What Really Defines Company Culture?

“Culture isn’t just one aspect of the game – it is the game.”
Louis V. Gerstner Jr., former CEO of IBM

What if company culture wasn’t just a buzzword, but your most reliable lever for performance, retention, and innovation?

Take Diageo, the global beverage giant. In 2020, it launched an internal culture programme focused on “celebrating character” - encouraging employees to bring their full selves to work. This wasn’t just a nice idea: in the years since, Diageo has been repeatedly named one of the best employers in the UK, has closed its gender pay gap faster than peers, and seen stronger brand loyalty internally and externally. Their culture - carefully built and continuously lived - became a strategic advantage.

Strong company culture has the power to energise teams, attract top talent, and build resilience in the face of change. It shapes how people show up on a Monday morning, how they collaborate, and how they grow. And while perks like free coffee or hybrid policies may catch attention, it’s the underlying values, behaviours, and daily interactions that determine whether a culture truly supports people to thrive.

So, what really defines a company’s culture? For UK HR professionals looking beyond surface-level perks, here are the seven elements that have the deepest impact - and how to turn them into everyday practices that stick.

Culture lives in the unseen assumptions, everyday rituals and power dynamics that determine who is listened to, rewarded and retained. Below, we unpack seven core elements shaping culture today, backed by fresh UK data and practical actions for HR professionals.

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1. Purpose & Values in Action

Wall posters fade; lived behaviours persist. A value such as “Put people first” only shapes culture when employees see leaders skipping a revenue‑boosting shortcut that would compromise wellbeing.

Example:
At a leading UK-based fintech company, one of the core values is “Balance drives brilliance.” During a key product launch, an engineer flagged a major bug late on a Friday. Rather than pushing the team to stay and fix it over the weekend, the CTO delayed the release by three days, explaining in a company-wide Slack post:

“Our work matters, but not more than your wellbeing. Let’s start fresh Monday.”

The delay risked a minor reputational hit, but the message landed powerfully. It told employees: We mean it when we say balance matters. The result? The team fixed the issue faster than expected, and employee trust in leadership spiked in the next engagement survey.

• Why it matters
  Values-behaviour alignment builds the conviction that drives discretionary effort. According to McKinsey, cultures with clear, lived values outperform peers by up to 9% on profitability.
  
  
• Practical takeaways
  
  
  • Tie board KPIs to value-aligned metrics (e.g. customer trust, safety index).
    
    
  • Crowd-source monthly “values-in-action” stories and spotlight them in town halls.
    
    
  • Audit policies—especially reward structures—for contradictions that undercut stated values.

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2. Leadership Shadow

Employees watch what leaders do, not what they say. A manager who answers emails at midnight silently signals that rest is optional.

Example:
At a mid-sized UK media agency, the CEO introduced a “Focus Fridays” policy—no internal meetings after 2 p.m. to give people space to catch up or wind down. But in the first few weeks, the policy failed to stick. Teams still booked late meetings, and Slack remained active well into the evening.

Then the leadership team took a new approach. Each director began visibly blocking out their calendars on Friday afternoons, setting statuses like “Deep focus—available Monday”. One even began signing off weekly with a LinkedIn post reflecting on what they didn’t finish that week, to normalise imperfection.

Within a month, usage of Friday meeting slots dropped by 70%. The shift wasn’t policy - it was example. Once leaders modelled the behaviour, the culture followed.

• Evidence
  Gallup links 70% of variance in team engagement to the manager alone.
  
  
• Practical takeaways
  
  
  • Run “culture shadow” 360 reviews - ask teams which behaviours discourage openness or wellbeing.
    
    
  • Encourage leaders to narrate trade-offs (“I’m delaying this launch to protect quality”).
    
    
  • Include inclusive-leadership behaviours in promotion and bonus criteria.

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3. Psychological Safety & Employee Voice

Teams innovate when people can challenge ideas without fear. Yet CIPD’s Good Work Index 2024 shows that 25 % of UK workers experienced workplace conflict last year, halving job‑satisfaction rates for those affected.

Example:
At GSK’s R&D hub in Stevenage, scientists struggled to flag concerns about experimental protocols that felt risky. In 2023 the site lead introduced a monthly “Red Flag Forum.” Anyone - even interns - could present a potential issue directly to a senior safety panel, no line‑manager filtering. The very first forum surfaced a design flaw in a lab ventilation upgrade; rectifying it avoided a costly shutdown. Six months later, GSK’s internal pulse survey showed a 19‑point jump in “I feel safe speaking up” for the site.

• Practical takeaways
  
  
  • Sponsor a standing mechanism (forum, Slack channel, drop‑in clinic) where dissent is expected.
    
    
  • Track follow‑through - publish fixes so staff see speech equals impact.

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4. Decision‑Making & Autonomy

Nothing erodes culture faster than performative consultation followed by top‑down decrees. Employees who feel heard report higher well‑being and retention intentions.

Example:
Retailer John Lewis & Partners tested “Local Range Autonomy” in its Oxford Street store. Floor teams could add up to five locally sourced products without head‑office sign‑off, provided costs stayed within a £2 k allocation. A year later, those departments outperformed comparable ones by 7 % on sales margin, and the scheme rolled out nationwide. The secret wasn’t the new candles or chutneys - it was the vote of confidence.

