Organizational culture: Definition, importance, and development

Organizational culture is the foundation of a company’s success, shaping how employees work, collaborate, and grow. It goes beyond shared values or written policies — it’s the collective behaviors, attitudes, and norms that define how people interact and align with a common purpose.

A strong culture fosters collaboration, drives innovation, and builds trust, influencing everything from employee engagement to customer perception. Whether it’s solving challenges, making decisions, or creating meaningful connections, organizational culture is the force that shapes every aspect of a business.

In this blog, we’ll unravel what organizational culture truly means, explore why it’s the backbone of successful businesses, and share actionable ways to nurture it. Whether you’re looking to refine your existing culture or start building one that inspires, this guide will help you shape a workplace where everyone thrives.

What is organizational culture?

Organizational culture is the set of values, beliefs, attitudes, systems, and rules that outline and influence employee behavior within an organization. The culture reflects how employees, customers, vendors, and stakeholders experience the organization and its brand.

Don’t confuse culture with organizational goals or a mission statement, although both can help define it. Culture is created through consistent and authentic behaviors, not press releases or policy documents. You can watch company culture in action when you see how a CEO responds to a crisis, how a team adapts to new customer demands, or how a manager corrects an employee who makes a mistake.

What is the importance of culture to your company?

Company culture defines how employees interact, work, and grow. A positive culture promotes teamwork, boosts morale, and attracts top talent. It creates an environment where employees feel valued and supported, leading to higher engagement and productivity.

Culture shapes the company’s identity, reflecting its values and priorities. Employees align better with the company’s goals when they experience a strong sense of belonging. This alignment fosters loyalty and reduces turnover.

Culture also influences how customers and stakeholders perceive the organization. A healthy workplace culture drives innovation and collaboration, leading to better problem-solving and business outcomes.

Investing in culture strengthens employee relationships, improves retention, and builds a foundation for long-term success. Prioritizing a positive culture creates a ripple effect, benefiting both the workforce and the business.

How do you improve organizational culture?

Improving organizational culture is essential for fostering a positive, productive workplace where employees feel valued and motivated. Here are some key strategies to achieve this:

1. Connect employee work to a purpose: Help employees see how their work contributes to the organization’s mission and vision. When employees understand the impact of their efforts, they are more likely to feel engaged and aligned with the company’s objectives and key results (OKRs). Consider using storytelling or real-world examples to demonstrate this connection.
2. Create positive employee experiences: Focus on crafting moments that matter throughout the employee lifecycle, from onboarding to offboarding. Positive experiences, like a warm onboarding process or celebrations of milestones, contribute to an environment where employees feel supported and appreciated.
3. Be transparent and authentic: Open communication builds trust. Share successes, challenges, and organizational updates openly with employees. Authenticity in leadership fosters a culture where people feel safe to voice opinions and ideas, creating a collaborative and honest workplace.
4. Schedule regular and meaningful 1:1s: One-on-one meetings between managers and employees offer an opportunity to address challenges, provide constructive feedback, and discuss career aspirations. When done regularly, these conversations build stronger relationships and demonstrate that the organization cares about professional growth.
5. Encourage frequent employee recognition: Recognition is a powerful motivator. Celebrate achievements, both big and small, to create a culture of appreciation. Employee recognition platforms make it easy to implement a consistent and engaging recognition program, ensuring employees feel seen and valued for their contributions.

By implementing these strategies, organizations can create a thriving culture where employees are motivated, connected, and inspired to do their best work.

Qualities of a great organizational culture

Every organization’s culture is different, and it’s important to retain what makes your company unique. However, the cultures of high-performing organizations consistently reflect certain qualities that you should seek to cultivate:

1. Aligns with company objectives: This comes when the company’s objectives and its employees’ motivations are all pulling in the same direction. Exceptional organizations work to build continuous alignment to their vision, purpose, and goals.
2. Embraces culture of appreciation: This can take many forms, from a public kudos to a note of thanks, or a promotion. A culture of appreciation is one in which all team members frequently provide recognition and thanks for the contributions of others.
3. Demonstrates a culture of trust: With a culture of trust, team members can express themselves and rely on others to have their back when they try something new.
4. Focuses on performance: Performance is key, as great companies create a culture that means business. In these companies, talented employees motivate each other to excel, and, as shown above, greater profitability and productivity are the results.
5. Enables resiliency: Resilience is a key quality in highly dynamic environments where change is continuous. A resilient culture will teach leaders to watch for and respond to change with ease.
6. Encompasses teamwork: Teamwork encompasses collaboration, communication, and respect between team members. When everyone on the team supports each other, employees will get more done and feel happier while doing it.
7. Leads with integrity and transparency: Like trust, is vital to all teams when they rely on each other to make decisions, interpret results, and form partnerships. Honesty and transparency are critical components of this aspect of culture.
8. Adopts innovation: This leads organizations to get the most out of available technologies, resources, and markets. A culture of innovation means that you apply creative thinking to all aspects of your business, even your own cultural initiatives.
9. Provides a psychologically safe workplace: Psychological safety provides the support employees need to take risks and provides honest feedback. Remember that psychological safety starts at the team level, not the individual level, so managers need to take the lead in creating a safe environment where everyone feels comfortable contributing.

