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5 reasons why it’s important to invest in company culture

The term ‘company culture’ has been gaining more and more popularity in the business community. But what is it exactly and why is it so important, especially for startup founders?

Company culture is a set of shared values, goals, attitudes and norms that characterize a particular organization. It provides guidelines and expectations for your employees and customers and is the most powerful resource to attract, recruit, hire and retain talent to your company.

You must have heard about the company cultures of tech giants like Google and Netflix, which offer free food, yoga classes, flexible schedule, fun activities and other perks to their employees. But, let’s face it: small businesses can’t offer the same fringe benefits. They simply don’t have colossal HR teams, expensive budgets and broad brand recognition like those companies do (yet!) at their disposal. Thus, most small businesses have to be “thriftier” in how they build great company cultures.

The good news is that building a positive culture can be done with any budget, any company size and within any industry. Provided that employers take the time to invest in the happiness and well-being of their employees, a positive culture will grow and thrive.

But first, let’s discover why organizational culture is so essential in the first place. This article looks at five reasons for your startup to start investing time in company culture right now.

  1. It determines your company’s internal and external image

First and foremost, company culture is the key identifier of how your organization operates. In his article, Peter Ashworth explains that organizational culture “defines for you and all others, how your organization does business, how your organization interacts with one another and how the team interacts with the outside world, specifically your customers, employees, partners, suppliers, media and all other stakeholders.”

To paraphrase it, your company culture is visible across all aspects of your business because it represents how you do business. It’s concurrently your identity and your image, which means it determines how your people and customers perceive you.

  1. It helps you recruit the best people

A strong company culture is one of the best ways to attract potential employees according to many HR professionals. It gives an organization a major competitive advantage. People naturally strive to work for companies with a good reputation. A company with a positive culture will attract a certain type of talent – the one willing to make their next workplace a home, rather than just a temporary halt. This particularly happens with new hires who, for the most part, have put some extensive thought into the type of culture they’re entering and whether it aligns with their values and beliefs. Today’s candidates are seeking workplaces where they can intertwine their beliefs with those of the company, and work together on a shared vision of purpose and success.

3. It boosts employee loyalty

Positive culture also helps retain top talent as well as foster employee loyalty. People are much more likely to stay at their current job when they feel treated right and enjoy going to work every day. Satisfying such needs as community belonging and personal growth, you turn your employees into genuinely dedicated and loyal advocates ready go the extra mile for your business because of the pride and respect for the company. With the absence of a strong company culture, many employees struggle to find real value in their work, which might lead to several negative business consequences.

No matter the industry, a company is made up of people, right?

  1. It advances open communication 

Open and transparent communication within the organization is crucial. It helps employees work, collaborate and perform better toward the achievement of company goals and avoid undesired conflicts. It’s highly recommended to introduce an open-door communication policy and to keep your workforce informed about important business-related decisions. The companies which do not do that, usually struggle to achieve high business results and even stay in business.

  1. It positively impacts work performance

Did you know that happy employees mean more productivity? Strong company cultures have been proven to cause higher rates of productivity of your workforce. The reason is that employees tend to be more motivated and dedicated to employers who invest in their well-being and happiness (this is where free yoga classes come from). On top, a company culture that facilitates employee happiness leads to lower turnover and better company performance.


These are just some of the reasons why organizational culture is so essential, but they are a good starting point to make you think about what your organization brings to the table. Keep in mind that putting a focus on culture, you create guiding principles which your employees will live by on a daily basis and in difficult times. You will also base hiring and firing decisions on these principles. They will help get all employees working on the same company mission. To a certain extent, a great company culture is the glue that keeps the company together.

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Daria Kholod
Daria Kholod
Daria is an experienced Communications and Marketing Strategist with an affinity for innovation and entrepreneurship. She is an active member of the Dutch innovation ecosystem. Daria writes articles about European innovation, with a specific interest in fundraising, female entrepreneurship and the Netherlands.

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