Company culture shapes how employees feel when they show up for work, and it impacts everything from performance to retention to reputation. Company culture can be both implicit and explicit, but it unquestionably lays the groundwork for workplace health.
Defining Company Culture: What It Is and What It Isn’t
Executives often define company culture as a ‘mission statement’ or an overarching tone of ‘what we stand for.’ However, employees will always interpret culture as what is “done” versus what is “said.”
With that, company culture is a broad term that encapsulates many different parts of a workplace. At its core, you can conceptualize the ‘culture’ of your company as the basic blueprint for how decisions are made, feedback is given, and team members communicate with one another.
Norms and expectations: Culture motivates the “rules” within the workplace. Some of these rules are clearly outlined (i.e. “you need to show up at 8:00 am for work each morning). Others are more “felt” (i.e. “you shouldn’t challenge management within a meeting”). Employees internalize various norms over time, even if they don’t entirely recognize how or why they have absorbed them.
Value system: Whether they realize it or not, every company upholds a set of values that reinforce which behaviors are incentivized and which ones may be penalized. For example, some employees may be rewarded for working late and hustling, whereas others may be looked down on for taking vacation or asking for a mental health day.
Emotional tone: This refers to the tone used within various modes of communication, including meetings, emails, and other interactions. Some companies are more formal and professional- others are more casual and friendly.
The Intersection Between Company Culture and Mental Health
The connection between company culture and mental health can’t be overstated. Just as culture shapes individual behavior and societal norms, it also plays a crucial role in the workplace, affecting how employees feel, behave, and perform. A positive company culture cultivates emotional well-being and a sense of belonging. It achieves this by:
Conveying an implicit sense of safety and trust: It’s essential that employees feel comfortable voicing their opinions and needs. They need to be able to seek support without fearing judgment or retaliation. When leadership models transparency and vulnerability, they maintain an environment that prioritizes reciprocal trust. This lays the groundwork for workplace safety at all levels within an organization.
Prioritizing work-life balance: This term is thrown around a lot in corporate speak, and it’s become watered down significantly over the years. When companies respect personal time and employee boundaries, people tend to feel more valued in their roles. They may be more likely to take care of themselves- both at work and at home, and this benefits the company as a whole.
Reinforcing both diversity and inclusivity: All employees need to feel like they are genuinely seen, heard, and cared for. This matters in all industries and within all job titles. Cultures that encourage both diversity and a sense of belonging also promote a sense of safety. Employees are likely to feel connected to the work. They’re also more likely to feel aligned with the company’s overall values.
Engaging in healthy communication: Respectful and honest communication is the heart of a successful company culture. This is bidirectional- employers need to feel comfortable approaching their team with concerns and feedback, and employees need to feel safe enough to ask for what they need or value.
Costs of Negative Company Culture
When the overall vibe of a workplace feels toxic, unclear, or chaotic, it causes a ripple effect that passes through the entire organization. Leadership may present as apathetic or out-of-touch. Employees may feel competitive with one another, distant from the team, resentful about the work, or emotionally checked out. Any of these responses, of course, represent a significant business liability. Here are some of the consequences that could arise:
Higher turnover: Negative work environments are one of the primary factors causing employee termination. If people feel undervalued or emotionally drained, they’re far more likely to explore other opportunities. This employee churn is both expensive and demanding on employers. Research shows the cost of replacing just one employee can range from one-half to two times that employee’s salary.1
Decreased engagement: Toxic work environments can impact employee engagement. This can happen for a few reasons. People don’t like being micromanaged, poor communication can come across as hostile or disingenuous, unclear expectations become stressful, and employees want to feel recognized for their hard work. If these needs aren’t met, the team often becomes less motivated. Burnout becomes more of a problem, regardless of whether people are open about it. And even if they don’t quit outright, employees might start doing the bare minimum to stay “off the radar.”
Reputation and branding concerns: The outside world often becomes aware of company culture through advertising or word-of-mouth. Furthermore, company reviews have become increasingly popular. If your organization receives negative feedback on social media or employer review sites, both employees and customers may take their business elsewhere.
