of workplace beliefs, values, attitudes, standards, purposes, and behaviors. It reflects both the written and unwritten rules that people in an organization follow. Your organization’s culture is the sum of all that you and your colleagues think, say, and do as you work together.

If that sounds important, it is. In the 2019 culture survey conducted by BambooHR, an overwhelming 94 percent of respondents agreed that culture is related to their organization’s success. Sixty-three percent said it’s very important or essential.

Some elements of company culture are easier than others to shape and guide—and that’s okay. Fostering a vibrant culture doesn’t require having complete control of it (which is unrealistic to expect); it’s about creating an environment where people can thrive and do their best.

As we explain what company culture is, it’s also important to know what it is not. People often associate company culture with superficial perks for employees, like free food and video games in the workplace. Such things don’t define a company’s culture, although they may be welcome expressions of it.

No Two Cultures Are Alike

Every company culture is different—the result of a unique combination of many factors such as the organization’s mission, values, leadership, goals, obstacles, industry, and position in the marketplace.

Every organization develops a company culture, whether they realize it or not. That’s because even if an organization does nothing, culture forms and evolves on its own. But an unguided, unstructured culture may do more harm than good. It’s important to take steps that help shape and strengthen your culture in positive ways and align it with your organization’s values and goals. Otherwise, there could be a serious disconnect between how your company defines its culture and what its leaders and employees actually do. That’s a telltale sign of weak company culture—and something to be avoided at all costs.

Having a strong company culture that treats employees right can do a lot more than give you a warm feeling inside. According to Chron, ERC, and other sources, great culture helps foster enduring benefits like these that strengthen your organization and improve your bottom line.

• Increased Engagement
• Creativity and Innovation
• Reduced turnover and associated recruiting and training costs
• Improved customer experience and satisfaction
• Higher Productivity
• Increased revenue and profits
• Improved Morale
• Greater interest from top talent

The list of potential benefits goes on. Sounds too good to be true? It’s not. When employees enjoy their jobs, they strive to improve their work and their workplace. That’s why maintaining a strong, appealing company culture is not only the right thing to do, it’s a smart business strategy.

In The Wizard of Oz, young Dorothy stepped into a magical place that was nothing like the farmland back home and declared to her little dog, “Toto, I’ve a feeling we’re not in Kansas anymore.” She quickly recognized the differences between her own culture and another. (In this case, it would have been hard not to.)

Just as each land’s culture is different from others, each company’s culture is unique too.

Knowing how your company culture differs from others can help you develop strategies tailored to your firm’s unique opportunities and challenges. You can’t do that by trying to copy another organization’s culture, no matter how successful they are. It won’t work because the other guys don’t have exactly the same people, history, workplace practices, values, environment, and other factors that make your firm’s culture as unique as your fingerprint.

Defining Your Company Culture

Though no two cultures are exactly alike, most organizations can be classified into cultural categories that share key characteristics. Recognizing which culture types your organization identifies with can help you define and refine your culture.

Research in Harvard Business Review (HBR) has identified eight distinct culture styles:

What a Great Company Culture Looks Like

Even though company culture can’t be copied, you can learn a lot about developing and maintaining a great culture from others’ examples. Organizations with a truly great culture don’t all look alike and may have a very different mix of the eight culture styles than you do. But, according to Women of HR, they often share one key characteristic: “a belief in really, truly looking out for the people who work there.”

It’s as simple—and as complicated—as that.

What does this core belief look like in action? As you might expect, it varies from one organization to the next depending on needs and circumstances, but here are some examples of common characteristics in great company cultures:

• Encourage diversity: Organizations with great cultures hire different types of people who add new perspectives and skills instead of people who all think alike.
• Helping new hires feel welcome: From the beginning of onboarding, these organizations provide the tools, training, and guidance new hires need to settle in and do their best work.
• Engage employees: They promote performance, growth, and loyalty by providing meaningful learning opportunities and appealing career paths.
• Including Everyone: They make sure every employee is heard, valued, and respected.
• Recognizing and rewarding: They regularly provide helpful feedback and sincere appreciation.
• Preparing for the future: As the industry and workforce change, they proactively adapt to their employees’ evolving needs and interests to sustain each individual’s success.

