Signs of a healthy culture

Sourdough culture as a metaphor to needing to look after your culture

Everyone knows that a healthy team culture is good for the organisation. We all want to have a healthy culture. We like to think we are promoting a healthy culture. But how do we know?

It’s not just about team performance

A healthy culture is one where team members collaborate, share knowledge, communicate, and support one another. This environment makes it safe to experiment, promotes productivity, and encourages any failures to come to light. Which makes for happier staff and stronger technology.

According to research by Deloitte, 94% of executives and 88% of employees believe that a business’ success is reliant on a strong corporate culture. The same survey also showed that employees who felt happy and valued at work were those who also felt they were part of a good culture.

So a healthy culture is good for the business. But it is also good for sales and marketing: you feel comfortable and enthusiastic talking about what you do when you are genuinely aligned. It’s good for staff retention (and rehiring is a huge time and opportunity cost) because people who are happy and feel respected by their team and engaged with their work, are more likely to be invested. It’s also great for recruitment: direct referrals are a fast and reliable way to hire. If your staff are feeling good about their job, they are going to reach out to their network when there’s a job opening.

Six elements of a healthy culture

There are many ways to look at the state of your corporate environment. While this topic could (and frequently does!) take up a book, we are going to look at our top six factors:

  1. Psychological safety
  2. Iterative improvement
  3. Communication
  4. Fitting work around life
  5. Shared values
  6. Learning and progression

Let’s break these down and look at why each one is important, what it looks like when they’re going well (or poorly), and some actionable tips to help get it back on track.

1. Psychological safety

Psychological safety is a fundamental factor for a healthy culture, because every other aspect of an organisation’s ability to learn and grow relies on it! It enhances morale, productivity, and team effectiveness. It promotes creativity, resilience, solution-oriented problem solving and even lightheartedness in the workplace, making the workplace a more mental health-friendly place to be.

Psychological safety plays a critical role in how employees’ experiences at work are valued. When team members sense that they are safe to try new things and make mistakes, as well as share ideas freely, they are able to show up as their best selves.

Psychological safety is deeply tied to a feeling of belonging. Instead of pitting people against each other in a competitive environment, where mistakes are pointed out as a way of making others feel better about themselves, psychological safety in the workplace allows people to flourish without fear of retribution for mistakes or setbacks, promoting vulnerability and fellowship among team members.

Signs of a low psychologically safe environment:

  • Junior members don’t contribute in meetings or problem solving.
  • Mistakes or unexpected outcomes result in anxiety or panic.
  • Infrequent or cancelled one-on-ones.

Actions you can take

  • Specifically ask for input from everyone in the team and ensure their voice is heard and given equal weight.
  • Take a look at your company or team values, and work together on establishing a team working contract.
  • Celebrate mistakes: it is the fastest way to learn! Collaborate on figuring out next steps, looking at the improving the future, rather than focusing on actions in the past.

2. Gradual iterative improvement

While it’s obvious that no improvement is an unhealthy behaviour, trying to do large improvements in a single leap exposes an organisation to increased risk as well as negatively impacting the team.

The sweet spot is where we aim for smaller incremental change. This should be of no surprise to anyone who’s familiar with agile development, but the same reasons that incremental development works when building software also apply when improving organisational culture.

Why do iterative improvement within a company? Organisational needs change over time, due to staffing changes, or environmental changes, or (best of all) growth.

Signs your culture has stagnated

  • “This is how we’ve always done it” is often heard.
  • Newer staff members are frustrated about processes and meetings.
  • Allergy to risk, change is slow.

Actions you can take

  • Try little experiments in improvements, so there is low risk and easy to reverse if it does not work out.
  • Create a psychologically safe space to explore how the experiment went, and what the team want to try next.
  • Separate out what people want to change, they’re afraid to change, and why. Start moving the small, easy, desirable things.

3. Good communication

Communication is the air that businesses breathe. Effective communication is when the exchange of information and ideas occurs effectively and productively. And it happens in a way that means the recipient understands you. In a healthy culture, it is the vital to ensuring teams deliver faster and higher quality work.

With good workplace communication, staff feel engaged and enthusiastic. They feel a part of something. They work without needing to be micro-managed, and they come up with ideas and solutions, because they know they will be heard.

Communication is the most important skill a developer can possess. Each improvement in their communication is an improvement to the team and the product. A positive culture facilitates social interactions, teamwork, and open communication.

Signs your team does not communicate well

  • Frequent misunderstandings or mismatched expectations.
  • Assumptions are the cause of friction or errors.
  • Individuals show signs of anxiety, wondering if their performance is adequate, or if there is hidden agendas due to a lack of transparency.

Actions you can take

  • Model the behaviour you want to see in others.
  • Encourage conversations around how people like to communicate around certain topics. Some folks prefer information up front so they have space to digest before being asked to respond. Others prefer to see and respond in the moment, while it is fresh and they can work with the team on the spot. While others want to see the content in a group, and then go away to think and ask further questions at a later date.
  • Foster active listening and curious questions to produce greater collaboration.

4. Fitting work around life

When companies place a high value on wellness and a good work-life balance for their employees, they reap the benefits of reduced workplace stress and lower absenteeism. People want to know that their well-being is valued. The increased rate of employees experiencing burnout have pushed companies to re-consider flexible working conditions for their employees (although in some industries this is starting to rebound).

