Company culture is becoming an increasingly popular topic, for startup founders, CEOs, employees, and job seekers alike. The way it develops and evolves can make or break or a business.

What makes up a company’s culture? How does it impact business and brand reputation? This article will be exploring these questions.

What is company culture?

Broadly speaking, “company culture” is a company’s ethos. Career expert Alison Doyle neatly packages the definition, explaining that it is “the personality of a company… company culture includes a variety of elements, including work environment, company mission, values, ethics, expectations, and goals.”

Is your company’s culture on point or missing the mark?

It’s important to also understand what culture is not: Foosball tables, beer kegs, free yoga classes, bring-your-pet-to-work days — you get the idea. There’s a common misconception that these fun perks are what culture is all about, but they don’t affect the main business interactions at a company at all. Perks may display what a company culture looks like, but they do not make up company culture on their own.

Successful startups have founders who knew the not-so-secret secret to a successful culture: it’s the people that make or break it. The founders of Twitter, HubSpot, Moz, and others deliberately shaped their company’s culture based on these two people-oriented factors:

  1. The actions and behaviors of the management (ie. founders, CEOs)
  2. The people selected to make up the team

Underline, highlight, and stick a shiny star next to number one; in the case of establishing company culture, actions speak louder than words, PR claims, and Beer Fridays. Leaders set the example and tone for the rest of the company, and good leaders will hire people that support the culture they want to create.

Here’s some useful advice from Rand Fishkin, the Founder and CEO of Moz: “If you’re trying to figure out what a company’s values really are, look at the decisions management makes when lots of money, risk, or loss of face for executives is at odds with the stated values. Want to know the company’s mission & vision? Look at what they’ve intentionally chosen not to do, even though it could be lucrative.”

The impact of culture

Culture can dictate the level of employee engagement and retention. In the modern workplace, companies need to present a positive and flexible work culture if they want to retain employees. Why? As of 2019, a large chunk of Canada’s workforce consists of millennials, and they are shifting the traditional career mindset.

Instead of prioritizing things like job security, millennials tend to choose jobs that align with their ideals and enable their growth. Most want to work for companies that invest in social responsibility and offer flexible scheduling — not game rooms and free staff lunches. If companies want to attract, engage, and retain workers of this generation, they would not only need to clearly state their mission, values, and goals; they would need to walk the talk, too.

Culture also affects the quality of relationships in the office. Founders and CEOs who firmly establish their mission from the get-go are more likely to onboard people who respect that mission, as well as each other.

However, that’s not to say a good company culture comes from hiring a homogenous staff of people who all think alike; it’s that a good company culture enables everyone to work together from a higher baseline of shared trust, respect, and support even when there are differences. When relationships are strong and people are happy, they work more productively. Brian Chesky, co-founder and CEO of Airbnb, illustrates this in his famous letter/blog post to his staff:

Why is culture so important to a business? Here is a simple way to frame it. The stronger the culture, the less corporate process a company needs. When the culture is strong, you can trust everyone to do the right thing. People can be independent and autonomous. They can be entrepreneurial. And if we have a company that is entrepreneurial in spirit, we will be able to take our next ‘(wo)man on the moon’ leap.”