→ What is Culture & Why Does it Matter?
→ What Positive Culture Looks Like
→ Why Business Owners & Leaders Should Prioritise Culture
→ Problems of Neglecting Culture in Business
→ What These 11 Behaviours & Practices Say About Your Company’s Culture
→ How To Benchmark Company Culture (with KPIs)
→ 7 Practical Ways to Improve Company Culture (with Examples)
→ Video: “Why Culture is King for Business Success”
In a business context, culture refers to the shared values, beliefs, and practices that shape the work environment and behaviour of your team.
Company culture is reflected in daily interactions and situations, including how people communicate in meetings and over email, how managers treat their teams, approaches to problem-solving and decision-making, and even the physical workspace.
Culture matters because it directly affects employee morale, efficiency, and productivity. A positive culture can lead to higher engagement, better teamwork, and improved financial outcomes, while a negative culture can harm performance and profitability.
Businesses with a strong, positive culture have five key components in common.
Focusing on culture is not just about creating a pleasant work environment; it’s about driving business success. Businesses with strong cultures often see:
→ Related: Why Culture is King: How 2 Businesses Improved Efficiency & Profit Through Culture Alone
Ignoring the importance of culture can result in your business being less efficient, high employee turnover, low morale, and poor financial performance. Inevitably this can lead to an increased burden on management and operational challenges, like the below.
By addressing these challenges and prioritising culture, you can create a more efficient, productive, and resilient business.
Company culture is reflected in a variety of daily interactions and situations.
By observing these daily behaviours and practices, you can get a good sense of what a company truly values and prioritises.
Here are some everyday ways company culture may show up in businesses, and the kind of culture you have as a result.
Business owners and leaders can benchmark company culture by observing and measuring several key areas.
By systematically evaluating these aspects, you can get a clear picture of your own culture and identify areas for improvement.
To measure culture, businesses can use KPIs related to workforce engagement, retention rates, productivity and profit margins.
For example, you might aim for:
Regular feedback and cultural assessments can help track these metrics.
Business owners and leaders play a pivotal role in setting and shaping culture. But a strong, positive culture doesn’t come from one of those corporate “team-building” activities where your employees begrudgingly stand in pairs and catch each other as they fall. (Surely it’s not just us scarred by the mere mention of “ice-breakers”...)
Instead, fostering strong company culture comes from the business owner and leadership team’s vision and conduct,
Here are 7 tangible ways to ensure your company culture will be a positive influence on business performance.
Why it matters: Clear values provide a foundation for decision-making and behaviour, aligning everyone in the company towards common goals and creating a unified direction.
Strategy: Clearly define and communicate your company’s core values, like integrity, innovation, and teamwork. Think of them as guiding stars that everyone can navigate by.
How to implement: Create a values handbook that outlines what each value means in practice and distribute it to all employees. Regularly reference these values in meetings and company communications to keep them front and centre.
Why it matters: When leaders model the behaviours and attitudes they want to see, it sets the standard for the rest of the team, fostering trust and respect.
What to do: Leaders should walk the talk. If your company values work-life balance, make sure the leaders are not burning the midnight oil every night. It’s about showing, not just telling.
How to implement: Schedule regular "quiet hours" where no meetings are allowed, and encourage everyone, including leadership, to focus on their tasks or take a break. Show that it’s okay to step back and recharge – even the big bosses need some downtime.
Why it matters: Toxic employees can severely damage team morale and productivity. Removing them can create a healthier work environment and improve overall efficiency.
What to do: Identify and address employees whose negative behaviour and attitudes are dragging down team morale and productivity. It’s like weeding a garden – sometimes you have to pull out the bad to let the good thrive.
How to implement: Conduct regular anonymous surveys to get the lowdown on team dynamics and identify toxic behaviours. Use this intel to have honest conversations and, if needed, make the tough call to let go of those who are poisoning the well.
Why it matters: Open communication builds trust, fosters innovation, and ensures that everyone feels heard and valued within the company.