Many people benefit from flexible schedules. Parents who need to pick up kids from school, people who are more efficient in the afternoons, people with different health needs, carers who look after loved ones, and employees whose commutes take a long time: they all appreciate opportunities to work remotely or vary their schedule. A company that enables a healthy work-life balance is the number one priority for employees when looking for new roles. The 4-day work week has been trialled and adopted by companies around the globe, and has proven to be a success.

Signs your culture may be too restrictive

  • Staff are running out of leave due to circumstances beyond their control or they have a short commitment during business hours. For example, medical appointment, tradesperson visit, or watching their child receiving an award in assembly.
  • Promising new hires turning down the opportunity once they have reviewed your working conditions.
  • Micromanagement behaviours from fear of work not being done: status check meetings, onerous reporting requirements, a focus on individual visibility at the expense of group performance.

Actions you can take

  • The age where we all worked five days in the office is a thing of the past, so how do I make my organisation stand out amid others in the workforce of the future?
  • What does effective communication look like when your team is working flexibly?
  • What is a better way to measure performance than physically observing that work is taking place

5. Shared values

A business, with its capital, market access, scale and capacity for innovation, is capable of having a meaningful impact on societal problems. These may be whole-of-society issues or those more local to a company’s operations and markets. They are usually developed by the organisation's leadership and then adopted by the other members of the organisation. It defines what an organisation is, what an organisation does, and what an organisation aspires to be. This is the DNA of the company's culture. Put simply, a company’s values, and the culture they create, can spell the difference between success and failure.

In a healthy culture, clearly stated goals and values are shared and followed by all members of the organisation when acting on behalf of the organisation. Shared values provide overall guidance for team members to make the correct decision in a given situation. It also provides a kind of ethical compass for organisational action. Values are what makes someone not just work to earn money, or because the technology is interesting, or their team are lovely (any one of which could be diminished or affected at any moment), but because they believe in the mission. They feel good about the work they do.

Most importantly, when customers are happy with a company’s values and its way of dealing with them, they’ll keep coming back.

Signs your values are not clear or are missing

  • Decisions around trade-offs tend to be deferred up the management chain, as staff don’t have a set of values to evaluate the pros and cons against.
  • The team does not know why a project they are working on is the highest priority right now.
  • Staff and customers can’t articulate why your company is different to a competitor’s, beyond price or location. Coles or Woolworths: the difference is negligible to most. But compare an IGA or a local grocer to the supermarket giants and people can easily ascribe value that can explain price or location differences.

Actions you can take

  • Define your values — this is often collaborative and takes time.
  • Normalise talking about values when making decisions, or explaining projects or during retros.
  • Check in with people: do they know what the company values look like for them, in their job?

6. Learning and progression

80% of CEOs now believe the need for new skills to inform and advance their business is an existential threat if unmet. It is difficult to identify a larger reason to build a culture of learning!

Organisations that recognise the importance of continuous learning and progression also understand its impact on its employees and overall business success. Learning and development directly affect talent acquisition and staff retention. (This study shows this can reduce turnover by 53%!). Performance improves because employees are more likely to be productive when they enjoy their workplace, feel valued, and they can achieve more when they increase their skillset. A LinkedIn survey showed that opportunities for development have become the second most important factor in workplace happiness (after the nature of the work itself).

Signs your team’s development is stalling

  • Lack of stretch assignments: responsibilities just beyond someone’s current capabilities.
  • Low or no mentoring taking place.
  • High staff turnover rate.
  • Very few promotions.
  • Low/no knowledge sharing.

Actions you can take

  • Set aside a budget for professional development.
  • Build in expectations of mentoring for senior staff, and provide opportunities for them to do so.
  • Build in a practice of feedback and reflection, and take action on ideas that are surfaced.
  • Review your career growth framework: what challenges get in the way of people progressing?

The costs of an unhealthy organisational culture

It takes work to create and maintain a positive workplace environment. If that work is not done, or if an organisation becomes complacent, the costs can be dramatic.

High employee turnover, poor customer service, decreased productivity which impacts marketing, sales, growth, and customer satisfaction. Increased burnout takes its toll as dedicated individuals try to shoulder the burden while their morale decreases. Lack of trust, communication, respect and incremental improvement results in people (at best) working harder, but not smarter.

Micromanagement, lack of transparency, poor communication, no alignment on values, or an emphasis on individual performance over collaboration and teamwork are like throwing sand into the gears: the engine continues to work for a while but it is high friction and the damage to the parts increases every day. In the worst case scenario, toxic environments are toxic to people’s health.

Build the culture you want

There’s no question: a healthy workplace environment is good for your company. A positive company culture should be a right, not thought of as a privilege. Employees will care for the quality of their work and the company’s goals if they know that they are being supported. Employees are the best asset of every organisation, and putting effort into cultural wellness can encourage future success.

Every organisation has a culture. Sometimes it is intentionally crafted and consciously embedded in the entire company. Usually it just evolves organically as the team grows. Often the culture described in company communications is aspirational and there is a reality gap between it and the actual culture seen in daily life.

It’s worthwhile investing effort into your customs, traditions and processes, because of the impact your culture has. Leaving it to self-evolve can put your entire business at risk.

Your culture is a living thing that evolves and changes in hard to define ways. It requires active attention to planning and a great deal of work and iteration. Having an emotionally intelligent, involved leader is the most important step to creating a great workplace culture.

If you’d like to talk to us about ways you can assess and uplift your culture, we have experience across businesses of all sizes and shapes (and all kinds of cultures!). We’d love to help your business to grow and your staff to perform at their best.

Drop us a line or schedule a call to meet with us online and talk through your challenges and learn how we can work together.

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