10 steps to building a high-performing organizational culture

Now that you know what a great culture looks like, let’s tackle how to build one in your organization. Creating a great organizational culture requires developing and executing a plan with clear objectives that you can work towards and measure. The 10 steps below should serve as a roadmap for building a culture of continuity that will deliver long-term benefits across your company.

1. Excel in recognition

Recognizing the contributions of all team members has a far-reaching, positive effect on organizational culture. When an organization makes appreciating employees part of its culture, important metrics like employee engagement, retention, and productivity improve.

Making recognition part of your culture means it should be frequent, not something saved for milestones or work anniversaries. Companies who invest in consistent social recognition see a remarkable business impact.

Monetary recognition is valuable as well. Consider a points-based recognition program that will allow employees to easily build up point balances that can be redeemed for a reward that’s meaningful to them.

Last but not least, leadership needs to take center stage in your recognition efforts, as they’re the cultural trendsetters for your entire company. Incorporate a recognition talk track into your leadership training and share top tips with managers on how to recognize others and why it matters.

2. Enable employee voice

Creating a culture that values feedback and encourages employee voice is essential for fostering engagement, motivation, and productivity. Organizations that neglect feedback risk losing revenue and disengaging employees.

Start by collecting feedback using listening tools like pulse surveys and workplace chatbots, which allow employees to share their thoughts in real time. Analyze these insights promptly and take meaningful action while the findings are still relevant. Acting on feedback demonstrates to employees that their opinions matter, strengthening your culture and driving benefits such as increased employee satisfaction, loyalty, and profitability.

Managers play a critical role in fostering this culture. Every interaction with employees should be seen as an opportunity to listen, provide support, and respond to concerns. By acting as trusted coaches, managers can build stronger relationships and ensure employees feel valued and heard. A culture of feedback not only boosts morale but also creates a workplace where everyone thrives.

3. Make your leaders culture advocates

Building a strong workplace culture starts with team leaders and managers. Their actions set the tone for the entire organization, making it crucial that they consistently model the values your culture prioritizes. If leaders fail to embody these values or exhibit behaviors that contradict them, it undermines cultural efforts. Employees notice this disconnect, and it can lead to disillusionment. Worse, team members may emulate negative behaviors, assuming they are acceptable or even rewarded by leadership.

To cultivate the right culture, leaders must make it a priority in every aspect of their work. This means consistently demonstrating the organization’s values, fostering open discussions about culture, and integrating employee feedback into their cultural initiatives. When leaders align their actions with the stated culture and advocate for it authentically, employees are more likely to follow suit. A leadership team that champions culture inspires employees to live those values daily, driving long-term success.

4. Live by your company values

Your company’s values are the foundation of its culture. While crafting a mission statement is a great start, living by company values means weaving them into every aspect of your business. This includes support terms, HR policies, benefits programs, and even out-of-office initiatives like volunteering. Your employees, partners, and customers will recognize and appreciate that your organization puts its values into practice every day. You can also recognize employees for actions that exemplify your values to show that they’re more than just words and incentivize employees to build the value-based culture you want to see.

Your company’s values are the foundation of its culture, shaping how employees work, collaborate, and interact with customers. Crafting a mission statement is just the beginning — living your values means integrating them into every part of your business. This includes aligning support teams, HR policies, benefits programs, and external initiatives like volunteering or community outreach with your values. When employees, partners, and customers see your organization consistently practicing its values, it fosters trust, loyalty, and respect.

To deepen this connection, recognize employees who exemplify your values through their actions. Publicly celebrating these efforts reinforces that your values are more than just words — they’re guiding principles that drive your organization forward. This recognition not only highlights your commitment to your values but also motivates employees to embody them, strengthening a value-based culture. By weaving values into everyday operations, you create a workplace where purpose and practice align seamlessly.

5. Forge connections between team members

Building a workplace culture that can handle adversity requires establishing strong connections between team members, but with increasingly remote and terse communication, creating those bonds can be challenging. Encouraging collaboration and engaging in team building activities — even when working remote — are two effective ways to bring your team together and promote communication.

Shared personal interests between team members can also strengthen bonds, especially among individuals from different generations who might otherwise struggle to relate. By identifying and fostering these commonalities, you create new opportunities for understanding and empathy. These connections improve communication, spark creativity, and help resolve conflicts more effectively.

