How To Create a Company Culture in 10 Steps (Plus Benefits)

Updated February 3, 2023

Company culture refers to the attitudes and behaviors that an organization's employees and management share, and it's often an important factor in the job search process. You can determine a company's culture by evaluating how its employees interact with each other and assessing their decisions. Developing a clearly defined and positive organizational culture can help you attract more qualified candidates, streamline processes, reduce employee turnover and increase productivity.

In this article, we discuss what company culture is, explain how to create a positive company culture and list the benefits of doing so.

What is company culture?

Company culture describes the beliefs and values of an organization and often includes its long-term goals, mission and work environment. It may also include the behavior and personal characteristics of employees. Some employees may prefer to work in an environment that supports teamwork and collaboration, while others might choose an environment with defined regulations and hierarchies. A company's management style often determines these characteristics. Company culture is usually unique to each organization, but several factors can determine the type of workplace culture that exists in an organization, including:

Organizational structure
Dress codes
Onboarding processes
Hiring decisions
Work hours
Location
Communication
Degree of transparency
Management styles
Internal procedures
Customer service
Office traditions
Benefits
Work-life balance

Related: Guide to Company Culture

How to create a company culture

An organization's executives and high-level managers are often responsible for developing its culture, while individual employees are responsible for promoting and maintaining it. Creating a cohesive culture can help improve employee morale and reduce workplace stress. Here are the steps you can take to create a positive company culture:

1. Define the company's purpose and values

Considering the purpose of the company you work for and its values may help you more easily determine your ideal culture. Think about the goals you want to achieve by defining your company culture and how it might contribute to achieving the organizational mission. Start brainstorming what makes the company unique, its internal values, and its short- and long-term vision.

It's also helpful to review potential opportunities for improvement in the current organizational culture. Examine current processes, productivity levels and overall employee satisfaction. Consider areas where the company excels and think about ways you could improve existing processes or policies. For example, you may discover that employees' values don't align with the organization's values and mission, highlighting the need for a more cohesive company culture.

2. Research the competition

If you're unsure of the company's purpose or values and how they might affect company culture, spend some time researching the organization's competitors. Assess the company cultures of similar organizations in your industry or niche to understand better the goals, attitudes and practices that affect them. In addition, review their mission statements, branding and visions to better determine the characteristics or values that might benefit your team most.

3. Ask for employee input

Employees can be integral to establishing a company's culture, as they're often directly affected by it and may be able to provide useful feedback for improving it. By asking for employee feedback, you can demonstrate that you value their opinions. In addition, you can better ensure that the culture you create is one that employees can support.

How your team interacts can function as the standard for the entire organization's operations. For example, if your employees are respectful and support one another in their work, you may be able to develop a more positive company culture. To obtain actionable feedback on how to develop a mutually beneficial work culture, consider creating a survey for employees or meeting with them individually. You could ask what employees like about working at the company, whether they agree with the current organizational goals and what the company could do to improve its culture.

4. Create a vision and mission statement

Clear vision and mission statements can make it easier for employees to determine the organization's long-term goals and work toward achieving them. A mission statement is a concise message that explains the company's purpose and the value it provides its customers. In contrast, a vision statement describes what the company hopes to achieve in the future. Writing these statements may require you to determine the company's core values, which function as its guiding principles.

You can use the mission and vision statements to create the foundation for the company's identity and internal culture. They can also help you create a culture code, which guides how employees can support the organization's values. A culture code also lists its traditions, explains its belief system in greater detail, and might even contain testimonials from current employees. Review these statements and the culture code regularly and update them when necessary.

5. Develop a plan to design a positive company culture

Use your research, goals, mission and vision statements to create a step-by-step plan to implement new processes and goals to improve your company culture. Refer to your mission and vision statements when creating an action plan and use departmental and team goals to determine the specific processes you can implement to support company culture. For example, you might discover that employees desire better communication with their managers, enabling you to create another communication channel for them to interact with their managers directly. Consider team resources, budget restrictions and time frames as you implement new processes.

6. Institute opportunities for employees to improve

Creating new opportunities for employees to improve their skills and progress in their roles may help you enhance the overall company culture. Allow employees from different teams to share their expertise to promote positive interdepartmental relationships. In addition to providing training to employees and creating professional development workshops, consider presenting employees with the opportunity to interact in a less formal setting. For example, you might decide to plan group outings or special events for employees to attend once a month.

Related: What Is Employee Bonding?

7. State your expectations

Ensure that existing employees understand your expectations regarding their performance and how those guidelines relate to the company culture. For example, a company culture that values transparency might require employees to post regular updates to the organization's primary communication channel. Educate new employees on the company's expectations and answer their questions about company policies.

8. Recognize employees for their performance

Reward employees for their individual contributions to engage employees and help create a more positive company culture. Let them know that you appreciate their skill sets and that their work is meaningful to the organization. In addition, demonstrate to them how their roles relate to the organization's mission and vision so they can feel valued. While it's beneficial to congratulate teams for accomplishing longer projects and show your appreciation if they work overtime, it's also important to promote a good work-life balance by encouraging breaks and offering mental health resources.

9. Apply company culture to recruitment

When hiring new employees, assess each candidate carefully to determine their culture fit or the degree to which they can adapt to the company culture. Candidates who are a good culture fit may require less training and easily adapt to the organization's work environment. You can assess a potential employee's culture fit by providing candidates with the opportunity to complete a self-assessment during the recruitment process. You can then compare their preferences and values to the company's to determine how closely they match.

10. Continually promote good company culture

Implementing a new company culture can require time and effort, but continually promoting and reaffirming the company's values and goals may help you do so more effectively. For example, you might help new hires feel welcome by creating a comprehensive and friendly onboarding process. Introducing new employees to the company's mission statement, core values and culture as part of the onboarding process can also help foster good company culture.

You may also follow up with existing employees by periodically encouraging them to provide anonymous feedback on what you could do to better support them in their projects. Continually surveying your employees and customers can help you improve and maintain your company culture. Invest in digital tools and platforms to help employees at all company levels engage with one another more productively.

Benefits of a positive company culture

There are several benefits to creating and maintaining a positive company culture, including:

More engaged employees: A positive company culture lets employees feel more engaged, as it helps to set clear performance goals and define employees' responsibilities, helping them support the organization's mission and vision.
Lower employee turnover rates: Employees who work at companies with a good culture often feel more valued, decreasing the likelihood of them choosing to leave the company to work at another.
Reduced recruitment and retention costs: Company culture helps organizations attract and retain qualified candidates with excellent culture fits more easily, which may result in reduced recruitment and retention costs.
Increased team morale: Employees who work in organizations with a positive company culture often interact with their team members more frequently and are more willing to help them complete tasks, increasing team morale.
Higher productivity and better overall output: A positive company culture helps employees understand their roles more clearly, increasing output and improving productivity levels.
Positive company image: Customers, other companies and qualified candidates often perceive companies with excellent company cultures more positively than organizations without distinctive cultures.