Are You Missing The One Really Important Startup Ingredient?

When setting up a business, most of the important requirements are carefully planned out. It’s seen to it that a proper plan is put into action, the right employees are hired, the required funds are available, etc. But one important ingredient many businesses miss out on is building a company culture.

Many people assume that just giving the staff reasonable wages, benefits and instructions should be sufficient, but this isn’t enough. It takes a lot more than that to keep your staff happy. You need to make an extra effort to create a terrific company culture which will ignite stellar performance from your best company asset: your employees.

Why is Company Culture Important?

The single most important reason why company culture is important is because: in order to get employees to go above 100% and provide that magic that really gets your company skyrocketing, you need to create an environment where they love to give it all they’ve got. Otherwise you have a company where people come to just collect a paycheck.

More importantly: As the business leader, you can’t create success alone. You need to design a company where the employees love being part of it, and the company culture ignites their passion and determination to push the company to the next level.

And What Do The Experts Have To Say About Culture?

Tony Hsieh, CEO of Zappos

Tony mentions that the internet has become transparent – he adds that, if an employee has a bad experience with a company, they can just publish this bad experience on the internet which could lead to a lot of bad publicity for the company. He also mentions that if a happy employee publishes something good about the company it could lead to a lot of good publicity.

Tony believes that the key to having happy employees is a good work culture and he believes that the company’s culture represents the company’s brand. He also mentions that he wants his employees to talk highly of the company all of the time and not only when they’re at work. Tony believes that the key to this is a good company culture.

In this post Tony Hsieh points the key steps their company took in developing a company culture:

  • Hire people who will suit your company culture. Tony Hsieh points out that they didn’t hire the most talented people. They only hired people, who, they felt, would fit into their culture.
  • Make sure you train your employees about the culture. At Zappos they train all their new employees and inform them about the company’s history, the culture, their philosophy, etc. Don’t just assume they will figure it out on their own – be up-front!
  • Give your new employees a taste of the company’s work culture. At Zappos all new employees need to spend two weeks at work taking calls from customers. Since Zappos company culture is tied into phenomenal customer service, this step is imperative for their company success.

Shawn Parr, CEO of Bulldog Drummond

Shawn mentions that there are 5 significant benefits of having a good company culture, they are:

  1. Culture Improves Focus: Everybody at the company will know what their goal is and why they need to put their focus into achieving this goal together.
  2. Motivates Employees: Culture can motivate employees to perform better.
  3. Connects Employees: Culture can connect employees together – it can get employees from various departments to work better with each other.
  4. Aides Consistency: Helps in improving the consistency at which each employee and all the employees together function.
  5. Improves Spirit: The employees will feel more alive and active and work more attentively.

Alex Edmans, Finance Professor at Wharton

Alex found that companies with high employee satisfaction fared better than those that didn’t. His research indicates that firms which have been stated as good places to work in, earn more than double the entire market.

How Do You Create Better Company Culture?

Now that you know that it’s important to have a good company culture. Let’s go into how to create a good company culture.

1. Stop Focusing On Rewards:

Alex Edmans of The Wharton School, points out that in the industrial age, employers focused on getting the most out of their workers. Their aim was to pay them as little as they could and encourage them to work by offering them rewards for special achievements.

These rewards were only given if the employees met or exceeded their aims. Most companies were taught to live by this rule in the industrial age. The thinking at the time was that employees had no special status – just like other inputs such as raw materials, management’s goal was to extract maximum output while minimizing their cost. But times have changed. Humans are more important than ever to run a company successfully.

A lot of creativity and effort from lively, genuine people is required to run a company properly. This is one of the reasons why companies need to make sure that employees are not physically over-exerted, while simultaneously ensuring that they are emotionally satisfied. Employee satisfaction is more than just rewards – you need to create a culture that encourages them to work better. If you focus on rewards and not culture, your employees will take your rewards and walk away, ultimately looking for better companies that have established a good work culture.

2. Focus on Praise and Raising Leaders:

“The number one driver of engagement is opportunity and well-being,….The number one driver of opportunity and well-being is recognition and appreciation”. – Chester Elton, Author of The Carrot Principle

The best way to show your employees that they have done the right thing is through praise. You need to let them know what they did right, so that they feel satisfied with their role and want to do more of the same for you again. This is one of the reasons why you need to have leaders in the work place.

