“Corporate culture matters. How management chooses to treat its people impacts everything – for better or for worse.” – Simon Sinek

The quote above from the leadership guru Simon Sinek is a testimony to the importance of a company’s culture. Company culture is one of the most important yet most often overlooked part of a company. In order to stay successful and relevant in the long run, company culture plays a major role.

What is company culture?
Company culture, also referred to as organizational culture or workplace culture, can be defined as the set of values, attitudes, and characteristics of an organization. It is reflected in what people value at a company, the way they interact and communicate with each other, and their decisions. Several elements make up and influence a company’s culture. These include company vision and mission, style of leadership, workplace environment, business ethics, values, and company goals as well as expectations.

How Do I Know It’s Time for a Change?
It’s not always easy to recognize when it’s time for organizational culture change. The signs are not always obvious and it’s easy to confuse general company problems with an issue with company culture. Most of the time, a culture shift happens organically but there are times when companies and leaders need to actively drive the culture change. So how will you know it’s time for a culture change?

Here are some sure signs it’s time for a change:

1. Low financial performance
If company profits are plummeting and there’s no clear reason behind it such as changes to the economy or customer base, then it’s likely that your culture needs some change. Studies have shown a link between a company’s culture and its financial performance. The organizational culture research firm Great Place to Work reported in one study that the 13 companies that are consistently on Fortune’s list of Best Companies to Work For also reported increased average annual returns.

2. Employees are reluctant to communicate
Effective and open communication is essential for the health of any organization. With a healthy company culture, employees feel comfortable to communicate up and down the organizational structure. They do not hesitate to give feedback that is important for team leaders and managers. If you feel that employees are not sharing feedback or are hesitant to communicate especially during difficult times, then it could be a sign that its’s time for a shift in company culture.

3. Employees find it hard to reach consensus
Successful organizations recognize the benefits of having a diverse group of employees with different backgrounds. The coming together of diverse ideas and approaches helps teams find innovative and creative solutions. However, if you notice that your team is consistently finding it difficult to reach a consensus, it may indicate an issue with the company culture.

4. Low employee engagement
Employee engagement is a mark of good organizational health. It leads to more productivity and better company performance. Your employees are what keep the company going. If you feel that engagement levels are falling and it’s impacting your business, it’s important to inspect where the company culture is at fault.

5. Resistance to change
Successful companies realize that change is the only constant and are flexible when it comes to embracing new ways of business. Remaining static is a recipe for disaster and yet many companies are resistant to change and this is where their company culture is to blame. A healthy culture is one that sees change in a positive light. If you feel that every time something new or different is introduced in your company it’s met by a strong resistance then you need to drive a culture shift to welcome change and progress.

Company culture may be cultivated through deliberate policies and actions or it may be shaped gradually over time through the collection of company decisions. A strong company culture helps employees understand what is expected of them and so they work in alignment with the culture. A positive culture keeps your employees happy and productive, impacts employee retention and helps you meet company goals.