It’s natural for businesses to prioritise their near-term bottom line above all else. Driving growth, managing cash flow interruptions, and investing in innovation for the future is expensive. Businesses who don’t control their costs, or misallocate funds, can quickly find themselves in financial difficulties. Cutting costs in the wrong places, however, can have similarly disastrous consequences, especially in the long term.


Investing in the development of a healthy company culture comes with a significant, and often unclear price tag and many businesses choose to simply ignore the issue for that reason. Company culture, though, is an issue that’s far too important to simply ignore. It not only boosts productivity and innovation in a business, making it more competitive, it also helps to prevent potentially dangerous—and expensive—employee behaviour that poor company cultures tend to exacerbate.

What makes a great company culture?

Business leaders often focus on a few specific values to try to define their culture. While that can be helpful in developing a plan to build such a culture, it’s more useful to use a more utilitarian definition when evaluating what a good culture looks like. An ideal company culture is one where everyone cooperates to contribute to the success of the business as a whole. This requires a trust relationship between employees, and between employees and their employer. To promote that trust, businesses need to ensure that employees see and experience the value in it, and don’t succumb to cynicism.

A business with poor company culture, on the other hand, discourages trust by rewarding selfish thinking and taking advantage of trusting employees through lower pay, higher workloads, and bullying. Just as good company cultures promote cooperation, productivity, and communication, poor cultures increase stress and promote attrition.

Culture affects productivity

The productivity of an individual depends on a wide range of factors, not all of which a business has direct control over. A good company culture, however, has the power to boost productivity significantly. This not only makes up for the investment required to actively shape that culture, it also makes businesses far more sustainable and competitive in the long run.

Improved engagement

A business with a strong company culture empowers people to support each other socially. This reduces mental exhaustion, promotes communication, and keeps people engaged at work. Not only does that mean that employees spend more time focused on their work, but also that they’ll be able to work more efficiently with their peers.

Reduced turnover

Retention is an important part of maintaining productivity. When employees leave, the workflow is interrupted while leaders and other employees are forced to make adjustments, delay projects, hire new employees, and find the time and resources to train them. This not only interferes with the productivity of the affected position that was vacated but also those of all of the employees associated with whoever works in that position.

Bad company cultures can disproportionately damage businesses

A well-managed company culture can greatly boost a business’ competitiveness, and play a major role in securing its long term success. In a few important ways, however, building that healthy company culture is also a preventive measure to avoid the potentially ruinous cost of allowing a particularly poor culture to develop.

Disengaged employers create resentful employees

Poor company cultures increase employee turnover, reduce productivity, and depress morale proportionately. They create an environment in which employees are unable to effectively communicate, and feel no loyalty to either coworkers or their employers. Finding that giving an honest effort or doing hard work isn’t appreciated or rewarding, they’ll become disaffected and disengaged. In this kind of environment, employees naturally grow resentful, and may eventually even seek to sabotage their employer or their coworkers.

Rather than simply missing out on the benefits of a healthy company culture, this leaves businesses in a severely weakened state, where business leaders are forced to spend much of their time fighting metaphorical fires in-house, rather than leading a unified and purposeful business. It not only disrupts their operations and reduces their efficiency, but deprives them of the time and resources they need to innovate, and to drive growth.

Building a healthy company culture is not a one-size-fits-all task, and the amount of investment required isn’t always the same. While that makes it difficult to plan for, and to implement, it’s no less vital. The short term costs may vary, but the results are consistent in making businesses more unified, productive, and innovative. By making the time and effort to build a strong culture, business leaders can ensure that they’ll have the reliable, effective business they need to allow them to confidently pursue growth, and to support their innovative efforts to become ever more competitive within their industries.