Every business has a culture—that’s right, even yours! But what makes the difference between a healthy company culture and a toxic one? Read on to find out.
First, let’s get clear about what company culture is. It can seem kind of hazy, but culture is just the collective attitudes and behaviors of your organization. Culture is how your company does things—and it’s not one-size-fits-all. Now that you know what it is, you may be asking: Why is it important to focus on company culture? That’s a great question! And we have the answers (and some tips you can use to transform your business). Let’s get into it.
The way your team experiences your business has a major impact on how effective they are in their roles. A miserable work experience (aka a toxic culture) is bad for your business’s brand and growth potential, as well as team members’ productivity and mental health.1 And the opposite is true too—a healthy culture keeps your team happy and engaged in their roles and contributes to the growth of your business. According to a survey by Gallup, businesses with the highest employee engagement are 23% more profitable than those with the lowest employee engagement.2
Characteristics of a Toxic Company Culture
So, what does a harmful company culture look like? It may be glaringly obvious in some areas, but other symptoms can be subtle. Here are a few signs you may have a bad company culture:
- Team members don’t feel safe to communicate openly with leaders
- Illegal, dishonest or unethical behaviors (especially by leadership)
- High team member turnover rate
- Pressure from leaders to constantly work long hours, not take vacation days, and neglect work-life balance
- Team members constantly fear failure or being fired without warning
- Gossip and work-related drama
- Passive-aggressive communication
Examples of Companies With Great Cultures
Every company, big or small, has a workplace culture. Here are some examples of healthy company cultures:
This online shoe giant consistently gets ranked as one of the best corporate cultures in America—and that doesn’t happen by accident. When describing their company culture, Zappos said, “We’ve learned that if you identify your company’s core values, hire by them, onboard team members by them, and truly live by them; then your business is on a long-term path to success, profit and growth.” From its hiring practices to customer service to the work environment, everything and everyone reinforce the company’s core values.
Named one of Inc. magazine’s Best Workplaces of 2020 and listed in FlexJobs’ Top 100 Companies to Watch for Remote Jobs in 2021, the virtual staffing firm has built a highly engaged team and award-winning culture—even while working 100% remote. BELAY attributes that to knowing how culture is really built: with values, not gimmicks. “[Our culture is] not Ping-Pong tables, fully stocked beer fridges, and nap pods,” said BELAY. “We instill our mission and values of gratitude, teamwork, vision, passion, fun and God into every one of our nearly 1,200 remote workforce team members.”
Not to toot our own horn, but yes, Ramsey Solutions is known for our culture. Named one of the Best Places to Work in Nashville 11 times, thousands of people apply to work at Ramsey Solutions every year. To name a few of our perks: Communication is open, every team member knows they’re doing work that matters, schedules are flexible, and work-life balance is encouraged. Add to that our amazing leadership who encourage their teams to personally grow, and you can see why it’s so popular to work here.
6 Tips for Improving Your Workplace Culture
Okay, so culture is important. But how do you make sure yours is healthy? Well, whatever your culture is like, it’s either being created or tolerated. Meaning, you’re either intentionally leading your business’s culture, or you’re just accepting whatever behaviors your team dishes out.
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If you’re worried your team (including leadership) might be a bit toxic, there’s good news: Leaders get to decide what they want their workplace culture to be like and can make changes. Here are six things you can do to improve your company’s culture:
1. Lead With Values
Create your culture by leading your business with core values. These values answer the question, “What do we, as an organization, stand for?” By clearly defining what your business stands for (and what it doesn’t), you’re making a decision to create a culture where people with similar values can love the work they do—and thrive.
Core values communicate:
- What you expect from your team
- What your team can expect from you
- How your business should interact with customers
Your core values can also help you make good hires, better decisions and a strong impression in the marketplace. So, if you haven’t already, you definitely want to spend some time thinking about this and putting in the work to write out your company values. But remember, just defining your values isn’t enough—you actually have to live them out! And your team needs to do the same.
2. Give Your Team a Mission
For many business owners, a mission statement is just a checked box—something they put on their website and forget about. They don’t really use it to inspire, make decisions, or drive their business forward. But doing that has a pretty negative effect on company culture, team member engagement and productivity.
