Company culture is what makes one organization different from the next. The team's shared values, goals, and expectations contribute to a thriving organizational culture. Leaders who are dedicated to continuous improvement make it the cornerstone of their organization's culture.

What is Company Culture?

Company or organizational culture is the shared set of values, beliefs, and "norms" that create every organization's unique psychological and social environment. It defines how things get done within the company.

Workplace culture is constantly changing. It isn't a set of rules or policies, although it informs them. Instead, culture is a mindset that is always present and guiding everyday decisions and behaviors at work.

Culture in the workplace is not static, and for an organization to stay relevant over the long term, its culture has to evolve and adapt. This is also why it shouldn't be seen as a set of strict rules or forced behaviors but as a mindset that guides everyone's everyday work.

What is a Culture of Continuous Improvement?

In a culture dedicated to constant improvement, one guiding value is that there is always room for improvement and innovation, no matter how good things are today. Therefore, it requires that each employee become an agent for change who is ready and excited about implementing minor improvements regularly.

The improvement mindset focuses on bringing value to customers, enhancing cross-functional collaboration, and achieving operational excellence. Problems are seen as opportunities, and the focus is on systemic improvement rather than blaming individuals.

Why is a Culture of Improvement Essential for Excellence?

The renowned analyst firm McKinsey produces a report called the Organizational Health Index. Their research finds that the highest performing companies have cultures of continuous improvement. In addition, they discovered that cultural health is a predictor of performance and that the healthiest cultures outperformed their peers by nearly two to one.

The key benefits of improvement culture include:

Increased Likelihood of Operational Excellence

Operational excellence occurs when there is tight alignment between the business strategy, corporate culture, empowered employees, and daily improvement. This is not something that happens by accident. It starts with strategy deployment, consistent communication, and daily efforts to move toward the most critical strategic goals. In addition, a culture rooted in improvement contributes to outstanding results, reinforcing the mindset that continuous improvement is essential to success.

Accelerated Innovation

Chances are, the people who operate processes within your organization have brilliant ideas about how to innovate, eliminate waste, and bring more value to customers. But without a culture that supports it and a structure for sharing ideas, employees will likely never speak up.

Toyota is often credited with developing one of the first cultures that truly embraced quality improvement. They did so by demonstrating that employee ideas for improvement weren't just welcome. They were expected. Daily improvement is built into every facet of work at Toyota and their turnaround after the second world war demonstrates the value of this approach.

Improved Employee Retention and Engagement

Every person in your organization brings with them a unique set of skills, experience, and knowledge. The people are the strength of any organization and what makes it stand apart from competitors. But employee disengagement is a significant problem in many organizations. When employees do only what is technically required, organizations don't capitalize on their creativity and background.

Culture has increasingly become a reason why employees join and stay with an organization. Of course, benefits and salary will always be important considerations, but modern workers also insist on meaningful work, opportunities for growth, and values that align with their own.

The Attributes of a Healthy Culture of Continuous Improvement

Engaged Leadership

Leaders who achieve operational excellence understand that culture is not just an HR or PR exercise. As a result, they take an active approach to coaching and role modeling. They also provide the necessary resources and time required for improvement work. What's more, they were willing to distribute power and are excited to consider innovative ideas, whether they come from the board room or the front lines.

Effective Communication

Organizations with thriving cultures of improvement have systems for both structured and ad-hoc communications. Information constantly flows up and down the org chart and across functional boundaries. Transparency builds trust and leads to more intelligent decision-making. In particular, the organization's strategy is constantly present in the discussion so that goal alignment is possible.

A Sense of Ownership

People become more engaged when they are emotionally invested in results. This is achieved by giving employees a sense of ownership of the processes they operate and the outputs they generate. When employees are empowered to make incremental improvements and take calculated risks, they become inspired to participate in innovation. When it is their ideas that are being implemented, they are more likely to ensure outstanding results.

Structured Problem Solving

In an improvement-focused culture, problem-solving is a daily practice. Having a consistent approach to solving problems helps everyone feel on the same page and reduces conflict. Common structured problem-solving tools include A3 reports, The 5 Whys, value stream mapping, and fishbone diagrams.

Thoughtful Hiring Practices

Your organization's culture should create the perfect environment for employees to thrive and develop an expanding set of skills. But not everyone is a good fit for a culture of improvement. That's why it is essential to screen for people with the right attitudes and abilities from the moment of the first interview. Everyone involved in the hiring process should ask whether the candidate is a person who will speak up and share their ideas for improvement. Does this person exhibit a willingness to learn from mistakes and respond positively to feedback? Do they take accountability for their actions and course correct when needed?

Celebration of Success

People take clues from how others are recognized and rewarded for their work. In a culture of improvement, positive change is celebrated far and wide. Acknowledging the efforts of team members is a daily practice. Leaders take care to particularly highlight the types of improvements and innovations that they want to see spread throughout the organization.

Culture is the foundation upon which the strategy can be executed. Building yours around improvement is an ideal approach that will set your team up for operational excellence and long-term success in the marketplace.