How to Improve Company Culture: A Step-by-Step Guide
Struggling with high turnover, low morale, or disengaged employees? These are common signs of a poor company culture, which can severely impact your business’s productivity and growth.
A positive company culture isn’t just a luxury—it’s a necessity for retaining talent and driving long-term success. If you’re unsure how to improve your company culture, this guide will provide actionable steps to help you create a more inclusive, engaged, and high-performing workplace.
What is Company Culture?
Company culture is the set of shared values, behaviors, and beliefs that define how people within an organization interact and work together. In other words, culture is the social order of an organization, the ideas, customs, and social behaviors of the office that guide team members on what’s expected and accepted.
It’s also the personality of your company and influences everything from day-to-day operations to how employees feel about their jobs. Company culture encompasses things like leadership style, communication methods, work environment, and the company’s mission and values.
Why is Company Culture Important?
Improving company culture has the obvious benefit of building trust and loyalty amongst your people, but it also directly impacts several talent related KPIs you’ll no doubt be tracking. This includes:
- Employee Retention: A company with a well defined culture, particularly around work-life balance and professional development can significantly improve retention rates.
- Productivity: Employees who are engaged and aligned with the company’s culture are more productive. Around 46% of leaders say that culture impacts productivity.
- Collaboration: Good culture fosters better teamwork and communication across departments.
- Reputation: A healthy workplace culture enhances your company’s brand, attracting top talent and clients alike.
In short, investing in your company's culture creates a happier, more productive workforce. But it’s worth noting that culture shouldn’t be confused with strategy, although the two are closely linked. Strategy is the plan of action for achieving the company’s vision and goals. Culture is what helps shape that strategy and its subsequent execution.
Elements of a Healthy Company Culture
To improve your company culture, you need to understand the key elements of a healthy culture and how each plays a role in shaping the overall employee experience. Even regional differences can impact these elements, as some states exhibit stronger workplace cultures than others. When any of these are overlooked, companies can struggle with engagement, productivity, and retention.
Below, we’ll explore how these elements shape culture, where companies typically fall short, and tips on how to improve them.
Mission, vision and values
Your company’s mission and values are the foundation of your org culture. They define the purpose of the organization and the principles guiding its decisions. A strong mission statement aligns the work of employees with broader goals, and creates a sense of belonging.
But many companies fail to communicate their mission and values clearly or don’t live by them consistently. As a result, employees often feel disconnected from the company’s purpose or see a mismatch between stated values and everyday actions.
How to Improve: Too often, companies confuse mission and vision. Get clear on these two from the start.
A mission statement tells staff and stakeholders what your business does, why it exists, and what it works to achieve.
A vision statement tells everyone where your company is going in the future. It’s important that all team members are included in the discussion outlining what the vision statement should be. They need to have buy-in and believe in the cause and possibilities of what the team can achieve. Staff participation increases employee engagement and helps your team feel a part of something bigger than themselves. (You can learn how to write a vision statement here.)
Regularly revisit and reinforce these things through internal communications, team meetings, and performance evaluations. Employees should understand not only what the mission, vision and values are, but how they can contribute to them.
Leadership style
Leadership style profoundly impacts company culture. Leaders set the tone for behavior, work ethic, and communication within an organization. Supportive, transparent leadership fosters trust, collaboration, and innovation, while micromanagement or distant leadership can stifle employee morale.
The problem for many companies is that leadership often struggles with striking the right balance between providing guidance and granting autonomy. Some leaders focus too much on control, limiting employees’ sense of ownership, while others are too hands-off, leaving teams without adequate support or direction.
How to Improve: Regular check-ins, offering feedback, and creating opportunities for employees to grow professionally are essential. Leaders should also model the behaviors and values they want to see in their teams.
Communication
The quality of communication within an organization is one of the main drivers of culture. Transparent and open communication builds trust, fosters collaboration, and ensures that everyone is aligned with the company’s goals.
Poor communication, however, is a common issue, with many companies relying on unclear, inconsistent, or top-down approaches. This can lead to misunderstandings, disengagement, and a lack of trust in leadership.
How to Improve: Implement open-door policies and foster a two-way dialogue between employees and leadership. Regularly share updates, goals, and performance data to keep everyone informed, and tap into employee feedback platforms to help feedback flow both ways. Employees should feel safe expressing their ideas and concerns.
