Why Organizational Culture Matters (and 6 Success Factors to Make It Work)

Maura McCarthy
Maura McCarthy

happy employees working together

There’s an epidemic that’s hitting workforces, and it’s leaving a substantial toll in its wake.

It has already cost businesses $350 billion in lost productivity, and workers are even spending more money on health care because of it. And it’s a contagion that hand sanitizer and quarantine can’t control.

It’s negative organizational culture.

And, chances are, it’s touched your company, too.

A growing body of research suggests that having just a few disengaged or incompetent employees can sow the seeds of negative culture and potentially ruin the performance of a whole organization.

During times of stress, when companies as a whole suffer large problems, internal culture hits a standstill. People question their roles in the company (even their whole livelihoods), so it can be difficult for them to focus on making progress. Which, in turn, hurts the work they do for your clients.

(For more on building a powerhouse culture that withstands transition, view our interactive ebook.)

In a nutshell, the external reputation of your organization is inexorably tied to the hope and passion people have for your company on the inside.

But what’s the real, tangible benefit of investing in organizational culture?

Why You Can’t Do Without Organizational Culture

In the late 1990s, Nike was stuck with a PR nightmare.

The public caught wind of its scandalous manufacturing practices, including child labor. While they worked to minimize and downplay the issues, they dropped about 40% in stock value in the course of two years.

Toms Shoes, conversely, has been steadfastly transparent about their supply chain and strives to improve further. Perhaps that honesty is tied to their 300% year-over-year growth for five years.

While a stark example, the point remains: people feel good about doing business with companies that treat their people well. And employees that are treated well do good work.

No matter the industry, companies need an intentional organizational culture to remain profitable, and many industry leaders are ten steps ahead in this regard.

Southwest Airlines, number seven on Fortune’s “Most Admired Companies” list, created an intentional “employee-first” organizational culture.

Their mantra: “We believe that, if we treat our employees right, they will treat our customers right, and in turn that results in increased business and profits that make everyone happy.”

And the profitability that results from organizational culture isn’t inconsequential: a recent study from the University of Warwick found that worker happiness led to a 12% spike in productivity, while unhappy workers proved 10% less productive.

Those facts, among many others, prove the need for an intentional organizational culture. But how is that done?

Vitamins vs. Painkillers

Organizational culture keeps employees happy and bottom lines prosperous. But is it something intentional? And is it more necessary in some organizations than others?

In short, yes, it’s very intentional. And companies of all size, in all situations, need one.

Put it this way: people take vitamins for different reasons than they take painkillers. Vitamins are used to ward off problems, sustain energy and to build up immunity. Painkillers are an after-the-fact resolution to a serious problem.

Whether the severity of your organizational climate issues is relatively minor (grumbling in the break room) or is extremely detrimental (hemorrhaging employees as fast as you can onboard new ones), the same tactics apply, albeit to different degrees.

Still, both vitamins and painkillers are active approaches to resolving a problem. Merely assuming your organizational culture will fall into place will hurt you—through recruitment, retention and profitability.

To make your organizational culture stick, put these organizational culture success factors to use:

1. Focus Groups and Surveys

So your corporate culture needs to change. But how, specifically? Take a close look at what your employees have to say and what would benefit them through two crucial engagement strategies: surveys and focus groups.

Start with an anonymous, company-wide survey to get a reading of what could be improved with your culture, and what could stay the same. Ask a mix of qualitative and quantitative questions and set benchmarks for measurable growth later on.

Once survey results are in, implement a focus group of 12-15 employees of various ages, demographics, seniorities and tenures, and choose a moderator to host an open conversation and collect responses.

2. An Engaging Brand

Marketing expert Seth Godin defines a brand as “the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.”

That definition may summarize the decision for us to choose, say, Starbucks over Caribou Coffee. But the purpose of branding your organizational culture goes a bit deeper: it gets your people to choose you and your message over your competition’s.

A separate, parallel brand should be created to unify your organizational culture and to give your people a theme or concept to rally behind for every touchpoint, big and small, along the way.

3. A Powerful Launch

If a brand happens, and no one knows about it, does it really happen? Not really.

As a rule of thumb, the size and extent of your company’s cultural change should dictate the size and extent of your launch. Regardless, kicking off your organizational culture and introducing people to your brand will definitely take more than an email campaign.

No matter the size and scope of your cultural change, make sure it’s experiential. Bring your brand to life with an event, contest or other engaging tactic that people experience—more than just read or hear about—to get your people wrapped up in your message.

Keep your culture’s brand front and center by purposefully incorporating it into all of the channels that you use to communicate with your team, such as company intranet, monitor screens and more. The more touchpoints people have with your brand at its inception, the stronger the rollout will be.

(See how ITA Group took a deeper look into our own organizational culture.)

4. Continual Consistency and Communications

So your organizational culture is launched and rolling. Now, it’s time to keep that culture top-of-mind at all times. Your goal should be to build your brand into each and every person.

If you don’t spread out your communications across multiple channels, you’re missing a notable opportunity to fully engage with all generations. A mixed print and digital approach is the only way to go.

And, whatever culture-building activities and communications you choose, make sure to weave your organizational culture’s brand throughout.

5. Engaging Tech

In years past, we chatted around the watercooler to learn what was going on in the workplace. Today, it’s a little different.

Social media and instant messaging now rival break room chatter in the workplace. Why not meet your people where they are already—on their smartphones?

With a central communication hub for your culture (think Facebook, but specifically for your people) you can share the latest events and news, all wrapped up in your message and brand.

But don’t stop there. Tie in elements of recognition to reinforce your culture. When managers and employees can reward and congratulate each other online for achieving set goals that align with your culture, including leadership, teamwork and more, you reinforce positive behaviors.

6. Company Culture Ambassadors

One Fast Company article puts the importance of “culture ambassadors” concisely:

“(Your) first customer isn’t external, they are internal. So it's imperative to help them become a brand themselves, or a ‘brand inside a brand’…so they can have more impact for the company and for themselves.”

In other words, your culture needs to be embodied by people who love, live, breathe and champion it. Introducing culture ambassadors can help build that momentum.

When your employees have face-to-face interactions with peers who support the brand, they’ll experience the community in a more personal way.

Who should you tap as an ambassador? Look outside the C-suite. Pick enthusiastic employees to demonstrate and encourage total culture buy-in.

The Secret to Organizational Effectiveness and Bottom-Line Growth?

Organizational culture keeps employees engaged. And when they’re engaged, profitability isn’t far behind:

  • Companies with engaged employees outperform those without by up to 202%
  • Peers and camaraderie are the #1 reason employees go the extra mile, not money
  • Highly engaged employees are 87% less likely to leave the company they work

When your organizational culture is aligned with your goals and your people share the same contagious enthusiasm, you’re setting the groundwork for financial success and an incredible reputation, both internally and externally. Now's the time to build a better culture. Our ebook, "Ensuring Successful Business Transformations Through Powerhouse Culture," shows you five key components of a powerhouse culture and the steps to get you there.

Now's the Time to Build a Better Culture, click here


Maura McCarthy

Maura McCarthy

With more than 18 years of experience as a strategic leader for ITA Group, Maura has helped craft strategic and targeted communication campaigns for some of the world’s biggest and best brands. When she’s not helping ITA Group clients motivate their participants through dynamic print and digital campaigns, you can find her at a Tears for Fears concert or playing with Gabe, her dog.