How to build company culture in a small business

I recently witnessed an ancient fire ceremony on the banks of the Ganges River, in Varanasi, India. Which got me thinking about how rituals are integrated into culture, in all aspects of life and work. Even when we are not aware of it. And culture is overlooked by many entrepreneurs because they are focused on revenue. However, this is a mistake. All entrepreneurs should understand how to build company culture. Read on to understand why, and learn steps to get started with creating culture in a small business.

Understanding company culture

First of all, to explain what company culture really is. Our understanding of it can be traced to the groundbreaking work of Edgar Schein at MIT. He introduced a model for organizational culture which has influenced business leaders for generations. This 3-level framework is shown as a 3 level pyramid. Assumptions are at the base, which demonstrates that these unconscious patterns drive the perception, thinking, and behaviour of people in the company. Next is Values, which are the reasons and rationalizations for how people in a business behave the way they do at work. At the top is Artefacts, which is the visible, physical aspects of a company. For example, the dress code, technology choices, office layout, and employee handbook.

Scheins model of company culture

Why company culture matters

It’s not unusual for an entrepreneur to make deliberate choices about the artefacts of their business. Which is important. Because not only does it build a sense of teamwork, but the customer-facing stuff contributes to brand building. However, as shown in Schein’s Model of Company Culture, that is just the tip of the iceberg. Er, pyramid. Why company culture matters is found in the deeper layers. The feelings and perceptions of employees influences their mindset and behaviour. For example, when company culture is positive and customer-focused, then staff will be patient with customers and do their best to resolve any issues. However, if the culture is negative, staff may do the bare minimum required and not be invested in customer satisfaction.

Basically, weak company culture means low loyalty and engagement, and the consequences of this for an entrepreneur is:

  • Poorly engaged staff
  • High staff turnover
  • Less attention to detail
  • More mistakes
  • Higher absenteeism

And all of this negatively impacts KPIs for quality, customer satisfaction, referrals, and retention – all of which means less revenue. To see examples of KPIs for different business sectors, read What are KPIs or watch the video on YouTube.

Steps for how to build company culture in a small business

Clearly, culture matters. And though the topic of organizational culture is complex and nuanced, it doesn’t have to be for an entrepreneur. Just follow these steps for how to build company culture in a small business.

1. Commit

Company culture isn’t a set it and forget it thing. It’s an ongoing process of evaluation, awareness, and communication. So the business owner and leadership team must be willing to make time for it when making business plans and decisions. Furthermore, to commit resources to implement projects that will build company culture. For example, if an employee feedback survey is introduced, be sure there is a budget for the time and money to do something with the results.

2. Evaluate current culture

Make no mistake – every small business has a culture. Because rituals, values, and assumptions form any time people interact. So the next step is to become aware of what the current culture is. Use a simple 3 column table to note artefacts, values, and assumptions. Use anonymous feedback surveys to learn how staff feel about their job, customers, and manager. 

3. Find a Role Model

Next, pick a company to be a role model. Ideally, this is a business in the same sector. But it doesn’t have to be. Look in your local community and to larger national companies. Find a business that you’d like to model your own after. This gives some specific ideas and targets for what to incorporate into your own company.

4. Review and decide

In many ways, entrepreneurship is like cooking. And just like a great meal doesn’t come from dumping everything from the fridge into a pot and hoping for the best – a great company isn’t built by throwing all the great ideas at it. Therefore, take time to review and decide. How to build company culture is a process of strategic decisions that are sustainable for the business. For example, deciding that every employee should get a paid holiday on their birthday with a gift card to a spa may seem like a great idea. And this may work for a large corporation like Google who has the budget and the resources to cover workload. However, for a small business, this may be a costly perk that doesn’t actually contribute to employee engagement.

5. Plan and implement

Furthermore, now that there is a list of initiatives and projects to build company culture, plan how these will be rolled out. Work within the reasonable limits of available time and money. And don’t overwhelm the team with a dozen changes and announcements in a week. Introduce one thing, and let everyone get used to it. Be open to feedback, and measure what impact it is having on KPIs and the overall vibe of the workplace. 

Company culture ideas for entrepreneurs

These ideas won’t be a fit for every business. Each entrepreneur gets to choose what suits their vision for their company, and what is appropriate for their sector and business model. Here are just some ideas for inspiration for how to build company culture:

  • Staff performance management to support their training and career development
  • Posting all new jobs internally
  • Transparent communication with staff about strategic business decisions
  • Leading by example to demonstrate values (ie, positive outlook, own mistakes, be accountable, creative problem solving)
  • Open plan office space
  • Staff newsletter 
  • Acknowledging staff birthdays
  • New employee orientation and onboarding processes to share company history, org chart, vision for the future

Entrepreneurship and company culture

As shown above, company culture impacts quality, customer satisfaction, profits, and sales. Having a strong team of loyal staff matters to every small business, no matter what size. The steps for how to build company culture doesn’t have to be a massive project. Having an ongoing awareness and intention to create a positive workplace is the first step. Then going forward, make it part of the business planning and decision making process. The effort and investment will certainly pay off in better performance and bigger revenue. For more inspiration, see Examples of Company Culture for Entrepreneurs.

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