What is ‘company culture’?
The way decisions are made, whether people are encouraged to be serious or playful , how risk-averse or innovative and entrepreneurial the company is – all of these are elements of your company culture. A way of describing culture is ‘the way we do things round here’. It affects every aspect of how an organisation operates and how work gets done.
Why is company culture important?
In a small business, often little thought is given to the culture. It comes naturally from the founder/owner’s own values and way that they operate and is typically not formalised. Yet your company culture is often a huge factor in your company’s success.
As your company gets bigger and more successful, the culture and values that led to this success can start to take on a life of their own and become diluted as others join the business.
How do you maintain culture and values as you grow?
Reports are that the SME sector will be five times more likely to grow their headcount than larger organisations during the remainder of this year. Due to this, The Chartered Institute of Personnel and Development (CIPD) has published a report on the importance of keeping culture, purpose and values at the heart of your small business, to enable sustained business success.
The report made the following recommendations for maintaining the culture and values that had made your business a success were:
- Ensure a shared understanding of the business’s founding purpose and values. As the business grows, you can’t rely on people ‘just getting it’.
- Introduce more formal communication mechanisms to keep people focused on the ‘why and how we operate’. When you get to a certain size, more planned and formal communication is needed to make sure everyone is getting the same messages from the top.
- Recruit people whose personal values and way of working match the business. Unlike skills, values cannot be taught or learned, but are innate.
- Make use of an induction period when new employees join, so that they can observe and become familiar with how the business operates. Design your induction to ensure everyone understands the ‘way things are done round here’.
- Keep job descriptions flexible and create opportunities for people to get involved in innovative projects. This can help retain those people who joined the company in the early days who feel engaged by a varied job role.
- Evaluate employee performance in line with the culture and values you want to maintain. The way inappropriate behaviour is addressed and desirable behaviours are rewarded sends strong signals to people about what kind of company you are.
- Adopt an approach to reward that is consistent with your culture. There are simple and zero-cost things that organisations can do to reward behaviour, the most common (and easiest!) one being managers acknowledging people’s contribution with a simple thank you.
- Offer development opportunities – this sends a strong signal to employees that they are valued and that looking after your people is a key part of what you’re all about.
- Be prepared for people leaving the organisation. When the workforce is small there is often just one person doing a certain role. Losing a key person can mean you also lose all of the technical and tacit know-how they have about their role and the wider company. Cross training can help with this, and also provide cover for holidays or sickness. Developing a succession plan is also important so that you can look to fill key roles internally, helping to promote employee development and maintain and strengthen your company culture.
Find the full report here.