John Spence, Contributor

In an era of heightened corporate transparency, greater workforce mobility, and severe skills shortages, culture, engagement, and retention have emerged as top issues for business leaders.

Culture and engagement, in particular, are the most critical issues companies face around the world, with 87% of organizations citing culture and engagement as their top challenges.

There are many factors that affect engagement, but the main factor is at the core of the organization, and it sets the framework for all its strategies, from how it does business to how it treats employees. 

The most important factor in employee engagement is organizational culture. Businesses with strong, positive cultures have highly engaged and loyal employees who deliver excellent work and take superior care of customers. Organizations with a dysfunctional culture drive away employees and customers. 

In this article, I’ll be talking about the link between organizational culture and employee engagement and why culture is the top driver of employee engagement. 

Why Culture Matters

I can say that with great confidence because I have worked with companies worldwide for nearly three decades, and the pattern is clear. 

Organizations that create a culture defined by meaningful work, deep employee engagement, job and organizational fit, and strong leadership perform well. In fact, they outperform their peers and are better at attracting top talent.

Unfortunately, research and my personal experience show that engagement is abysmally low in most companies. According to the Gallup polling firm, only 13% of the global workforce is “highly engaged.” Upwards of half the workforce would not recommend their employer to their peers.

Elements of a Winning Culture

There are many elements that most “experts” feel create the foundation for a winning culture. Here are a few questions you should ask yourself that I think are especially relevant to determine if your culture meets the criteria for high engagement.

Positive Environment

  • Is this organization an enjoyable place to work?
  • Are people having fun?

My test for these two: do people smile just as much when they show up in the morning as when they leave in the afternoon? Yes, they enjoy their holidays and weekends, but engaged employees will also enjoy their work.

Strong Relationships

  • Does the organization feel like a family?
  • Do people genuinely care about each other?
  • Do employees treat each other like friends?

This does not mean that everybody in the organization must be best friends. There are always a few people that nobody gets along with. But overall, engaged employees enjoy their work and the people they work with.

Autonomy

  • Do people have autonomy?
  • Are they given the training, resources, and support to do their job and then left alone to do their best work?
  • Is it a culture of micromanagement or delegation?
  • Are people allowed to make decisions without going to check with their boss?
  • Do leaders trust their teams to make prudent business decisions and deliver excellent work?

Employees are increasingly seeking autonomy in their roles because it is a sign that leaders trust them to do the work with little interference from them. 

Trust

  • Do people work well in teams?
  • Do they help and support each other? 
  • Do they feel comfortable sharing what is on their mind? 
  • Do they treat each other with respect?
  • Do they hold themselves and the other team members accountable for delivering on promises and always doing great work? 

Trust is a prerequisite for autonomy and successful collaborative efforts. Organizational culture should foster trust between co-workers and between workers and leadership. 

Recognition

  • Is it a culture of catching people doing things right?
  • Do you acknowledge the contributions of team members?

If you make a mistake in most businesses, someone will point it out rather quickly. Yet, if you do something good, not earth-shattering, just good, rarely do people say anything. 

A great culture gives lots of genuine, specific praise. Not the generic “You’re doing a great job.” Instead, leaders go out of their way to let people know precisely what they are doing well. 

“I heard you on the phone with that unhappy customer. You handled that situation perfectly. It was amazing how you could de-escalate the situation and come up with a solution that made the customer happy. I’m impressed. Great job.” 

This specific praise lets people know that you were observing them and looking for an opportunity to point out when they do something well.

Purpose

  • Does the organization have a purpose that people are committed to?
  • Do they feel like their work makes a positive difference in the world?
  • Are there personal values strongly aligned with the values and purpose of the organization?

Another driving force of a highly engaged culture is the feeling of doing something important. For many organizations, it is easy to promote a vital purpose. 

Hospitals, schools, organizations that make medical products, charities, and similar organizations have an obvious and compelling purpose. It’s easy for a team member to complete a straight-line connection between their work and how it impacts people’s lives. 

For other organizations, it’s a bit more challenging. For example, I’ve been working with many credit unions. It can be challenging to help someone on the frontline see how their job makes a difference. 

But when they understand that the credit union assists people in buying their first home, buying a car to get to work, putting their kids through college, and saving for their retirement – people at the credit union begin to understand that their job is not cashing checks, it is creating financial peace of mind for their customers.

For some companies, it is tough to connect people to a “noble” purpose. Perhaps what the organization does, or a particular person’s job is not that meaningful. In this case, what does the organization do in the community that aligns with an individual’s purpose? 

Maybe they donate to the local children’s hospital or everybody on the team participates in fundraisers for local charities. Although someone’s job might be menial, the organization’s work in the community can make their work more meaningful.

Inclusion

  • Can people speak the truth without fear of retribution?
  • Is it safe to bring up a problem, challenge an idea, or engage in positive confrontation?
  • Can people be authentic and vulnerable?
  • Can they say that they are confused or don’t know the answer without fear of being teased?
  • Can they bring up even the most challenging topic with confidence that people will assume good intentions and engage in curious, professional, and supportive dialogue?

A culture that values employees will encourage them to bring their authentic selves to work every day and create a work environment that is comfortable and non-judgmental.

Core Values

  • Is the culture based on a set of values that steer the organization? 
  • Are hiring, promotion, and termination decisions based on whether people live the values?
  • Is the leadership team a living example of the values?
  • Do employees’ values align with the values of the organization?
  • Could an outsider quickly identify the values without anyone having to tell them?

Some say that values are “discovered.” I believe that, for the most part, values need to be created. Leaders in the organization should define the core values of the business. Other values might emerge, and the core values might be refined from time to time, but I do not believe you can leave this up to chance. 

It is important to remember that values are not something on the wall—they are something that permeates every part of the organization. 

How to Win at Culture

After 30+ years of research and working in hundreds of different organizational cultures, here is what I believe are the 10 essential elements of a winning culture:

  1. People enjoy the work they do and the people they work with.
  2. People take pride in their work and the company they work for.
  3. There are high levels of engagement, connection, camaraderie, and a community of caring.
  4. There is a culture of fairness, respect, trust, inclusiveness, and teamwork.
  5. The leaders walk the talk, live the values, and communicate a clear vision and strategy for growth.
  6. There is lots of open, honest, robust, and transparent communication across the entire organization.
  7. The company invests back in employees; there is a commitment to learning, coaching, and development.
  8. There is a bias for action; employees have an ownership mentality and always strive to give their personal best.
  9. There is high accountability and a strong focus on delivering the desired results.
  10. There is ample recognition and rewards, and you refuse to tolerate mediocrity.

John Spence is a keynote speaker, consultant, and executive coach, who was named by the American Management Association as one of America’s Top 50 Leaders to Watch along with Sergey Brin and Larry Page of Google and Jeff Bezos of Amazon.  He is the author of the acclaimed book on business excellence, Awesomely Simple.