Toolkit: Building a Strong Organizational Culture
This toolkit provides a practical road map for HR professionals and leaders to develop and sustain a thriving organizational culture. You will find actionable strategies to assess your current environment, align it with your business objectives, and foster an atmosphere where every employee can excel.
An organization's culture is the invisible force that drives its success. It is the collection of shared values, beliefs, and behaviors that shape how employees interact with each other and approach their work. When an organization has a strong culture, three things happen: Employees know how top management wants them to respond to any situation, employees believe that the expected response is the proper one, and employees know that they will be rewarded for demonstrating the organization's values.
A strong, positive culture can boost employee engagement, improve performance, and create a significant competitive advantage. Conversely, a toxic or misaligned culture can lead to high turnover, low morale, and stalled growth. More than half of employees who rate their organizational culture poorly say they are actively or soon will be looking for another job, according to SHRM's State of the Workplace research.
Spotting the Signs of a Toxic Workplace
In this episode of SHRM’s All Things Work podcast, Amira Barger, executive vice president of health communications at Edelman, discusses the effects of toxic workplace cultures, explores the red flags organizations should look out for, and highlights the importance of empathetic leadership.
Defining Organizational Culture
Organizational culture can be described as the personality of a company. It encompasses the underlying assumptions, values, and ways of interacting that make up the unique social and psychological environment of a business. It is often unwritten, yet it dictates everything from how decisions are made to how people dress for work.
Culture is expressed through several visible and invisible layers. The most visible aspects include a company’s mission statement, stated values, and physical workspace. Deeper, less visible layers include unspoken rules, shared stories, and the collective mindset of the workforce.
Create space for shared stories by framing messages around employees’ experiences and needs. Help employees visualize the benefits of new policies or changes. By painting a clear picture of the current state, the desired future, and the steps to get there, you reduce resistance and foster buy-in.
For example, a company might state that it values collaboration, but if employees are consistently rewarded only for individual achievements, the true culture is one of competition. Understanding these different layers is the first step toward intentionally shaping your workplace environment. A well-defined culture provides a framework that guides employee behavior and helps attract and retain talent that fits your organization’s core principles.
Factors that influence culture include:
- Values: At the heart of organizations' cultures are commonly shared values. None is right or wrong, but organizations need to decide which values they will emphasize.
- Hierarchy: How highly does the organization value traditional channels of authority? An organization with a high level of hierarchy tends to be more formal and moves more slowly than an organization with a low level of hierarchy.
- Urgency: The degree of urgency defines how quickly the organization wants or needs to drive decision-making and innovation. Some organizations choose their degree of urgency, but others have it thrust on them by the marketplace.
- People orientation vs. Task orientation: Some organizations may get to choose their people and task orientations. But others may have to fit their orientation to the nature of their industry, historical issues, or operational processes.
- Functional orientation: Every organization puts an emphasis on certain functional areas. Examples of functional orientations may include marketing, operations, research and development, engineering, or service.
Pro Tip
Go beyond a simple mission statement. Use stories, examples, and clear behavioral expectations to illustrate what your culture looks like in action. Share it with new hires during onboarding and make it accessible to all employees.
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The Role of Leadership in Shaping Culture
Leaders are the primary architects and guardians of organizational culture. Their actions, decisions, and communication style set the tone for the entire company. Employees look to leadership for cues on what is important, what is acceptable, and what is rewarded. If leaders say they value transparency but hoard information, the culture will reflect that contradiction.
Effective leaders shape organizational culture in many ways, including by:
- Aligning desired values with hiring, performance management, promotions, and rewards.
- Modeling key behaviors such as open communication, calculated risk-taking, and collaboration.
- Acting as storytellers and celebrating wins that reflect company values.
- Framing failures as learning opportunities to reinforce a growth mindset.
- Maintaining consistent influence, which makes their commitment vital to culture-building.
Aligning Culture Work to Your Strategic Business Plan
What happens when strategic goals, leadership, and workplace culture align? Organizations thrive. In this episode of SHRM’s All Things Work podcast , Heather Haas, CEO of business management consulting firm Advisa, shares proven solutions to reconnect your team’s goals with your organization’s purpose.
Pro Tip
Implement culture-based interview questions, but don’t overemphasize culture fit to the point where you could unintentionally stifle innovation and fresh perspectives within a team.
Assessing Your Current Culture
To build the culture you desire, you first need to understand the one you have. Conducting a thorough culture audit will help you identify the gap between your intended values and the reality experienced by employees. Here’s how to approach it:
- Anonymous employee surveys: Use tools to measure engagement, satisfaction, and perceptions of the work environment. For example, include multiple-choice questions about job satisfaction and open-ended prompts for specific feedback.
- Focus groups: Facilitate small group discussions to explore cultural themes in a conversational setting. For instance, ask employees to share their thoughts on collaboration within teams.
- One-on-one interviews: Speak with a cross-section of staff, from new hires to senior leaders, to gain deeper insights. It could be instructive, ror example, to ask both a senior leader and a specialist about their perspective on decision-making processes.
- Inclusive practices: Actively seek and integrate diverse perspectives to foster belonging. You might want to create a diverse “culture committee” to discuss employees' varied perspectives.
- Workplace observations: Watch how employees interact in meetings or resolve conflicts. For instance, note whether team members collaborate effectively or if certain voices dominate discussions.
