Cultivating Success

The Importance of Workplace Culture

While financial success is vital to the survival of any business, it is the culture of a company that makes survival and longevity viable.

Historically, companies that adapt a positive workplace culture throughout the organization are more financially successful than their peers, enjoy lower employee turnover, have the ability to recruit outstanding employees, provide superior customer service, and foster a spirit of innovation and creativity.

According to Human Resources Consulting firm, Great Place to Work Institute (, businesses that focus on a positive workplace culture benefit from these advantages and see the results in their financial bottom lines, as well as their social ones.

A 2012 report from Deloitte, “Culture in the Workplace” ( revealed that 94 percent of executives and 88 percent of employees believed a distinct workplace culture is important to business success. In addition, 83 percent of executives and 84 percent of employees believed having engaged and motivated employees as a top factor contribute to the success of an organization. The report also showed a correlation between employees who say their organization has a clear and articulate workplace culture and those who say they are “happy at work” and “feel valued by their company.”

Surprisingly, the study also revealed disengagement between how executives and employees view the way their companies embrace a workplace culture. Only 19 percent of executives and 15 percent of employees believe strongly that their culture is widely upheld within their own organizations.

Seattle-based global asset manager Russell Investment Group compiles an analysis documenting the long-term financial performance of companies that appear in the “100 Best Companies to Work For” list featured in Fortune Magazine and compares it to other companies listed in the S&P 500 and the Russell 3000. The analysis reports that since 1998, the publicly-traded 100 Best Companies, as a group and over time, have outperformed the market significantly. From 1998-2011 the 100 Best have provided a 295.47 percent cumulative return compared with 73.72 percent for the Russell 3000 and 66.49 percent for the S&P 500. This return on investment is proof that having a strong workplace culture yields distinct benefits for a company.

What defines a positive workplace culture is determined by a number of factors. An environment of trust and respect between the employee and employer can influence the overall morale of employees in the workplace and in turn, can affect the pride and sense of agency of employees working for an organization. A workplace culture that cultivates a sense of trust and camaraderie will be much more successful than a company where mistrust, undermining, and discord can ultimately affect the bottom line.

In addition, each staff member has a role to play in influencing workplace culture; executives must determine if a potential employee will be a good fit for the company and its culture and if their passion for their profession is in line with the culture of the organization. An employee with a vision or passion that is different from the overall culture of the company may not be as successful as someone who has a desire to thrive within the organization.

Being able to adapt to the changing needs of the marketplace and still adhere to the overall workplace culture is a challenging line to straddle, and one which many companies have to walk in order to be successful in a competitive environment. Successful companies and organizations define themselves by a certain culture, yet can still adjust to the times and remain relevant. Apple Computer’s culture of innovation has helped the company evolve from one strictly focusing on software and personal computers to a multifaceted corporation focusing on consumer electronic products such as the iPhone, iPod, and the iPad in addition to its hardware and operating systems. Fortune named Apple the most admired company in the world from 2008 to 2012, and the company has revenues of $156 Billion as of this year.

A workplace culture that embraces transparent communication can go a long way toward building trust between the employees and the executives of an organization. A continuous dialogue of what is going well for a company and what is not working can create a fertile culture that is able to adjust when a strategy is not working as planned. Creating an environment where employees can contribute and speak out without fears of repercussion can give executives perspective on what keeps an organization relevant and profitable.

Indeed, effective workplace communication is an essential part of Canadian workplace culture and many companies benefit from this. For example, Skanska, a multinational building and construction company has made an effort to become a company that is communicative about accident prevention. Hendrik van Brenk, chief environmental health and safety officer for the American offices of Skanska has been adamant about communicating issues regarding accidents as well as new safety issues with employees and subcontractors that work with the company worldwide. According to an article van Brenk wrote, “The more insight we share with employees and contractors about what we should be doing in terms of scaffolding, tools or work equipment, and the more we inspire each worker to comply with the rules and regulations because they recognize the reasons behind them, the more likely we are to achieve our goal of zero accidents.” Van Brenk further explains that having an environment in which peer intervention and onsite discussions with each worker can help contribute to safety on a construction site and prevent as many accidents as possible.

The airline industry is another example of how workplace culture can impact a company. Dallas-based Southwest Airlines started in 1971 as an intrastate carrier in the state of Texas and has grown to become the fourth-largest airline in the United States, carrying more domestic passengers than any other airline in the country and employing 46,000 people. In addition to its reputation as a low-fare airline, its workplace culture is well-known and held in high regard. In the 1980’s, the airline adopted a mission of “…dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit.” Furthermore, the mission for Southwest Airlines employees and executives was a commitment to providing opportunities for learning and personal growth, and encouraging an environment of creativity and innovation to improve the airline. This philosophy of inclusiveness has been successful – Southwest has one of the lowest employee turnover rates in the airline industry. The airline’s reputation for fun-loving employees and management, singing flight attendants, humorous advertising, and a free-wheeling environment in comparison to its rivals has had its share of critics and detractors, but the airline has been successful and profitable for most of its years in operation.

As more and more baby boomers are projected to retire over the coming decades, the importance of retaining employees in an increasingly shrinking workforce will be important, and organizations with positive workplace cultures will be the ones to survive.

Creating an environment of transparent communication, engaging employees, constantly staying innovative while adhering to the mission of the organization, and creating an environment of trust are just some of the ways executives can develop an atmosphere that fosters a strong and positive workplace culture. Successful organizations that adapt a positive workplace culture can be ensured that this facet of their business will help them attain high-quality human capital, provide good customer service, build a positive reputation, and above all, enjoy profitability and financial success.