“Company culture” – you’ve probably heard the term before. It’s been stressed heavily in the past few decades, with over 85% of S&P 500 companies defining their company culture online. When read aloud, these companies describe company culture with rhetoric like innovation (mentioned by 80% of them), and integrity and respect (mentioned by 70% of them), according to an MIT study.

This preponderance of defining company culture, while helping spread the idea, has done little to explain what company culture actually is. And while company culture can seem simple, it’s arguably one of the hardest phenomenons in the workplace to master. At the same time, it’s when company culture is strong with high levels of perceived integrity that researches finds correlation to good outcomes, namely in terms of higher employee productivity, profitability, better industrial relations, and higher level of attractiveness to prospective employees.

So what is company culture?

Defining Company Culture & Understanding its Value

Company culture is dynamic, living, and largely driven by the business leaders; it isn’t simply a statement on your website defining values. It’s a set of behavioral norms demonstrated by employees, as well as the systems, symbols, and language we you when speaking about your business. It can be thought of in the same frame of cultures we practice outside the workplace – a manifestation of our thoughts, actions and beliefs.

When company culture is positive, it can inspire employees and ultimately lead your business to greater profits. In the same MIT study above, a one standard deviation increase in integrity is associated with a 0.09 standard deviation increase in profitability. Similarly, company culture also has been seen to have direct effects on employee absenteeism, high turn over rates, and productivity. Simply put: As a business owner, if you’re not breeding positive company culture, you’re wasting profits.

3 Areas to Build Positive Company Culture

To inspire positive company culture, there are three key areas to focus on:

1. Leadership: This begins with you, the business owner, but also includes managers and team leaders
2. Internal Employee Dynamics: These are the conversations, attitudes, and feelings of cohesiveness within the organization
3. Customer Facing Values: This the is mission and culture you project to customers

Leadership

The leaders of your business are one of the most powerful sources of positive company culture. It’s with your leadership that you provide culture by example, help direct employee dynamics, and define customer facing values. You and your team leaders have a unique responsibility to the business – not only are you required to execute operations, but you’ll also have to manage the character of your business, inside and out. Emphasize these attributes in your leadership team (and in yourself) to help inspire a positive company culture:

• Authenticity: A key driver for both company culture and respect in leadership, authenticity is one of the most important qualities in your leaders. Your leaders should feel personally invested in the business, believe in the company mission statement, and actively breathe the culture it purports. This shouldn’t have to be forced – good leaders should naturally feel this connection with your business.
• Openness: Leadership should also be a place of openness. Leaders should encourage conversation, creative thinking, and even the occasional bit of conflict. This openness contributes to the evolution of company culture and its refinement.
• Accountability: Leaders should be both accountable themselves and hold employees accountable. In a large part, it’s in making tough decisions and enforcing rules that leaders perform the act of leadership.
• Vision: Your leadership must also have vision – this is the future, actions, and ideas that fuel progress in your organization and bring culture into real life offerings. Encourage your leaders to think about and bring vision into practice.
• Consistency: In order for these qualities to pan out, they need to be consistent. Leadership is a continuous effort, not a irregular one.

Internal Employee Dynamics

Internal employee dynamics are both drivers of company culture and representations of how healthy your company culture is. While company culture is largely driven by leadership and your company values, how your employees act and the norms and habits they adopt help mold the quality and coherency of company culture within the organization. So, while company culture isn’t something employees necessary bring with them into the work place, it is something they have the power to effect while in the work place.

An example of this can be especially clear in customer support: customer service fatigue, for example, can have the tendency to lead to disheartened, negative customer service agents. Bad morale often begets bad morale, and it’s a contributing factor to the higher turn over rate seen in customer service over other departments. This is partly due to this behavior affecting company culture and the way fatigued employees perceive both the deliverables and processes behind their work. They begin to devalue what they do, and what they do it for.

Keeping employee dynamics doesn’t have to be difficult. Consider these few strategies to keep employee dynamics healthy and positive in the workplace:

• Communication: Keeping channels of communication open and making sure employees felt heard is the best way to prevent negative internal dialogues from circulating. Why? Because you as the business owner and team manager get the first chance to solve the problem and revamp your employee’s moral.
• On-going Learning: No one, including your employees, like to feel like they are stymied or not realizing upward mobility. One of the best ways to keep people feeling like they are growing is to keep learning open and to emphasize the time employees should take to hone their skills or master new skill sets all together.
• Have Tough Conversations: If an employee is habitually bringing down the team or creating tension in the workplace, pull that person aside and give them critical feedback. This is part of the accountability you need to show as a leader, and often the employee will respect and feel more positive after the exchange.
• Avoid Micromanagement: Giving your employees a certain amount of freedom goes a long way in keeping them happy and the atmosphere positive. Tasks and duties should be clear, but you don’t need to hold their hand every step of the way. Allow them to make mistakes (learning) and practice patience.
• Keep them Motivated: Do everything you can breathe life and motivation into your team. Show your authenticity. Be that leader that lifts up the team and pushes them toward a goal. Internally, employees will respond to this with boosted productivity and greater sense of attachment to the company mission.

Customer Facing Values

Customer facing values are the propositions made to customers. This can be thought of as your mission statement and unique value propositions, like promises of donations to charity or support of specific causes (like animal rights or organic agriculture). These affect company culture in two ways: first, it gives employees a core set of understanding on what the company stands for, and second, it gives members of your organization a baseline to understand and interpret how well your company lives up to those standards. When your business is as internally cohesive and consistent as it is externally, it helps enrich and fully integrate your forward facing culture back into your internal operations.

• Clarity: Make these values clear and state them on your website, packaging, and around your office. Don’t necessarily overplay these values, but represent them in a sincere, thoughtful way as a business.
• Regularly Revisit Values: Make it a point to nod to company values throughout your work week, in office exchanges, and in general conversation. Show that these values are instilled not just in writing, but also in action.

Focus on Building Your Company Culture

As the business owner, remember that powerful company culture starts with you. Your vision serves as the premise for your operations, and breathing life into that vision is was serves as the foundation for your company culture. Moreover, by aligning your leadership, internal team dynamics, and customer facing values with each other, you’ll be able to craft a cohesive, approachable company culture that drives inspired, high quality work in your employees. Focus on building your company culture from day 1, and don’t forget that it can change and evolve with new team members and ideas.