Team members feel it when a business doesn’t have a genuine, meaningful mission. In fact, it’s so important that one survey found over half of U.S. employees said they have taken a pay cut for a job that provides more meaningful work.3
People really want to do work that matters. And it makes a big difference to their performance. One study shows that people who feel like they do meaningful work are more likely to work harder and retire later in life.4 Bestselling author and speaker Simon Sinek said it well: “Working hard for something we don’t care about is called stress. Working hard for something we love is called passion.” To have a highly engaged culture, you need to lead your business toward fulfilling a clear, aspirational mission. So, ask yourself: Why does my business exist?
3. Perfect Your Hiring Process
The people you invite on your team can have a big impact on the health of your culture. Think about it, have you ever made a bad hire? If so, you know one killjoy can undermine morale, slow things down, and put your business’s reputation in jeopardy. And turnover is expensive, whether a team member chooses to leave or you show them the door. In fact, the Work Institute estimates that employers lose $15,000 every time a team member leaves—and that’s a conservative number.5
So, tighten up your hiring process. Don’t just look for skills and experience alone. Look for character qualities that align with your company’s core values—and take your time! We know when you’re in a bind that it can be tempting to get anyone with experience in the door. But the biggest mistake leaders make when hiring is rushing the process. It takes time and conversation to really get a sense for a person’s personality, values and passions—all of which are important for figuring out if a candidate is a good fit for the culture.
We recommend a pretty thorough approach when it comes to adding new members to the team—our hiring process actually has 12 steps. That may seem like a lot of time and effort, but hiring the wrong person can cost you a lot more.
Free Download: The EntreLeader’s Guide to Hiring
4. Stop Tolerating Office Gossip
Most people accept workplace gossip as par for the course. People talk—no big deal, right? Wrong! Gossip is destructive—it can kill team unity dead. We define gossip as: saying something negative about anyone or anything to someone who can’t do anything about it. It’s better when team members only tell their leaders about the bad stuff—not each other. In fact, we follow a rule: Negatives go up, positives go all around. Celebrate with everyone, but if someone has a problem, they need to take it to someone who can do something about it. Otherwise, it just creates drama, speculation, mistrust, confusion and the like. So, get rid of gossip!
Are you guilty of gossip? Your first step to turning things around in your business is to make sure you’re setting the example. Then communicate to your team that gossip won’t be tolerated at work anymore. Finally—and this is the hardest part—stick to your guns. You have to follow through and hold people accountable to your no-gossip policy if you want to remove it from your culture.
Free Download: No Gossip Implementation Guide
5. Communicate With Transparency
Lack of information can lead to confusion and frustration, and many people just have a bad habit of assuming the worst. That’s why companies with winning cultures have high levels of communication with their teams. You don’t have to share everything, but you have to be transparent with your team to build trust. It may seem simple but communicate early and often with your team. And not just about the bad stuff—be proactive about celebrating too.
Here are a few topics to cover with your team regularly:
- The mission of the business
- Core values
- Vision for the future
- Team transitions and changes
- Revenue goals and how the business is performing
- The why behind business decisions
- Your appreciation
All of these things build deeper, stronger connections with your team and keep everyone on the same page with what’s going on in the business. And don’t worry, if communication isn’t your strength, our free Team Communication Field Guide can help you cover the basics.
6. Show Them the Money
Working hard and not getting paid well is a major buzzkill. While money isn’t the only thing that matters to team member engagement, it does matter. If you want people who are super fired up to help your business win every day, then make sure you’re not only paying them well but also incentivizing them—including non-salespeople—for excellent work.
Here at Ramsey Solutions, there are numerous compensation plans—from commission for salespeople to monthly profit sharing and bonuses. Maybe you can’t overhaul your entire payroll, but there are other creative ways you can reward your team (think: team outings, an occasional complimentary lunch, and a surprise gift card for that assistant who went above and beyond during a tough week). To get more ideas, check out The EntreLeader’s Guide to Compensation.
Changing company culture is no easy feat—but you can do it. And it’ll be worth all the hard work, because when you create a company culture where people are unified and love what they do, there’s really nothing you can’t achieve as a team. And if you need some hands-on guidance, join us for EntreLeadership Master Series. This conference will give you real-life, proven advice for growing your business and building a best-place-to-work-ever culture.
Remember, culture is either created or tolerated. So get intentional and get to it!