What does culture mean within the context of an organization, and why is it so important? Culture is hard to define, which is why many will hold up their hands and simply say that culture amounts to how things are done around here. You can’t necessarily say what it is, but you can feel it, and you know it when you see it. We can, however, be a little more specific than this. Organizational culture grows out of the shared values, beliefs, goals, and practices of a workplace. It shapes how people interact with colleagues and clients, and it determines how work gets done.

According to Dr. Yemisi Bolade-Ogunfodun at Henley Business School, core values are at the heart of culture. Companies often display core values prominently on their websites to send a message to clients, customers, and prospective employees about their organization’s identity. Building a strong culture is not just about shoring up productivity at home by aligning the goals of one’s employees, it’s also about communicating brand identity to the public at large.

The health of a company’s culture indicates the health of the company itself. According to McKinsey, culture correlates with performance, and businesses with strong cultures thrive under change, post higher returns to shareholders, and are able to carve out unique and innovative business models. Forbes says that companies with strong cultures have seen a 4x increase in revenue growth. It’s clear that strong organizational culture is as powerful as it is elusive. It’s not something that you can get overnight. Indeed, most organizations struggle to tie values to individuals’ daily work. Gallup showed that only 23% of U.S. employees strongly agree that they can apply their organization’s values to their work every day. How can we fix this?

Incentive programs are one great way to embed core values in an organization. They help turn values from empty words into something people think and care about on a daily basis. Let’s look at how this is supposed to work.

Incentive programs allow leadership to target behavior for special recognition and praise. They also allow managers to give meaningful positive reinforcement through gifts and formal recognition events. This gets everyone involved in core values. Managers look for behavior that reflects organizational values, and employees look for opportunities to put them into practice. Over time, core values become part of daily life, acting in accordance with them becomes second-nature, and people learn to see them as worth promoting. Repetitive rituals like service awards and recognition ceremonies are powerful tools for creating the kinds of social interactions and emotional ties that help strengthen core values.

References

Dewar, C. and Doucette, R. (2018). ‘Culture: 4 Keys to Why It Matters’, McKinsey & Company. Available at: Culture: 4 keys to why it matters (mckinsey.com).

Fromm, J. (2023). ‘Employee Recognition is Key to Driving Business Growth’, Forbes. Available at: Employee Recognition Is Key To Driving Business Growth (forbes.com).

Gallup (no date). What is Organizational Culture and Why Does it Matter? Available at: What Is Organizational Culture, and Why Does It Matter? – Gallup (Accessed 8/1/2023).

Laker, B. (2021). ‘Culture is a Company’s Single Most Powerful Advantage. Here’s Why’, Forbes. Available at: Culture Is A Company’s Single Most Powerful Advantage. Here’s Why (forbes.com).

Vasundhara, S. (2021). ‘Why Company Culture Matters: Our Favorite Reads’, Harvard Business Review. Available at: Why Company Culture Matters: Our Favorite Reads (hbr.org).