What to do: Create an environment where employees feel safe sharing their ideas and feedback (weird office stories optional) without fear of retribution. Transparency is the name of the game.
How to implement: Have an open-door policy and regularly schedule "ask me anything" sessions with senior leadership. Use anonymous suggestion boxes or digital platforms to encourage honesty and ensure everyone has a voice.
Why it matters: Continuous learning keeps employees engaged, helps them develop new skills, and keeps the company competitive by fostering innovation and adaptability.
What to do: Encourage employees to keep learning and growing. Whether it’s picking up new skills or diving into a passion project, continuous development keeps things fresh and exciting.
How to implement: Provide a budget for employees to attend conferences, workshops, or online courses. Delegate the creation of a "Lunch and Learn" series where team members can share their newfound knowledge and impress everyone with their brilliance.
Why it matters: Cross-departmental collaboration breaks down silos, fosters innovation, and builds a sense of community within the company.
What to do: Break down those silos and encourage departments to work together. It’s like mixing different ice cream flavours – you never know what awesome combination you might get.
How to implement: Organise cross-departmental projects and regular inter-departmental meetings to share insights and strategies. Encourage job shadowing or rotation programs where employees can experience the roles and challenges of their colleagues in other departments.
Why it matters: Investing in professional development ensures the people leading your business are doing so in a way that aligns with your overall values and goals. Good leaders don’t just happen; they’re made (with a little help from some training sessions).
What to do: Invest in programs that train managers on how to lead effectively and align with the company’s values.
How to implement: Identify current or potential leaders within your team and enroll them in a leadership training program. Follow up with regular coaching sessions to support their growth and ensure they’re implementing what they learn.
“As an accountant, you’d imagine I’m very numbers-driven. But to go one step further, what is influencing those numbers? If something’s good, what created it? If something’s bad, what’s causing it? How do I remedy things, or how do I take advantage of things as they occur?
Two manufacturing businesses that we’ve spoken to in the last six months... and we were talking about culture, team, environment. You might go, “That doesn’t sound very accountant-y.” But remember what I said a moment ago: We’re talking about influence and how to change things.
I want to give you two examples of why culture is so crucial to the overall performance and financial success of your business, and why you and your accountant need to be just as concerned about culture as you are with your numbers.
Firstly, a personal belief I have is if you were to benchmark our businesses we work with, and compare culture and performance, there would be a very close correlation between the best-performing businesses also having the best cultures.
The first of these examples is a business we work with on the east coast of Australia, and they run a manufacturing operation. Their operation employs around 21 or 22 people actually on the job, on the tools. And they said, “18, we love... they’re great, they’re awesome, they’re brilliant; 3, they’re not a good fit for culture, impact on the team - all those things you can imagine - a drain on management, et cetera, et cetera.”
They were able to remove those three people from the business, but keep the other 18. Do you know what happened? Efficiency went up 18%! So three fewer people... they didn’t replace the people... they kept what they had, but did not replace the people who left – the cancerous people. Their efficiency went up, and their output went up 14%! So you’ve lost three people out of 20, you’ve lost around 15% of your capacity, but you’ve gained 14% output. All by eliminating those three people. They did nothing different by their own admission.
That’s at the granular level of your team members. Then you look at leadership and management of your team. Another manufacturing business had been having challenges with their operational manager. The team was happy, but the leader of that team they felt was not giving the direction that they needed for their business. We worked out that from when they employed the operating manager that they wanted to have and that they trusted, they improved their gross profit performance – just in the first three months by 3.5% just by getting good leadership.
Now, you can insert your numbers here... If you’re looking at a million dollars a month, $2M a month, $3M a month... $1M a month in revenue at 3.5% improvement, that’s $35,000 that you’ve just got from nowhere – you’re not outlaying any more costs – just by how your team is led by your operations manager. So great leadership, great team members, produced great results, which give me great numbers, which makes me very happy.”
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