Look for and encourage shared personal interests between team members as well, especially among those from different generations that might otherwise have a difficult time relating to each other. This can create new pathways for understanding and empathy that are vital to improving communication, creativity, and even conflict resolution.

6. Focus on learning and development

Great workplace cultures are shaped by employees who are continually learning and companies that prioritize staff development. Training initiatives, coaching, and offering new responsibilities are all effective ways to demonstrate that you are invested in your team’s growth. When employees feel supported in their professional development, they are more likely to stay engaged, loyal, and motivated.

A culture of learning also has a significant business impact. It leads to a more skilled and adaptable workforce, which enhances overall performance and innovation. Employees who are encouraged to expand their knowledge and take on new challenges are better equipped to solve problems, drive change, and contribute to the company’s success. A commitment to learning helps attract top talent who value growth opportunities, creating a competitive advantage. By fostering a culture of continuous learning, companies can ensure long-term success while building an engaged and high-performing workforce.

7. Keep culture in mind from day one

When an employee’s perspective doesn’t match your company culture, internal discord is likely to be the result. Organizations should hire for culture and reinforce it during the onboarding process and beyond. Practices and procedures must be taught, and values should be shared.

When hiring, ask questions focused on cultural fit, like what matters to the interviewee and why they’re attracted to working at your company. But these questions shouldn’t be the sole determining factor when evaluating a candidate, as the best organizations keep an open mind to diverse perspectives that can help keep their culture fresh.

You should also prioritize building social relationships during the onboarding process so that employees have the insight necessary to understand your company’s culture and values. These relationships will last throughout the employee’s time at the company, so that cultural values are mutually reinforced on a continuous basis.

8. Personalize the employee experience

As modern consumers, your employees expect personalized experiences, so you need to focus on ways to help each team member identify with your culture. Tools like pulse surveys and employee-journey mapping are great ways to discover what your employees value and what their ideal corporate culture looks like. Take what you learn and tailor your actions to personalize the employee experience for your team. Once you start treating your employees with the same care you treat your customers, a culture that motivates each individual at your organization is sure to follow.

Additionally, incorporating personalized recognition and rewards into your workplace culture reinforces these efforts. Recognizing employees in ways that reflect their individual contributions and preferences fosters a sense of belonging. When employees feel seen and valued for who they are, they are more likely to engage, perform at their best, and contribute to a thriving culture. Personalization strengthens connections and promotes a positive work environment that drives success.

9. Prioritize mental health and well-being

Prioritizing mental health and well-being is essential to building a high-performing organizational culture. When employees feel supported in their mental health, they are more focused, engaged, and productive. A workplace that values well-being helps reduce stress and burnout, leading to higher job satisfaction and lower turnover rates. Employees who feel mentally and emotionally supported are more likely to contribute creatively, collaborate effectively, and take on new challenges, all of which are crucial for driving performance.

Promoting mental health fosters a positive environment where employees feel safe to express themselves and seek help when needed. This openness strengthens trust and communication across teams. By offering resources such as counseling, mental health days, or stress management programs, companies show a genuine commitment to their employees’ overall well-being. A mentally healthy workforce is not only more resilient but also more aligned with the organization’s goals, ultimately contributing to long-term success.

10. Recognize and celebrate diversity

Recognizing and celebrating diversity, equity, inclusion, and belonging (DEIB) is key to building a strong and vibrant organizational culture. By promoting inclusivity and celebrating diverse perspectives, backgrounds, and experiences, companies create an environment where all employees feel valued and respected. When individuals from different cultural, ethnic, and personal backgrounds come together, they bring unique viewpoints that can spark creativity and innovation. This diverse mix helps to challenge conventional thinking and encourage new solutions to problems.

A culture that values diversity also fosters a sense of belonging, where employees are empowered to be their authentic selves without fear of discrimination or exclusion. When employees feel accepted and appreciated for who they are, engagement and loyalty increase. Additionally, companies that embrace diversity tend to make better, more well-rounded decisions by drawing from a wider pool of ideas and experiences. Celebrating diversity ultimately strengthens the organization and leads to improved performance, creativity, and employee satisfaction.

Developing culture made easy

Organizational culture will develop even without your input, but in the absence of that guidance, it may not be healthy or productive. By following the steps in this guide, you can improve communication with employees, start creating a culture of recognition, and ensure that all members of your team put your culture into action. To ensure alignment, keep these three basic techniques in mind when developing your company culture:

1. Communication
2. Recognition
3. Action

Even better, your company can start practicing all three techniques with the Achievers Employee Experience Platform^TM. With Achievers Recognize^TM, your organization can leverage points-based rewards and social recognition to create a fun and easy user experience for employees. With Achievers Listen^TM, employees can give you valuable feedback through check-ins and pulse surveys, so you can see what aspects of your culture are working and what needs tweaking.

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