Why is company culture so important?

Why is company culture so important?

March 21, 2018 by Stella Petrou Concha

Company culture often functions as the soul of an organisation. As such, it provides many critical functions – from giving meaning to employees to communicating to the outside world what the business stands for. That’s why it’s so important that leaders acknowledge the importance of company culture and actively work to cultivate a healthy and supportive working environment.

What is company culture?

Something as intangible as company culture can be hard to define in a way that’s honest. Because of this, adopting a framework on which to measure aspects of your culture is incredibly useful.
One of the most famous models of company culture was outlined by Charles O’Reilly, Jennifer Chatman and David Caldwell in a 1991 paper. They find that it can be understood on eight distinct measures:

  • Innovation and risk-taking
  • Attention to detail
  • Orientation toward outcomes or results
  • Aggressiveness and competitiveness
  • Supportiveness
  • Emphasis on growth and rewards
  • Collaboration and team orientation
  • Decisiveness

Knowing where your company sits on each of these measures allows you to better understand what it is that makes your company special, and the strengths and weaknesses it might have.


Why is company culture so important?

Company culture is the oil in the machine. It’s not the thing that drives the company forward but it is a vital component in allowing it to move in the ways it needs to. Without a positive, supportive and healthy company culture, employees are liable to become dissatisfied with the company. This is bad not only for business reasons, but for the personal wellbeing of your employees. If they constantly feel crushed under the pressure and the unsupportive culture your company cultivates, that stress can bleed very easily into their personal lives.

Company culture can help employees understand what the 

business stands for, and what its values are.

Another reason company culture is important is that it can give employees an understanding of what the business stands for, and what its values are. A company that fosters the right culture can be confident that their employees will need their supervisors less and less to make the right decision in a tricky situation. As Frances Frei and Anne Morriss write in Harvard Business Review, “culture tells us what to do when the CEO isn’t in the room, which is of course most of the time”.


Relaxed people in a meeting
Understanding the different elements of your company culture can help you define it better.

Should I hire for cultural fit?

It’s important to hire for cultural fit, because when you don’t both the efficiency and effectiveness of your business can be compromised. The way that an individual’s preferences align with a company’s on the eight measures is a clear way of knowing whether they are a good or a bad fit. For example, someone who aggressively chases results with a high attention to detail, but who is a poor team member might not fit well into a company that has a collaborative and relaxed company culture.

That said, hiring for cultural fit shouldn’t come at the expense of hiring for the ability to do the job at hand. After all, a business’s purpose for existing is to get results and make profit. There’s no point hiring someone that gets on with everyone at lunchtime but can’t do their job. Cultural fit can, however, be the thing that helps you decide between two outstanding candidates – the one that fits better will probably end up being the one that can do the job better too, for exactly that reason.
Here at Reo Group, we pride ourselves on elevating human potential. We take professionals and help mold them into the best versions of themselves. For more information on how we can do the same for you, get in touch with the team today.

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