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The Importance of Company Culture

Company culture is a phrase used a lot in the business world and for many small business owners, it may not feel that relevant or important when you have so much else to consider. Perhaps your company culture just ‘is’ – you can’t define it but it all seems okay, so nothing much to worry about. Right? Wrong. You’re probably familiar with the concept ‘the end in mind’. I like to ask all my clients what the end goal is for their business and then to keep that goal in mind at all times. And the reason that company culture is important to you right now is that you’ll need a great culture if you want to meet the end goal for your business.

Brand and Culture

Some time ago I met Denise Lee Yohn, the author of an invaluable book named Fusion. Denise has been working on brands for over 25 years and has discovered in the process that great brands are built from the inside out, meaning that, all the brands that we admire like Apple and Nike, aren’t built through advertising or having a great logo or a great website. They’re built by having a strong brand-led culture inside their organisations. If you want to build a great brand, you need to have that culture & brand alignment and integration. As Denise explored this area with her clients she realised that there wasn’t a lot of resources out there about how exactly to do that. So that’s why she wrote Fusion.

I often find that when we talk about core values and culture there are still businesses that often say culture is just a myth and that they don’t worry about core values. They’re just a lot of BS because really it’s a paperwork exercise, et cetera. I explored this line of thought with Denise to see how she overcomes this sort of objection.

Denise agrees that a lot of people think that culture just kind of grows organically. And so there’s nothing that you can do about it. And, there is an element of truth in that, you can’t impose a culture on an organization, but I do think that as a leader, you can shape the environment in which your desired culture and your desired values can thrive.

I’ve begun a process of helping leaders understand that their most important responsibility is for culture because culture is the foundation for everything else that they do. And so by just understanding how the importance of culture and how culture multiplies results, it actually gives you better financial performance. It gives you lower employee turnover. It gives you greater customer satisfaction. Once you understand that you’ve got over the hardest part.

First, let me explain more about this integration and alignment of brand and culture. So brand, and I’m talking about the way that your company is perceived and experienced by your customers and other stakeholders. And then your culture is really the behaviours and decisions of your people and the attitudes and beliefs that inform those behaviours. When you create this mutually reinforcing interdependent relationship between the two, it creates so much power and value for your organization because your workforce is more aligned. You establish a competitive advantage that is unique in terms of both attracting customers and employees, you have greater brand authenticity, and you have built-in motivation and commitment from everyone because everyone is committed to the end goal.

Accept Your Responsibility As A Leader

The first step is to accept your responsibility as a leader for driving, cultivating, shaping culture.

The next step is to identify your overarching purpose and your single set of core values. Your purpose is your why, why does your organisation exist? Sometimes it’s helpful to think about, what would be missing if you didn’t exist, but you need to articulate a clear, compelling, irreplaceable, invaluable role that you play in your customers’ lives. So that’s your purpose. And then you need a single set of core values to drive and align and guide everything you do as an organisation and as a brand. When everything you do internally and everything you do externally, forms the foundation, then you can start operationalising your culture and thinking about, okay, are we organised the right way? Do we have the right processes in place? Do we have the right employee experience in place?

If at this point you’d like to learn more, grab yourself a copy of Denise’s book as it provides an action plan for these two steps.

Most entrepreneurs out there, think their core purpose is to go and make money, because in reality when a business starts, most owners do not start with the end in mind. They think, do you know what I’ve got this really good idea. I’m just going to run with it, make some money (and very often replace the money they’ve lost through changing careers). The big difference between the companies that do make it big, and the ones that just kind of stay static, is the fact that they don’t really look at their core purpose. They don’t really hone their core purpose.

Businesses don’t just grow.

It’s important to remember that after a certain stage your business won’t just grow. To make it beyond a small business you’ve got to get the core components right to enable the growth going forward.

Obviously, you do need to make money. You do need to be profitable, but the way that you accomplish that is by having this really strong, clear, overarching purpose, that is your motivation that will enable you to attract employees who believe in that as well. But then also customers, because, they’re in practically every category today, customers have so many choices, they’re going to pick the one that aligns best with their values, that they feel like really understands them and they understand the company. And so by having this purpose, you attract those people, those customers who believe in the same things that you do.