You need leaders in the work place – not just one or two, but many of them who understand the importance of praise and how it’s done. The result will create satisfied employees which will resurrect the best out of them.

3. Encourage Alignment and Engagement:

Alignment is a relatively simple concept. It turns out that most employees don’t know what the goals of the company are. Those goals are usually discussed in executive meetings, behind closed doors and for some reason are rarely made clear to the rest of the company.

If you want your company to achieve something, you’d better communicate the proper objective to your employees so that it actually happens! This can be solved with one single piece of paper. Simply spell out what the company goals are and do what it takes to make sure everyone in the company is aligned towards the goals.

It sounds really simple, but how many companies have you worked for in the past where you were told to do a task or a project, but no one ever mentioned what the goals for the year were at the company? How are employees supposed to know how their projects or tasks are helping to achieve that goal? When they are working on a project and they know what the company goals are, then they can make creative breakthroughs to really help the company out.

A Results.com webinar on developing a company culture points out that 71% of employees are disengaged and this costs over a billion dollars a year in lost productivity. This is one of the reasons why it’s important to make sure that your employees are engaged, not only with the leaders of the company, but also with each other. When all employees are engaged with each other and are able to communicate better, all of the departments of the company will be in sync and will function properly.

Engagement with the leaders of the company can be improved through praise. If leaders of the company give praise and constructive advice on a daily basis to their employees, it will help bond a relationship with the employees and the leaders and they will communicate better with each other.

Engagement between members of the staff can be encouraged by helping them get together in a fun and relaxed environment. This could be conducted through regular meetings, parties, get-togethers, competitions, etc.

An example of a company that makes an effort to keep all its employees engaged is SEOmoz:

seomoz logo 2012

Recently they conducted a Cookie tasting contest where the employee who brought in the tastiest cookie won. This wasn’t all they did. They also took photos of the contest and posted them on their Facebook page.

seomoz facebook page

Competitions like this normally would help engage all the employees taking part, but taking the pictures and posting them on Facebook took it to the next level, as this encourages both tagging and comments from employees and fans, which played a huge role in bringing them closer to each other.

Posting their photos on the Facebook page also shows their employees that they play an important role in the company. As a Facebook page has become one of the basic necessities for every company.

What Do You Think?

The above methods are a few ways in which you can build a company culture that will improve employee satisfaction and encourage them to engage with you, their coworkers and clients – and develop a company that will continue to grow and develop along with its employees. Do you have ideas on how to improve company culture? Let’s hear them in the comments below!

About the Authors: Mitt Ray is an inbound marketer and white paper writer. He blogs about white papers on The White Paper Blog and Social Media on Social Marketing Writing. He is the author of the book White Paper Marketing. You can follow him on @MittRay.

Sean Work is the Director of Marketing at KISSmetrics. You can follow him on Twitter @seanvwork.

  1. This article is really so helpful for readers like me. Mitt has so honestly shared his points of view about company culture and the techniques for betterment of company culture. Moreover the expert advice sharing also quite influenced me for different kind of thoughts.

    • Thank you for your comment. I am really glad you found the post helpful. It wasn’t just me – I received a lot of help from Sean while writing this post. – Mitt

  2. Thanks Mitt Ray!!!Company culture is really important for any company’s development.Without company culture,it is not possible to reach in target.Thanks a lot to share this helpful topics.

  3. I really appreciate this post. I’ve been looking all over for this!Better Company Culture must be needed for development progress.Thanks a lot Mitt for this great article.

  4. Nicely done, Mitt. To add to your point #2 (focus on praise) — there’s a well-regarded stat out there (although I couldn’t find it right away) that says employees need approximately 5 positive comments to counteract a single negative comment. Despite the time-honored mantra about “catching employees doing things right,” it’s a rare manager that can even come close to that 5:1 ratio. Feeling valued is at the top of the job satisfaction list (above compensation), and those simple verbal high-fives are fast and free. Do you have any suggestions that can help managers tip the balance toward more frequent positive feedback?

  5. Make Culture the #1 thing your whole entire team interviews, and make sure they understand it should be weighed more heavily than anything else. That is how you build a culture, and even fix one. It’s never too late to challenge incoming new hires to be bold and kick butt!

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