Work environment
The physical and emotional atmosphere of your workplace significantly impacts company culture. A positive, supportive environment promotes productivity, collaboration, and well-being, while a toxic or uncomfortable workplace can lead to high turnover and burnout.
A Society of Human Resource Management (SHRM) survey released earlier this year revealed that 57% of workers say that work-related stress associated with burnout, emotional exhaustion, anger and irritability had negatively impacted them.
Many companies overlook the emotional aspects of the work environment, focusing only on physical spaces like offices or desks. Stressful, overly competitive environments can lead to employee dissatisfaction and disengagement.
How to Improve: Focus on creating a workspace that supports both productivity and well-being. This includes providing comfortable, ergonomic workstations, promoting work-life balance, and cultivating a supportive, inclusive atmosphere. Consider employees' emotional needs by offering wellness programs, mental health support, and flexible work options.
Employee engagement
Employee engagement refers to how committed employees are to the company’s goals and how motivated they feel to contribute to its success.
All too often, companies mistakenly believe that engagement can be addressed with one-time initiatives, like annual surveys or occasional perks. In reality, engagement requires continuous attention and effort. If employees don’t feel heard or supported in their roles, engagement will suffer.
How to Improve: Regularly solicit employee feedback and act on it. The latter part there is the key as simply asking isn’t enough. Show employees how their work aligns with the company's goals, and provide opportunities for professional development and advancement. Make engagement an ongoing effort by integrating it into performance reviews and team discussions.
Recognition and rewards
Recognition and rewards are key to reinforcing positive behaviors and motivating employees. A culture where employees feel appreciated and recognized for their contributions leads to higher morale and loyalty.
For a long time, recognition wasn’t a big priority for many orgs. Still today, there are a lot of companies that don't do it well, or they only recognize a small percentage of employees (e.g., through annual awards or promotions). This leaves the majority of employees feeling undervalued, leading to disengagement.
Employee recognition doesn’t have to take a lot of time, and it doesn’t have to cost money. A face-to-face “thank you,” or even an email or a text, will let your team member know you see their good work and appreciate it. With that said, an employee recognition platform can help you enhance these efforts even further.
How to Improve: Create a culture of regular, meaningful recognition. This can include public acknowledgment during meetings, personalized thank-you notes, or peer-to-peer recognition programs. Ensure that recognition is tied to specific accomplishments or behaviors that align with the company’s values. Reward employees in ways that are meaningful to them, whether through bonuses, time off, or professional development opportunities.
Diversity and inclusion
Diversity and inclusion (D&I) refers to the extent to which your company values, supports, and promotes a diverse workforce and inclusive culture. An inclusive culture fosters innovation, collaboration, and a sense of belonging for all employees.
Diversity initiatives are under scrutiny from seemingly everywhere. That’s because they’ve often failed to serve the groups they’re intended to help, lack accountability and aren’t tied closely enough to business outcomes. This can lead to tokenism, where diversity is celebrated superficially but not integrated into the company’s core practices.
How to Improve: Go beyond surface-level diversity efforts by tracking data around diversity goals, tying it to business activities and measuring specific KPIs that impact culture. The People Managing People podcast recently spoke with Dr. Vijay Pendhakur about this very issue and it’s worth the listen.
Company culture can also be improved by using a pay equity system to promote fairness, enhance transparency, and reinforce a commitment to equitable practices.
Types of Company Culture
There are generally four main types of company culture, each with its unique characteristics:
- Clan Culture: A family-like, collaborative culture focused on employee development and teamwork.
- Adhocracy Culture: A dynamic, entrepreneurial environment that encourages innovation and risk-taking.
- Market Culture: A results-driven culture focused on competition, goals, and measurable success.
- Hierarchy Culture: A structured and formalized culture with clear procedures, authority, and control.
To assess which type of company culture you have, you can use the Organizational Culture Assessment Instrument (OCAI) as a guide.
11 Tips to Improve Company Culture
At this point, you’re probably wondering what you can do now to move the needle on company culture. Here are some tips that you can start to apply immediately.
1. Define and communicate core values
You can’t expect your people to understand your values if you don’t have them clearly defined, and engrained in your onboarding and performance management practices. Your values should communicate what’s expected and give clear guidelines of the behaviors and attitudes you’re looking for.
But, healthy company culture goes a step beyond creating clear expectations — a healthy culture depends on everyone being held accountable and having regular conversations about values in the office.