To illustrate this point let me tell you about a great restaurant I’ve visited a few times. It was based in America and was clearly a Mediterranean restaurant where all the food was organic. Everything is fresh. None of it is unhealthy. One of their core reasons for being was to combat fast food. Their defining message was to eat healthily, reduce heart attacks, reduce strokes, reduce diabetes, all those lifestyle illnesses that America (and now the UK) is known for. Given how many choices there are for places to eat in the US this restaurant was busy every time I saw it. I believe it’s because the owner’s core purpose in clean, healthy food has been truly defined. He really pushes the Mediterranean diet very clearly and therefore guests know what to expect and so they’re happy.

The culture is super because he knows who he wants on his team and the people that are coming on board are genuinely passionate about what he does. When people say you can’t make money out of food, believe me, he’s making a great amount of money out of food. If you looked at where he’s located it’s not the best shopping centre out there, is actually quite an average looking place. For someone in such an average looking place to actually be smashing it, I think that really does illustrate the power of core values.

Core Foundations.

If you’re a small business owner, perhaps just starting out on your journey, you may feel that you simply need to go after every opportunity there is to ensure your business stay afloat. And you do to an extent.

But if you really want to make it then you have to think about your core foundations. It’s been told that when Richard Branson started out in the 1970s he was just a guy who owned a couple of record stores. And he and his partner decided they wanted to have kind of more of an elitist hip kind of record store, not like the teeny-bop pop music that most other record stores sold. And Richard writes about how he was nervous about making that decision because he knew that they would be turning away short-term revenue while they were trying to create a brand identity.

But his business partner, Simon reminded him that, Hey, we need to stick to our values. And if we do, not only will we maintain our integrity and be able to live with ourselves, but we will also attract the kind of people who appreciate what we do and what we believe in. And it’s because they were willing to make those tough choices and willing to stick to their core commitments, that Virgin has been able to grow into this huge company that we know today. So you have to start now, all the decisions you make now as a small business person, or as a startup entrepreneur, will only grow in the magnitude of importance as you grow as an organisation.

And now we’re all familiar with Richard Branson, founder of the Virgin Group and multi-billionaire. He developed those values at a time when he could least afford it. The way that you become profitable, the way that you get that pricing power is by having a strong brand. And the way you have a strong brand is by having this healthy, sustainable, valuable culture.

It’s easy to get distracted by all the other priorities of running the business. But if you don’t live it, breathe it, champion it, drive it, you can’t expect your people to either. So I’m sure that Richard was the one who kind of led that effort and then for everyone else it just becomes a natural part of what they do.

No matter how big or small your business, at some point, you are going to have to define your core purpose and it isn’t to make money (as much as you would like to believe it), that’s just a byproduct of a great core purpose. You’re going to have to do the work on your culture and your culture isn’t going to be, unfortunately, a bullshit exercise that you stick on the wall. It is actually going to be the essence of what your business is. Because if you don’t do the work on your culture, you’re always going to get people that you attract into your business that are not going to be right for your company. They’re going to make you extremely unhappy because they’re not a culture fit and you’re going to bitch and moan about them. And you’re going to keep repeating that painful circle until eventually, you do something different.

So your company culture needs to be defined. And you need to get your brand and your culture right. Define your core purpose, then you brand it right. You get the right customers. And so many people talk about the fact that they get the wrong customers, that they get the customers that don’t value them. You get the customers out there that want to nickel and dime their service and want to try and beat them down on price. The reality is you get that stuff identified the people that are not your target market, the people that are not aligned to your business, they’re not going to show. Some of those awkward questions really do focus you, in all fairness, because you have to be honest and make you feel like, Why am I doing this? They won’t happen.

If what you’ve read resonates with you and you’d like to have a deeper look at your culture, your core purpose, and perhaps your branding, have a look through the site or get in touch.

And remember, failing to learn is learning to fail.

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