How to Encourage Positive Organizational Culture

Organizational culture is present in all interactions between your employees. It influences how people in your organization approach work, think about problems and engage with their team members.

As a leader, you likely already know that a strong company culture is essential to help keep your employees engaged and productive in their work. This article will discuss why a robust organizational culture matters and how to cultivate one in your business.

What is organizational culture?

Organizational culture is the set of collective beliefs, attitudes, and values at work within an organization, as well as the policies and other communication methods reinforcing them. For example, if your leadership team values input from all employees, they may solicit advice from all team members before changing company policy. This helps create a collaborative work environment and may increase buy-in.

Although often intangible, organizational culture reveals which priorities are most important for your company. The type of company you have, the style of leadership your senior team demonstrates, and who your clients and staff are can impact your organization's culture.

Why is organizational culture important?

Organizational culture is important because it impacts both employees’ work experience and attitudes, as well as their productivity and output.

According to a global PwC survey, 67 percent of executives feel a strong culture is more important for an organization than strategy [1]. Here are some key benefits of building a healthy and successful organizational culture in your business:

• Attract and retain top talent: A strong organizational culture can help you locate suitable applicants and maintain your employee's satisfaction, making them more likely to stay with your company.

• Keep employee morale high: The key components of building a strong company culture—clear communication, inclusivity, collaboration, and flexibility—help keep employees encouraged and motivated.

• Encourage employees to take on leadership roles: When employees are more satisfied with their work and feel that it has purpose and vision, they are more likely to take on leadership roles and look for other ways to go above and beyond.

Read more: Your 2024 Guide to Employee Retention

Types of organizational culture

Although every organization has a unique culture, according to researchers at the University of Michigan, each typically falls into one of four categories: adhocracy, hierarchy, clan, and market [2]. Here’s a breakdown of the four categories and what they entail.

Adhocracy

The word “adhocracy” is a play on the word bureaucracy, meaning to put together a set of rules ad hoc or for a particular purpose. In this organizational culture, processes, and procedures exist to accomplish each task creatively and flexibly.

While bureaucracies are infamous for rigid, unchangeable rules, adhocracies are the antithesis of this concept. In adhocracies, rules can be reinvented and adjusted as needed to meet the company's needs.

Hierarchy

Hierarchy culture is a more formal organizational culture typically found in companies that need to mitigate risk. It usually operates within a well-defined company structure emphasizing top-down decisions, repeatability, and predictability.

Unlike an adhocracy, a hierarchy will defer to the formal process already in place wherever possible.

Clan

In an organization with a clan culture, leadership encourages employees to work in teams, to seek feedback from coworkers before making decisions, or to collaborate on projects and ideas. Clan culture also focuses on providing employees with mentorship or development while rewarding loyalty and teamwork.

Market

Competition defines market culture, and you'll typically find this type of organizational culture at work in companies aiming to achieve the best market position possible. The underlying beliefs of this culture prioritize competition between employees to increase innovation, productivity, and profitability. 

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How to encourage a positive organizational culture

According to Statista, companies took many differing measures to develop a stronger company culture in 2022 [3]. These included: 

• Implementing remote work or work-from-home

• Implementing flexible office hours

• Offering mental health resources

• Diversity, equity, and inclusion initiatives

• Team building exercises

If you want to develop a strong sense of culture in your organization, these tips can help you implement a healthy culture between employees.

Determine your company’s core values.

The first step to a strong organizational culture is to understand which of your company’s core values are most important to reach your goals. You should be able to find these core values in your mission statement or statement of value.

These values will lead you to a stronger company culture and provide the backbone of what your culture will entail. When your employees are passionate about your values and feel a sense of purpose in your mission, they will be more likely to be satisfied with the work.

Build trust by demonstrating company values through leadership.

Organizational culture begins with leadership and trickles down throughout the company. If leadership embraces collaboration, for example, it can send a message to all other team members that collaboration is important.

If your senior leadership does not embody your company's core values day-to-day, their actions send a mixed message to your team about where your real priorities lie. On the other hand, when leadership demonstrates these values, it builds trust with employees.

Be grateful and praise your employees.

Appreciation and gratitude help employees feel more valued, improving office morale. Employees who feel valued and respected are likelier to work harder and be more engaged.

Look for opportunities to celebrate their successes, support their growth, and respect their time. A handwritten note, an offer to pay for training, and reducing the number of meetings go a long way toward showing your appreciation for their work.

Clearly define your expectations and maintain transparency.

When employees know they can rely on the expectations you’ve set in the past, you will encourage stability and predictability. This extends beyond treating employees equally and includes rewarding good work fairly and consistently responding when employee conduct goes against company values. You'll also find that maintaining transparency in all your interactions helps build communication and models your expectations.

Nurture employee well-being.

Morale tends to be better when employees feel better physically and mentally. An environment where they can freely express their concerns, problems, and innovative ideas while engaging productively with their team is one way to help your employees manage their stress levels.

According to Gallup, engagement in the workplace, which a strong culture promotes, has nearly four times as much influence on stress levels than something like work location [4]. You also can endorse a higher sense of well-being and satisfaction. For example, you can develop a company culture that encourages employees to take frequent breaks for short walks or games during their work day.

Develop leaders at any level

Developing employees who innovate, inspire, and strengthen your organizational culture. With the Leadership Academy from Coursera, employees can learn the skills needed to lead your business into the future.

With Coursera for Business, you’ll build effective managers at every level with beginner and advanced-level leadership content, including 40+ SkillSets to drive soft skill proficiency across the entire organization.