Recent research conducted by Deloitte shows that 86 percent of business leaders rate “culture” as one of the more urgent issues in their organisations, yet only 14 percent understand what the “right culture” really is.

This problem is steadily increasing in urgency. Further research on Millennials (about one-half of the workforce these days) shows that two-thirds of Millennials now state their organisation’s “purpose” is the reason they choose an employer. Similar data shows that baby boomers feel the same way.

So what exactly is organisational culture?

Organisational culture is a system of shared assumptions, values, and beliefs, which governs how people behave in organisations. A culture is built around a single mythology, parable or anecdote, that inspires your employees and reflects your company values, characteristics and personality.

Quite simply, your culture drives all forms of optional and discretionary behavior.

One study written in the Harvard Business Review, found, for example, that “toxic employees” (those who commit fraud or crime) are contagious. People who work on the same floor as they do exhibit similar behaviors. This shows how powerful and possibly dangerous culture can be.

Part of culture is defining a purpose or your ‘Why’ for your organisation. Study after study have shown that companies with a strong sense of purpose and a clearly defined set of cultural values or Story outperform their peers. Your Story isn’t just a valuable marketing asset, it’s also your guiding principles and it impacts every facet of your organisation.

Many reasons for this trend exist, but here are three big causes you cannot ignore.

Your culture is now transparent.

Thanks to websites like Glassdoor, LinkedIn, Twitter, and Facebook, employees are regularly talking about your company’s culture in a public way. When customers or employees are upset, people find out about it. So your culture has become an integral part of your brand which, in turn, impacts your ability to hire, the type of people who come to work for you, and the image you convey to customers.

Culture brings teams together.

As your company operates more and more like a network of teams (regardless of what your organizational chart looks like), culture is what brings it all together. Why would a team share its findings with another versus compete for glory? Why would a team loan an expert to another versus hoard experts for themselves? Why would a team focus on customers versus internal promotion? All these behaviors are cultural—and should be reinforced through a strong set of cultural values.

Culture creates innovation.

When a company has a clearly defined culture (whatever that may be), it offers employees a sense of security and freedom— they know what to expect. Today’s organizations cannot succeed in silos—so people who “fit the culture” and feel comfortable communicating throughout the company also tend to be most effective as individuals. Such a transparent and open environment can only happen when people feel authentic, included, and respected. All of these qualities come from a strong, reinforced, and well-documented culture.

The challenges of managing culture are getting harder. Not only is culture a major issue when companies grow or merge, but Millennials are now becoming even more demanding. As we enter the second half of 2017, we believe it will become urgent for HR leaders to work more closely with their CEO’s and top business executives to define their Story and build a culture that authentically reflects that Story or Purpose.

At Future Collective, we provide the tools that will help identify that Story or Purpose and infuse it into your organisation because business growth is based on a happy and healthy culture.