How to Conduct Company Culture Audits

It is often said that “culture eats strategy for breakfast” (Peter Drucker). But understanding what company culture is and how to effectively audit it can be challenging. In this blog, we will explore what company culture is, how to assess it, and the steps to conducting a company culture audit.

What Is Company Culture?

Company culture refers to the collective values, beliefs, and behaviours that shape how employees interact and work together within an organisation. It is the unwritten code of conduct that influences everything from how decisions are made to how employees dress and interact with clients. In simple terms, “the way things are done around here.”

According to the CIPD, “A positive organisational culture allows employees to understand their organisation and feel that their voice matters in driving the business towards a common purpose.” Equally, a negative culture can impact upon customer satisfaction, business performance and employee satisfaction.

Why is Company Culture Important?

A positive company culture isn’t just good for employee satisfaction – it can also have a significant impact on your bottom line. When employees are happy and aligned with your company’s values, they’re more productive, creative, and committed to achieving the company’s goals. This, in turn, can lead to higher customer satisfaction, better employee retention, and ultimately, improved financial performance.

Types of Culture

There are various types of company culture, and all can drive highly successful results as demonstrated by the variety of examples below. Understanding these can help you identify which one best describes your organisation and which one may best meet your goals:

Clan Culture: Emphasises a family-like environment where employees are encouraged to collabourate and support one another. It focuses on employee involvement and shared values, making it an ideal culture for businesses prioritising teamwork and a strong internal community. Well-known examples of this are the John Lewis Partnership, Innocent Drinks and Timpson.

Adhocracy Culture: Values innovation, creativity, and risk-taking. Organisations with this type of culture often encourage employees to think outside the box and challenge the status quo. Well-known examples of this type of culture are Google and Amazon.

Market Culture: Focused on competition and achieving tangible business goals. Companies such as Virgin, Salesforce and Apple prioritise the bottom line with this culture, often emphasising high performance and customer service.

Hierarchy Culture: Organisations such as the military are structured and controlled, with a clear chain of command. This culture values efficiency, stability, and doing things “by the book.”

Why a Company Culture Audit Is Essential

A company culture audit allows you to evaluate your culture, identify strengths, uncover weaknesses, and make informed decisions to enhance the overall workplace. Regularly evaluating culture is important because having shared, clearly defined values will influence the standard of an organisation’s customer service, as well as the satisfaction and retention of its people. Understanding your culture is important because it influences your success by impacting the following key areas:

• Employee Retention: A positive company culture significantly impacts employee retention. When employees feel valued and aligned with the company’s values, they’re more likely to stay long-term.
• Alignment with Business Goals: Your company culture should align with your business goals. An audit ensures that the culture supports the achievement of your mission statement and overall objectives.
• Customer Service Impact: The way your employees interact with customers is often a reflection of your company culture. A culture that emphasises customer service will likely result in higher customer satisfaction.
• Work-Life Balance: An audit can help you assess whether your culture supports a healthy work-life balance, which is crucial for maintaining a motivated and productive workforce.

Steps to Conducting a Company Culture Audit

1. Define Your Company’s Core Values and Mission Statement
   Clearly defined core values and a mission statement are a great place to start. Our expert HR Consultants can facilitate the development of your values, to draw out and document what your company stands for and the behaviours and attitudes you expect from your employees. Once set, these elements will serve as benchmarks during the audit process.
2. Gather Data
   To get an accurate picture of your company culture, you need input from your employees and potentially other stakeholders such as partners and customers. Consider using anonymous surveys, one-on-one interviews, and focus groups to gather this information. The questions should aim to uncover how people perceive the organisation’s culture. MAD-HR can support you with the capture and analysis of this information. It is important that any surveys and interviews cover various departments and hierarchical levels to get a comprehensive view of the entire company culture.
3. Analyse the Data
   Look for patterns and trends in the responses. For instance, if multiple employees mention a lack of communication from leadership, this could indicate a significant issue that needs addressing.
4. Review Company Policies and Procedures
   Your company’s policies and procedures should support the culture you wish to promote at every touchpoint with the organisation. During the audit, review these documents to ensure they align with your desired company culture model. Make necessary adjustments to policies that may be hindering the development of a positive company culture.
5. Benchmark Against Industry Standards
   It’s helpful to compare your company’s culture with industry standards and company culture examples from other organisations. This can provide insights into areas where you may need to improve and can help you stay competitive and aligned with broader industry trends.
6. Implement Changes Based on Audit Findings
   After analysing the data and reviewing your policies, it’s time to implement changes. This step involves creating an action plan that addresses the weaknesses and builds on the strengths identified during the audit.
7. Monitor and Re-Evaluate
   A company culture audit is not a one-time event. It’s essential to regularly monitor your culture and re-evaluate it as your company grows and evolves. Set up regular check-ins, such as annual or bi-annual audits, to ensure that your culture remains aligned with your business goals and continues to support a positive employee experience.

Conducting a company culture audit is an essential step for any organisation that wants to ensure the organisation’s culture aligns with its business goals and promotes a positive employee experience. By understanding what company culture is, defining it within your organisation, and following the steps outlined in this guide, you can create a work environment that not only retains top talent but also drives your company toward success.

Remember, company culture is dynamic, and it’s important to continuously assess and adapt it as your business evolves. By prioritising company culture, you’re investing in the long-term success and sustainability of your organisation.