The HR leader's guide to building company culture

Every NFL coach seems to live by this mantra: “You’re either getting better or you’re getting worse, but you never stay the same.” It might sound like a cliché, but it holds a powerful truth — especially when it comes to building company culture. Culture is always being created. The question is, will you shape it intentionally, or will it evolve by default?

The impact of culture on a company’s success

Happy employees make for more successful companies. It seems like a no-brainer, but can you actually see better financial performance as a result of a good culture?

Turns out you can.

The historic returns for companies on Fortune magazine’s “Best Companies to Work For” list beat market averages by a factor of 3.68, or 1,896 percentage points. This advantage holds even when big tech overperformers are removed from the sample. Simply put, good company culture provides big returns for shareholders. It is, quite literally, an investment.

Culture also plays a huge role in employee retention. In fact, employees who feel a sense of purpose in their role are 2.7x more likely to stay with a company. Pride boosts retention odds by 2.2 and fun by 1.7. Retaining employees means lower hiring costs and your choice of top talent.

While every HR team wants a strong culture, building that culture can be challenging.

How to build your organizational culture

Leading with company values not only helps your team feel like they’re part of a purpose — it’s a smart business strategy as well. Of course, every company exists to make money, but chasing any strategy that brings in cash leaves a company with no focus and little innovation. Core values not only help give employees purpose and pride, they keep your organization focused on a mission that goes beyond cashing checks.

“The best cultures have one thing in common: they have deep trust — in leadership and in one another,” says Sophia O'Rourke, head of people and culture at New Story. “The most effective culture-building strategies are those that zero in on constantly building trust.”

Here’s what building a strong culture looks like, step by step.

Step 1: Define your core values

Often, there’s a story underlying an organization’s culture. A tale from the early days with the founding team, a raison d'être for why the company exists today. Leaning into that story can be a great way to help core values stick. People remember stories, not lessons.

Company values also need to be actionable, or your team is left with vague guidelines on expected behavior.

“Every single person in your organization will have a different understanding of what that value looks like in practice until you clearly define what the core value is (and isn’t) and what  behaviors are expected,” advises O’Rourke. “Start with asking what matters to your organization, what do you need in the next five years to achieve your mission, and who do we need in the next five years to achieve that mission.” 

Step 2: Get employee input and involvement

It’s always hard to get people to buy into something they feel no ownership over or have no hand in creating. If you’ve done a good job in step one, your employees should be able to provide examples of your core values in action.

“Invite team members into the conversation. Start conducting interviews or focus groups where team members can share examples and stories of fellow team members embodying core values,” says O’Rourke. “Pay attention to the different scenarios shared that are relevant in your organization. You can use these examples in the next step.” 

Step 3: Communicate expectations

Once your values have been operationalized, it’s time to communicate these expectations to your team, starting from the top. Document these values and train your managers on what these behaviors look like in practice. Remember, unless they’re observable, your values can be misinterpreted.

“At New Story, we created our own culture code that defines each of our core values, identifies what it looks like in action, and highlights what the core value is and what it isn’t for easy reference,” says O’Rourke. “Every new team member is provided a physical copy of our culture code and has an onboarding session with the Director of People and Culture to discuss the core values in action at a company level and team-member level.”

Step 4: Hire for culture

Hiring for culture can be tricky, but it’s a crucial step. Identifying individuals who will not strengthen your organization’s culture prevents much more serious problems down the road. O’Rourke says this is where knowing the definition of what your core values aren’t comes in handy. Creating a culture scorecard and working backward from there to evaluate potential hires in the interview process can help you implement a system to prevent making decisions based on gut feelings.

Step 5: Foster an environment of trust

Like any strong relationship, trust is paramount to a successful organizational culture. Coach your managers to give themselves feedback in front of their direct reports. This will let employees at all levels know that self-evaluation is encouraged and supported throughout your organization. 

Build feedback sessions into employee-manager one-on-one meetings. Train project managers to utilize post-project surveys. The more your team is self-reflects and supports each other, the more trust you build across your organization.

But don’t let this feedback just float in the ether.

“Acknowledge the feedback and then follow through,” urges O’Rourke. “It’s scary for a team member to put themselves out there only to wonder if they just put their job on the line. Always thank team members for feedback, and provide a next step — whether that’s taking time to reflect on the feedback, taking specific action on the feedback, or deciding not to take action on the feedback.” 

Step 6: Incorporate recognition and incentives

Employee recognition isn’t just a nice-to-have — it’s a strategic tool for reinforcing company values and fostering employee engagement. A culture of appreciation builds morale, increases motivation, and improves retention rates.

Effective recognition programs are specific, timely, and tied to company values. Whether it’s through peer-nominated awards, leadership shoutouts in all-hands meetings, or spot bonuses for outstanding contributions, consistent recognition strengthens a sense of belonging.

Incentives play an important role, but they should go beyond monetary rewards. Offering professional development opportunities, additional PTO, or exclusive leadership coaching sessions can make employees feel valued in ways that align with their career goals.

Employee recognition programs really do drive engagement

Explore the research

Culture's impact on all levels of employees

For a culture to support positive outcomes at a company, it needs to permeate every level of your organization, from the top down. If individual contributors don’t see their managers adhering to stated principles, they’ll be less inclined to buy in themselves.

“If we think of a company’s team and culture as a garden, your leaders are the gardeners,” says O’Rourke. “Like a garden, a company’s culture requires ongoing attention and maintenance to thrive and achieve desired results. Otherwise a once-thriving culture will grow out of control, be overrun by weeds and pests, and likely die.”

If you want to be successful in building a team culture, your leaders need to have their hands in the dirt — pulling weeds, watering seedlings, and pruning dead branches.

Fixing a corporate culture that’s not working

Even the best-laid plans don’t always work out. If organizational culture is starting to falter, it’s best to look back at building trust and understanding where that trust was broken.

Return to your core values, and have your leaders answer the following questions:

• What are our core values and what do the behaviors associated with these values look like?

• What behaviors and attitudes are we seeing today?

• What is the gap between this expectation and reality?

• When did this gap start?

“All answers to these questions are symptoms,” says O’Rourke. “Answers to the question ‘why’ will help unveil the deeper cultural problems, but we won’t get that answer until we start asking team members directly.”

Summary

Building a thriving company culture doesn’t happen overnight — and it isn’t set-it-and-forget-it. It’s an ongoing process of defining values, fostering trust, recognizing employee contributions, and continuously aligning your team around a shared purpose. Companies that prioritize culture not only drive better engagement and retention — they also outperform their competitors in the long run.

“As HR leaders, you have the opportunity to decide what culture looks like,” O’Rourke says. “But the important part is once you define it, you need to communicate it, train on it, and create ways of working that constantly remind people what this looks like in your organization.” 

The best cultures don’t just happen. They’re built.