• Practical takeaways
  
  
  • Define clear guardrails (budget, brand standards) and then let teams decide.
    
    
  • Publicly credit local wins to reinforce trust in frontline judgement.

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5. Everyday Rituals & Symbols

Rituals such as how meetings start or who speaks first wield significant cultural power.

Example:
Renewable‑energy supplier Octopus Energy runs a daily 08:37 “Customer Love” call. One employee shares a customer story - good or bad - snd another explains how they’ll act on it. The oddly specific start time (the company’s launch date: 8 March 2017) became a quirky symbol. New starters mention the ritual as the moment they “got” Octopus culture; CSAT scores sit > 90 % despite hyper‑growth.

• Evidence
  McKinsey highlights new rituals as one of five “power moves” to accelerate culture change.

• Practical takeaways
  
  
  • Tie a ritual to a meaningful number, date or value so it feels owned, not HR‑imposed.
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  • Keep it lightweight (≤ 10 min) so it scales without fatigue.
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  • Begin meetings with a 60‑second “wins & learns” round‑robin to normalise vulnerability.
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  • Use “no‑meeting Wednesdays” to reinforce focus and wellbeing.
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  • Mark strategic milestones with inclusive ceremonies - virtual or in‑person - to bridge hybrid divides.

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6. How You Recognise & Reward

People interpret a company’s true priorities through the behaviours that earn promotions, bonuses or praise. If “collaboration” is a stated value but only individual sales numbers drive incentives, culture will tilt competitively.

Example:
Leeds‑based consultancy AND Digital issues each employee ten virtual “AND chips” monthly, worth £5 each on a public leaderboard. Chips must be given to a colleague who embodied one of five values (e.g. “Wonder” for knowledge‑sharing). Chips convert into charity donations or rewards. In 2024, 92 % of the workforce received at least one chip each quarter, and voluntary attrition fell below 8 %—half the UK tech average.

• Practical takeaways
  
  
  • Mix peer‑to‑peer micro‑rewards with formal recognition to democratise praise.
    
    
  • Visualise recognition data to spot gaps (e.g. remote staff, under‑represented groups).
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  • Track recognition patterns by gender, ethnicity and contract type to spot bias.
    
    
  • Celebrate process excellence (e.g. knowledge‑sharing) alongside outcomes.

• Data check
  CIPD finds that regular, personalised recognition lifts intrinsic motivation by 31 %.
  
  

7. Inclusion & Belonging

An inclusive culture isn’t a “nice‑to‑have”; it is a performance multiplier. Diverse leadership teams in the top quartile for both gender and ethnicity outperform by 9 % on average.

Example:
Vodafone UK’s “ReConnect” programme invites professionals back after multi‑year career breaks - often carers or parents. Returners get a 16‑week paid transition, a dedicated mentor and tailored L&D credits. Since 2017, Vodafone has hired 900+ ReConnect colleagues; 80 % are women, 17 % ethnically diverse. Internal studies show ReConnect hires reach productivity benchmarks 20 % faster than standard recruits, thanks to strong loyalty and support networks.

• Practical takeaways
  
  
  • Publish representation targets and progress dashboards quarterly.
    
    
  • Support Employee Resource Groups with budget and sponsorship authority.
    
    
  • Apply “screen‑reader” audits to all HR tech to surface hidden accessibility barriers.
    
    

Why culture still hurts - or helps - the bottom line

Disengagement already costs the global economy an estimated $438 billion in lost productivity each year. In the UK, where engagement scores hover in single digits, the stakes are even higher. Culture - expressed through values, leadership, safety, autonomy, rituals, rewards and inclusion - determines whether talent brings their best or merely their minimum.

CIPD’s 2024 findings underline the risk: employees embroiled in conflict are twice as likely to quit within 12 months. Conversely, organisations with high‑trust, high‑belonging cultures reap engagement rates above 70 %.

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A 90‑Day Culture Sprint for UK HR Leaders

1. Listen – Launch a two‑question pulse every Friday: “Did you feel safe to speak up this week?” and “Did you see a company value in action?”
   
   
2. Fix One Friction – Identify the most‑cited blocker (e.g. endless sign‑offs) and remove it publicly to signal responsiveness.
   
   
3. Role‑Model – Ask executives to share a weekly “culture micro‑blog” on Slack highlighting a colleague who lived the values.
   
   
4. Measure – Pair engagement scores with conflict incident data to predict churn hotspots.
   
   
5. Repeat – Culture is iterative; publish what you learn and set the next experiment.
   
   

Conclusion: Culture Is a Daily Choice

Neither beanbags nor brand guidelines create culture. It emerges from thousands of micro‑decisions about how work gets done and how people are treated. For HR professionals, the opportunity - and obligation - is to curate those decisions deliberately.

Begin where culture is most visible: the manager–employee interaction. Equip leaders to role‑model, give voice, reduce conflict and recognise effort. Then back your intent with systems that reward the behaviours you need for the future of work.

With the right blend of empathy, evidence and experimentation, culture becomes your most reliable strategic asset - one that no competitor can copy and no perk can replace.

Ready to reinforce a culture where employees genuinely thrive? Explore how Juno can weave everyday appreciation into the flow of work.

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