Implementing these cultural best practices will put you well on your way toward making your organization a great place to work—and a place your employees won’t want to leave. As Dorothy said when she returned from the land of Oz to the culture that she loved best, “There’s no place like home.”

Everyone in your organization can play a part in developing and maintaining a great company culture. Executives forge initiatives that shape it. Middle managers put those initiatives into action.

And employees can strengthen your company’s culture by supporting its ideals. We’ll discuss these three roles in more detail below.

But first, we want to shine the spotlight on HR professionals. In many organizations, they are the ones who quietly do much of the heavy lifting that keeps company culture and values moving forward. BambooHR cofounder Ben Peterson says, “HR is the company’s greatest advocate of values because they are so uniquely positioned within the company to have the greatest impact.” Yet HR professionals often work behind the scenes, so they don’t always get as much credit as they deserve—or as many opportunities to make a difference.

It’s encouraging that 66 percent of our culture survey’s respondents said that HR plays a big role in creating or building their organization’s culture. But 38 percent also said that HR’s role should be greater than it currently is—a vote of confidence and an opportunity for HR professionals to play a more active and strategic role.

Getting the Most from HR

Here are some of the many ways HR professionals can influence company culture:

• Collaborating with leaders to define company culture and make adjustments as it evolves over time
• Counseling leaders about wise strategies that align culture initiatives with the organization’s values and goals
• Counseling leaders about wise strategies that align culture initiatives with the organization’s values and goals
• Maintaining open communication and feedback between employees and leaders to improve company culture
• Attracting job candidates who will strengthen and diversify company culture and filtering out those who won’t
• Making culture a conspicuous part of onboarding and everyday employee experience
• Rewarding and recognizing employee behaviors that support company culture

Is your organization taking advantage of all that your HR professionals can do to sustain and strengthen its culture? Make sure HR’s voice is heard at every opportunity. Now, let’s talk more about how executives, middle managers, and employees can each play a vital role in promoting company culture.

Executives

As leaders and decision makers, executives establish an organization’s values, approve company culture initiatives, and allocate resources to them. Executives need to take an active role in making sure company culture continues to benefit their organization and raise red flags if it doesn’t. Company culture can only thrive when top leadership accepts responsibility for it.

Equally important, executives have a uniquely powerful opportunity to teach the organization’s values and advocate for its culture by the example they set. Their good behavior naturally trickles down and becomes a key part of company culture. Executives shape company culture both by speaking to employees about it and by the attitudes and behaviors they display at work.

As the fictional hero Spider-Man famously said, “With great power comes great responsibility.” The powerful folks in the C-suite may not be superheroes, but they have a responsibility to strengthen company culture and values by embodying them—an opportunity not to be missed.

Managers

Middle managers are on the front lines of an organization, in close contact with both the executives they report to and the employees they supervise. That makes them an invaluable resource for improving communication about company culture and values.

Managers are doers and fixers. They can administer culture initiatives, keep an eye out for culture problems and help solve them, solicit valuable employee feedback, and help employees stay focused on the organization’s policies, values, and goals. No wonder Gallup research finds that across organizations managers are responsible for 70 percent of the variance in employee engagement.

Good managers foster a culture of trust where employees talk openly and regularly with them, whether it’s in weekly team meetings, formal performance reviews, or just chatting around the water cooler.

Like executives, managers also need to model company culture and values. For instance, if your culture focuses on outstanding customer service, managers need to do more than tell their team to treat customers better; they should get out on the sales floor and show team members how to delight customers and exceed their expectations.

Every problem a manager faces is an opportunity to show employees their company culture in action and at its best.

How many of your organization’s operational challenges are related to culture?

Employees

No matter what kind of work they do in your organization, each non-managerial employee is responsible for company culture, too. As they do their jobs and collaborate with teammates, employees need to support company values and goals and align their behaviors accordingly.

Attitude has a lot to do with it. If employees feel good about where they work, find their jobs meaningful, and believe in the organization’s future, they are likely to project a positive, can-do attitude that reinforces and strengthens company culture. Leaders are responsible for providing a nurturing environment and consistent guiding principles; employees are responsible for supporting them.

As you define your vision of improving company culture, listen to employees’ unique perspectives. Talk with them, survey them often, and take their feedback seriously, even if it’s not always what you’d like to hear. Employees usually have a good idea of where your workplace culture currently stands, and they know when there’s a cultural misfire—where the company says one thing about its culture but the reality is something else.