Persistent stagnation or regression: All companies thrive with ongoing innovation. In an ideal setting, team members remain creative, bold, and experiential. But if employees feel nervous about taking risks or their efforts aren’t appropriately recognized, they can quickly become discouraged. Some employees will default to just playing it safe. Others will isolate and simply focus on doing tasks alone because collaboration feels unsafe. In all cases, this can cause your organization to lag behind others.
Compliance or legal issues: In more extreme cases, a negative company culture may be complicit in harmful behavior, including harassment or discrimination. If your leaders engage in or don’t respond to misconduct, you’re at a high risk of lawsuits or other regulatory concerns. Even if a formal complaint doesn’t happen, “silencing the problem” can erode employee trust and perpetuate damaging structural problems that bleed into all parts of work.
Guidelines for Shifting or Rebranding Company Culture
Company culture isn’t a fixed set of values or behaviors. It can always be restructured or shifted. However, rebranding isn’t a passive experience. It requires strategy, communication, and clear intention.
It’s not always clear when or why a company needs to rebrand their culture. However, here are some signs it may be time to reconsider your branding:
- The current messaging or values don’t match the actual company’s product or service
- You have changed your main clientele
- Your sales are declining or stagnating
- You are merging with another business or expanding into a new market
- You are dealing with public backlash or other negative feedback
- You feel like your brand is outdated and doesn’t speak to modern needs
- Your employees perpetually seem unclear about the company’s values or expectations
- You continue noticing reduced motivation or pride among your employees
- There seems to be a company-wide sense of fear or avoidance
- There seems to be a pervasive disconnect between employees and leadership
- You struggle to clearly articulate what your company stands for
If shifting your company culture feels necessary, here are some steps to consider:
Assess why a rebrand may be needed: Branding is critical, and getting it right is more likely to attract you to the right employees and customers.2 However, before making any dramatic changes, spend some time reflecting on what isn’t working with your current culture. Why is it important to make the change now? Remember that you can’t really change what you can’t measure or understand. Auditing the current culture’s strengths and weaknesses is a necessary starting point for drafting out your initial intentions.
Define the intended shifting or branding: Culture shouldn’t feel vague or contradictory. Aim to develop a clear set of core values that are both measurable and actionable. This will set the tone for all parts of the organization, and it starts at the top.
Get all leadership on board: Since culture begins with leadership, it’s important to address and close any gap that may exist between the intended culture and the actual culture. Leadership should be regularly consulting to discuss how they will implement needed changes and model desired behavior. If more training is required, set the parameters for how this will be implemented.
Encourage employees to co-create within the culture: It may be helpful to solicit feedback directly from your employees as you approach a rebrand. Seek out what they like most about working for your company. What keeps them working there? What inspires them? What are their favorite parts about their job? On the flip side, you should also assess their pain points. What’s the most challenging part of their current role? What do they think can be improved? What values do they have that they’d like to see more of within the company?
Continue to monitor cultural shifts: Companies are complex, and any cultural adaptation isn’t a one-time experience. It’s constantly being tested and refined. You need to stay on top of how employees and customers react to these new changes. If things are favorable, pay attention to what’s working and consider doing more of it. If you don’t receive positive feedback, you may need to wait it out longer or consider fine-tuning certain parts. Either way, it’s important to remember that this requires your active participation.
Final Thoughts
Company culture transcends any mission statement or clichéd HR policy. From a holistic framework, it can be perceived as the felt sense of how employees interact and experience work each day. Positive cultures maintain a sense of trust, empowerment, and creativity. Negative ones, on the other hand, can erode morale, performance, and individual well-being.
Regardless of where your organization stands, culture is not a static concept. It is constantly being challenged and reinforced. Intentional leadership and a commitment to your team can also help you evolve certain norms. Remember that investing in your company’s culture is an investment in your company’s ROI- the people who work for you really are the best asset you have.
