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What is company culture and why is it important?

9 min read | 6 February, 2019 By Rachael Down


Company culture is an HR buzzword with a difference. Originally hitting headlines in 2017, we’re pleased to see it jumping from the page (or screen) right into the heart of our offices.

Gaining momentum throughout the UK and spreading worldwide, company culture is changing the way we think about work and urges us to consider how we can conduct business for the better. 

So, let's delve into the basics of what company culture is and why it is important for SMEs.  

What is company culture? 

what is company culture

Referring to an organisation’s social order and setting guidelines for expected work practise, company culture (AKA organisational/corporate culture) has the power to make or break a business; big or small.  

As discussed in our Culture Economy Report, there are many definitions of company culture, which aren’t considered reducible to any of its component parts.  

It’s not just the values plastered on the walls, nor is it the office fruit bowls, bean bags or table-tennis tables.

It isn’t even the leadership style. Company culture is all the above and more. It's how a company cultivates business growth by offering each employee a voice, while encouraging healthy day-to-day attitudes, behaviours and work ethics.  

Great company culture sets the foundations for real, tangible business growth. It’s based on honest, productive conversations and helps companies to identify issues and collectively form resolutions.

1. Breathe_Company Culture Framework Graphic_

SME company culture 

SMEs are at an advantage here. With less large corporate hierarchical systems and more millennial-led startups emerging each year, internet-led entrepreneurism encourages SMEs to work on their business from the inside out.  

Gifted with more opportunities for face-to-face communication and flexible working conditions, SMEs can respond quickly and adapt their company culture to gain a happy work-life balance for its employees from the start.  

On the flip-side, ignoring the needs of your employees and adopting what is known as a ‘toxic company culture’ heralds disastrous results for overall business performance.  


Why is company culture important? 

In a nutshell, cultivating a great company culture is important not only for employee engagement, happiness and retention, but also, plotting the blueprints for a thriving business; regardless of the economic climate 

Gaining significance and speed over the last decade, company culture encourages CEOs, HR consultants and company leaders to ask the right questions that lead to honest evaluation and pushes for change. 

After all, it is only when we identify and establish what could be changed that we can then set about resolving issues and conflicts to progress and grow above our own limitations and, indeed, business competitors. 

Learn to level up. Download the Culture Economy Report 2020 and understand how to put your people first. 


The importance of company culture: 

Reputation-led results 

It’s no lie that reputation is everything. In a time where online publishing, blogging and company trolling is prolific, media scandals and recent headlines have given voice to large and small business malpractice. 

Thanks to the necessary exposure of misplaced company and employee welfare practices (such as BBC gender pay gap, Uber and not forgetting the Harvey Weinstein #Metoo campaign), HR consultants are urged to push past the ‘fluff’ and address what really matters; their people.  

If we can take anything from the pitfalls of these Big Players, it is that corrupt company cultures are toxic to productivity and profit. Offices that dismiss the importance of employee independence, flexibility and role fulfillment are at risk of increasing consumer distrust through reputation slamming. 

On the other side of the water cooler, we are now seeing the positive impact that company culture reviews have on not just individual employees but businesses as a whole. (Kudos to Uber and Netflix for learning from their mistakes.) 

small business culture breathe (1)

Employee and economic health 

Employee and economic health are important measures of company culture. 

Great company culture theories, such as the HBR Framework and Schein Culture Model clearly demonstrate that companies who measure profit and monetary incentives higher than human empathy and employee understanding are more likely to damage business performance.  

Findings from the culture economy report go further still; showing direct links between corrupt company cultures, employee satisfaction and tenure.  

Such fractured working communities not only jeopardise an employee’s mental and physical health but can also lead to an adverse effect on our society and UK economy. 

Business growth, longevity and results 

Great company culture positively impacts business growth, longevity and results 

Contrary to what some HR specialists are led to believe, studies demonstrate that the most profitable companies are not actually the most profit-focused. Through switching their target from profit to purpose, employees and employers alike gain greater role-fulfillment, which in turn increases productivity, efficiency and quality results. And what does quality lead to? Profit of course.  

So, by ensuring that all employees understand their company’s culture, objectives and targets, all team members can start on the right page.

Setting the stage for success, when a company begins with solid foundations, their employee engagement, staff retention, business longevity and growth targets are more likely to sync, leading to results the whole company can be proud of. 

Already nailing culture? Top job. If you're part of a SME that's driving business by putting people first, we want to hear from you for our Culture Leader's List 2020. Find out more. 


Practice what we preach: Breathe 

We like to practice what we preach. Thanks to our easy-to-use cloud-based HR software, we’ve ditched the clunky spreadsheets and use SaaS technology to our advantage. Less time in Excel leaves more time to establish and communicate our own great company culture.

So, if you haven’t already, head over to sign our Culture Pledge and just remember to Breathe.

company culture - try it for free

Posted on 6 February, 2019

By Rachael Down

in Company Culture

Tag Company Culture

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