“Culture has to be repeated and repeated and repeated and built over time,” says Carter. “There’s always a portion of the communication in either a town hall format or an email that talks about how this action reinforces the culture and the vision for the company.”
You might even go a step further and provide company culture training to help people learn about core values more deeply.
2. Lead by example
Leadership sets the tone for company culture. Company culture is visual—and management is responsible for leading the way. Whatever your company’s values, team members need to be able to see that they’re important to you.
This is part of transformational leadership and a key part of motivating and influencing people.
3. Empower employees with autonomy
Giving employees more control over how they manage their work can lead to greater job satisfaction and a sense of ownership and investment that supports a strong culture..
Delegate decision-making authority where possible and encourage employees to take initiative in their roles. Essentially, your goal is to provide guidance, but avoid micromanagement.
4. Commit to accountability
Accountability is the cornerstone of a healthy workplace culture, and everyone plays a part. Ask yourself:
- Does management set clear expectations of job roles?
- Does leadership address issues when expectations are not being met?
- Do staff expect to engage in honest discussion when their work needs improvement?
Trust me, people want to have a clear picture of how they’re performing at work, and they want to be held accountable. If you shy away from the day-to-day accountability conversations, others will see it and the workplace will suffer.
5. Create a culture of transparency
Of course, there will be times you can’t be transparent as a leader, like when you’re addressing confidential personnel matters. But there are lots of other opportunities to be transparent, and you should be as often as you can.
An easy way to be transparent is to show your vulnerability—talk about what’s important to you in the workplace and ways you’ve had to adjust and improve yourself. Be willing to ask questions and hear the answers.
No, you can’t always make the changes they request, but you can listen and learn from them, gauge employees’ moods and mindsets and open meaningful conversations.
6. Offer opportunities for growth
From the time a new hire goes through onboarding right through to their annual performance reviews, it’s important that managers and people leaders they work with directly have an idea of how they envision their future with the organization and what their long term goals are.
Create pathways for professional development by offering a variety of training, workshops, and mentoring programs. Make those relevant to the employee’s goals and tie it to how you envision them contributing to broader business goals.
7. Promote wellness and balance
Encourage employees to maintain a healthy balance between work and personal life by offering flexible working hours, remote work options, or generous leave policies. Overworked employees are less productive and more likely to burn out.
Your employee wellness program should focus on both mental and physical health. Provide access to fitness classes, counseling, or mindfulness workshops to show that you care about your employees’ well-being beyond the workplace.
8. Encourage team building
Foster relationships between employees through team-building activities. Whether virtual or in-person, these activities strengthen bonds, promote collaboration, and create a sense of belonging within the team.
9. Enhance the physical workspace
Improve your office environment by making it more comfortable and inspiring. Add ergonomic furniture, natural lighting, and areas for employees to relax or collaborate. A well-designed workspace can boost employee satisfaction and productivity.
For remote employees, offer a home office stipend or opportunities to visit co-working spaces where they can connect with other remote workers and gain insight that can span industries and org levels.
10. Encourage risk-taking and innovation
A culture that encourages risk-taking and experimentation leads to innovation and growth. Employees should feel safe to share new ideas without fear of failure or negative repercussions.
Recognize and reward creative solutions and innovative thinking, even if not all ideas succeed. Promote a "fail fast, learn faster" mindset to keep innovation alive.
In another episode of the PMP podcast, John Carter, the inventor of Bose’s noise-canceling headphones, discussed the culture of innovation that allowed him and his team to develop and market the headphones:
“Innovation can occur anywhere. It’s okay to fail because if you’re innovating, you’re going to fail. And if you don’t fail, you’re not innovating enough,” Clark said.
11. Give It Time
This isn’t what you want to hear if you’re suffering in a negative work environment, but team culture shifts take time. Change is found in day-to-day communications and opportunities to increase trust.
I’ve been in tough situations related to workplace culture, and at the time it felt like things would never get better—I couldn’t see how they would. But over time things did improve, and looking back I know it’s because we forged ahead, one day at a time.
Management rescued the situation by coming into work each morning with a positive attitude, had difficult conversations to hold staff accountable, and modeled the behavior we expected to see—and others followed.
Be patient - workplace culture can improve.
“Culture is built over time, much like dust accumulates on a shelf. It just accumulates very, very slowly,” said Carter.
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