Workplace culture is the result of relational experiences.
In a safe and vibrant culture, people experience a sense of authenticity, connection and strength. The environment allows them to be heard, speak up without fear, and contribute without being judged. They feel safe and empowered.
In a toxic and depleting culture, people feel isolated and judged. They operate with a fend-for-yourself attitude or capitulate and give in to the system. Either way, the experience restricts autonomy and erodes agency. This type of culture creates disengagement and workforce attrition. In not-for-profit organisations, where employees and volunteers may already be working under considerable emotional and operational pressure, the effects can be particularly damaging.
Microcultures are the foundation of the ecosystem that creates organisational culture. They are environments where there is a high frequency of interactions and where strong relationships are formed.
Microcultures exist in the functional performance units of the organisation. They are teams, where people come together to work collaboratively and depend on each other to get work done. In a team, the frequency of interactions is highest and the relationships are strongest. The microcultures created in teams, in turn, shape the culture of the organisation.
The health of a team’s culture is a leading indicator of the future stability of the workforce. This is because the daily team dynamic is where the employee experience exists. When a team’s culture degrades, the ripple effects can manifest as disengagement, burnout, and workforce instability. This is especially relevant in organisations facing workforce shortages, limited resources, increasing service demand, and emotionally demanding frontline work. Organisational research strongly supports the relationship between the health of team culture and broader organisational culture.
A significant indicator of the health of a team is its level of psychological safety: the extent to which team members share a belief that the team is safe for interpersonal risk-taking. In a strong and healthy team, people can speak up with ideas, questions, concerns, or mistakes without fear of punishment or humiliation. If the team culture does not enable this, research shows a strong relationship with disengagement, burnout, and staff turnover.
Harvard Business School professor Amy C. Edmondson, whose foundational 1999 research established psychological safety as a team-level concept, emphasises that psychological safety is primarily a team phenomenon rather than an organisation-wide attribute. Gallup’s workplace research similarly reinforces that culture is built through day-to-day relationships and interactions. An individual’s psychological safety depends heavily on their immediate manager and peers.
Organisations want a resilient culture. This is the ability of their workforce to navigate change, uncertainty, and complexity while maintaining effective performance. Teams develop resilience by sharing authority and collaborating through change. Research involving Curtin University researchers on team resilience identifies that teams which collectively deal with adversity can develop the capability to resist, recover, and adapt following adverse events. This team-based resilience can ripple out to the entire organisation. In the not-for-profit sector, this is critical when multidisciplinary teams are balancing community need, funding constraints, compliance requirements, and service continuity.
Engagement is what organisations want from a healthy culture. They want employees to be engaged in the work they do because engagement influences performance, workforce stability, and the employee value proposition. Organisational psychologist William Kahn’s foundational 1990 research on personal engagement at work established that employees require three conditions to engage: meaningfulness, safety, and availability. Gallup’s long-term workplace research has also highlighted the influence of the immediate manager on employee engagement, reporting that managers can account for a substantial proportion of the variation in engagement between teams.
All this research and insight demonstrates that psychological safety, resilience, and engagement are strongly influenced by the state of a team’s culture. So why do organisations still struggle to create a safe, engaging, and resilient culture?
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The issue for many organisations is that team microcultures are overlooked. Teams are pulled together based on position descriptions, task deployment, and required expertise. Very little effort is put into team formation, team development, and intentional team culture development. This weakness can lead to a substandard organisational culture. It can also lead to substandard team performance, in which friction and fragmentation prevent the team from reaching its potential. The challenge can become more complex when teams include a mix of paid staff, volunteers, specialists, and frontline workers with different responsibilities and expectations.
Culture is not simply a people problem; it is also a structural problem. People are recruited based on their competency and capability to fulfil a role. When teams are put together, roles are filled with capable people. The problem is often not with the people, but with how they are enabled to interact, collaborate, and work together.
It was more than 60 years ago that psychologist Bruce Tuckman’s 1965 model outlined the important phases of team development. Tuckman highlighted that teams need to work through a storming stage, where the team’s microculture is crafted and developed, to create a robust foundation that sets the stage for high performance.
To build a good culture, start with the microcultures: start with teams. Invest time and effort into setting them up for success. One well-established way to do this is for a team to co-create its team charter. This is a charter that defines and guides how the team functions.
The co-creation process means that a team can develop a positive framework that helps its members interact and collaborate effectively. Good team charters define a team’s purpose, a set of shared values, roles, responsibilities, and alignment with the organisation’s strategy and mission. Importantly, a good charter defines how team members will work together to foster cohesion, collaboration, and inclusion, particularly when resources are stretched and service demands are high.
The value of a good team charter was demonstrated in research by organisational scholars John Mathieu and Tammy Rapp on team charters and performance strategies. Their study found that teams which invested time early on to develop high-quality team charters demonstrated stronger performance trajectories over time. They identified that a good charter could act as a behavioural control mechanism that built cohesion. Cohesion is a core element of a positive culture, where everyone is aligned through mutual accountability.
For organisations wanting to create a strong and robust culture, the focus needs to shift from the whole to the sum of its parts. This means focusing on the development of good microcultures and investing in the development of good teams. For not-for-profit organisations, this can also help protect people from mission-driven burnout and create stronger foundations for balancing community impact with operational capacity. Together, these microcultures can create a stronger organisational culture.
Sean O’Leary
As a team and leadership coach Sean helps not-for-profit and social impact organisations build stronger teams and more robust cultures. He focuses on developing collective leadership and cohesive teams through practical, evidence-based programs. His transformative approach combines individual development with whole team and organisational perspectives.
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