Stress and burnout levels have a significant impact on culture. They are also among the most pressing needs that workers, HR professionals, and HR executives agree organizations must address, according to SHRM research. Employees who rate their organization as effective or very effective at addressing workplace needs are more than twice as likely to report job satisfaction, with 91% expressing satisfaction compared to just 44% of those who rate their organization as not effective or only slightly effective, SHRM found in its 2026 State of the Workplace report.
Pro Tip
Ask each team what the organization should start doing, stop doing, and continue doing to improve the culture. This simple framework generates concrete, actionable ideas directly from employees.
Aligning Culture with Organizational Goals
A powerful culture is a strategic asset that should be directly aligned with your organization's mission and business goals. A culture that works for a fast-moving tech startup will look very different from one that supports a heavily regulated financial institution. The key is to connect your cultural attributes to your strategic priorities.
Use your organization’s unique culture type as a competitive advantage. SHRM’s 2026 Global Workplace Culture Report shows this with several examples. For instance, Growth Collaborator cultures can differentiate through innovation and collaboration, while Strategic Architect cultures can leverage disciplined, structured decision-making to outperform competitors in complex markets. Treat culture as a market-facing asset, not just an internal one.
Pro Tip
Link cultural contributions to your performance management system. This reinforces the message that upholding the company’s values is just as important as hitting targets.
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Sustaining and Evolving Culture Over Time
Creating a great culture is not a one-time project; it is an ongoing commitment. The work is never truly done, as culture must be continuously nurtured and allowed to evolve with the organization. Sustaining a positive culture requires policies, programs, and strategies reinforced by leaders at all levels.
Tools to Maintain Culture
- Recruitment: Ask questions that elicit comments about organizational values such as honesty or integrity.
- Onboarding: The best employee onboarding process teaches newcomers the employer’s value system, norms and desired organizational behaviors.
- Reward and recognition: For example, if teamwork is a core value, bonuses should value teamwork and not be based on individual performance.
- Performance management: Clearly outline what is expected and provide a feedback tool that informs employees about proper behavior.
- Communications: Consistently communicate your culture to all employees. Avoid conflicting messages, which typically create distrust and cynicism.
Metrics to Monitor Culture
Regularly revisit your culture assessment tools to monitor the health of your workplace environment. Use pulse surveys to track trends and identify emerging issues before they become major problems. Continue to share stories and celebrate examples of your culture in action to keep your values top-of-mind.
As your company grows, enters new markets, or shifts its strategic priorities, your culture may need to adapt. This evolution should be as intentional as its initial creation. Involve employees in conversations about what needs to change and what core elements should remain.
Begin by gathering concrete data to create a baseline. This should include employee engagement survey results, turnover rates, and absenteeism figures. Analyze trends across departments, managers, or roles, and leverage HR information software to monitor and visualize these insights.
Pro Tip
The frame of mind you keep is especially important for success. Operate with a mentality of humility and continuous learning.
Fostering Innovation Through Culture
The ability to innovate is essential for survival and growth. A culture of innovation is one that encourages curiosity, creativity, and a forward-thinking mindset. It is an environment where employees are not afraid to challenge the status quo, propose new ideas, and experiment with different approaches. This requires a high degree of psychological safety, where team members feel safe to take risks without fear of blame or punishment for failures.
SHRM research shows that even as the adoption of technology is accelerating, the true engine of organizational resilience remains human leadership and culture. Give employees the autonomy to explore new solutions and provide them with the resources they need to test their ideas. When employees are curious, they listen closely and pay attention, so they’re more likely to develop products that better meet customers’ needs.
SHRM’s 2026 Global Workplace Culture Report reveals that a strong, well-defined culture can be a catalyst for driving innovation. Cultures with long-term growth orientation are most likely to report their organizations met their financial objectives in the past year.
Here are five global drivers of a positive workplace culture:
- Honest and unbiased management
- Civil behavior
- Meaningful work and opportunities
- Open communication
- Empathy
Celebrate both successes and “intelligent failures” — those well-intentioned experiments that provide valuable lessons, even if they do not succeed. Create formal and informal channels for idea-sharing, such as innovation challenges, hackathons, or dedicated brainstorming sessions. By rewarding curiosity and treating setbacks as learning opportunities, you can build a resilient organization that continuously adapts and improves.
Pro Tip
Recognize and reward individuals who raise uncomfortable issues or different approaches to a problem. When employees feel safe to voice unconventional ideas, innovation flourishes.
Global Issues
Organizational leaders should understand the national cultural values in the countries in which the organization operates. National cultural differences should be considered when implementing organizational culture management initiatives in global businesses. Understanding communication styles across generations is also an important facet of workplace culture.
Managers must be able to respond to nuances in communication styles, as well as deal with differing expectations that employees have of their leaders across national cultures. Not meeting those expectations may doom the global organization's chance for success in particular countries.
These issues become even more complex in global business mergers. Success in international mergers depends on the merged organization's willingness to enable people with different cultural perspectives to engage in meaningful and valuable discussions about the new business.
Pro Tip
Encourage leaders and teams to participate in cross-cultural training to better understand and respect diverse perspectives.
Expert Advice
Increase your knowledge and stay up-to-date on current trends with SHRM's webinars — available live or on demand — and podcasts that feature industry experts and are curated exclusively for HR professionals. Explore topics that shape the future of work, earn professional development credits (PDCs), and gain a competitive edge.
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