One more thing: Sooner or later, just about every organization has to deal with a few dissatisfied employees who can damage company culture if left unchecked.

As much as you might wish everyone loved your company, it’s important to listen to fault-finders’ feedback, too. Are there grains of truth in what they say, even if they say it in a disagreeable way? If so, use these insights to improve your culture going forward while preserving your values.

It’s essential to stay consistent with your mission, vision, and values. Unfortunately, as employees change over time, a few may no longer align with these ideals, and this sometimes leads to turnover. If an employee doesn’t fit into your culture and is jeopardizing it, you may have no alternative but to let them go. This might sound like punishment, but it’s not—it’s simply doing what’s best for everyone involved. A truly dissatisfied employee will likely be happier in another organization where they are a better fit, and their departure will allow your other employees to move forward, improving and strengthening your culture.

Better Together

As you’ve seen, everyone can play an important part in promoting a great company culture—and the effect is magnified by collaboration. When employees, managers, and executives unite their efforts and also take full advantage of HR’s participation, they can make more progress together than they ever could separately.

Our in-depth survey of more than 1,000 small- and medium-sized organizations turned up some important trends and intriguing insights about company culture. In addition to the findings you’ll see throughout this ebook, here are four you should know more about.

1. Even organizations without formal HR staff recognize how HR contributes to culture.

When we asked, “How much of a role does HR play in creating or building your organization’s culture?” We were surprised that 31 percent of respondents in firms with no HR staff said HR plays a big role. What gives? How can non-existent HR employees contribute?

The answer may be tied to what experts call the “informal” HR roles that may exist in such organizations. Put simply, that means even if no one has been hired to be an HR worker, someone still has to take care of HR responsibilities. Many of the people who shoulder those tasks recognize how important HR and company culture are, even though they were hired to do something else.

Again and again in our survey, you can see similar striking differences between organizations that have an HR staff and those that do not. For example:

• 59 percent of all respondents said their culture supports their business goals a lot or a great deal, compared to only 29 percent of those whose organizations have no HR staff.
• 72 percent of all respondents like their company culture, but only 43 percent of those with no HR staff feel the same.
• 34 percent of those with no HR staff don’t do anything to measure employee satisfaction, compared to only 16 percent of all organizations.

The takeaway: many organizations without a formal HR staff realize they’re missing out on important benefits—a story that decision-makers need to hear and respond to.

2. Some aspects of company culture are more influential than others.

We asked respondents about 10 characteristics of their company culture and whether they enhance, detract from, or have no effect on it. More than half of the respondents said that each aspect enhances their culture, but some characteristics ranked higher than others:

3. Organizations should embrace risk-taking instead of fearing it.

Only 27 percent of those we surveyed said risk-taking is encouraged a lot or a great deal in their organization. We discovered that this could be a missed opportunity for company culture.

Digging deeper into our results, we found that risk-taking is strongly linked to a well-liked culture. An overwhelming 92 percent of those who say their organization vigorously promotes risk-taking say they like their company culture.

In contrast, only 53 percent like their culture in firms where little or no risk-taking is encouraged.

These results show that embracing risk-taking may be worthwhile for any organization that wants more employees to bond with its culture. And in organizations that depend on innovation to thrive, risk-taking is even more valuable. Extraordinary discoveries are more likely when employees are encouraged to experiment and to keep trying even when failures occur. As bestselling author Laszlo Bock said in Work Rules, “If your goals are ambitious and crazy enough, even failure will be a pretty good achievement.”

4. One thing really matters when it comes to employee satisfaction.

In today’s tight job market, keeping employees happy is more important than ever. But where should your organization focus its efforts?

We pitted six activities that are associated with strong culture against each other, asking which one contributes the most to employee satisfaction.

Recognition and rewards was the winner by a wide margin:

• Recognition and rewards: 31 percent
• Perks, such as food: 20 percent
• Regular one-on-ones: 13 percent
• Team meetings: 12 percent
• New employee training: 12 percent
• Personal interaction with upper management: 10 percent

This doesn’t mean any of the runner-ups aren’t worthwhile, or that other options aren’t worth considering. But the point is clear: employees value being appreciated and having their accomplishments acknowledged. Don’t ignore recognition and rewards!