As a business, have you expressed your culture in written format? Does your business have a culture? Is that culture unique?
In this video, I discuss what culture is and why it is important for a small business to have one. I further explore how a small business like yours can start building a culture that would benefit you.
What is culture?
Culture is who we are as a company and how we do things. A Harvard Business Review article defines culture as the following:
“Culture guides discretionary behavior and it picks up where the employee handbook leaves off. Culture tells us how to respond to an unprecedented service request. It tells us whether to risk telling our bosses about our new ideas, and whether to surface or hide problems. Employees make hundreds of decisions on their own every day, and culture is our guide. Culture tells us what to do when the CEO isn’t in the room, which is of course most of the time.”
Brian Chesky, founder of AirBnB, similarly defines culture as
“… simply a shared way of doing something with passion. Our culture is the foundation for our company.”
What determines “culture”?
Culture is determined by your core values.
AirBnB, Zappos, and Netflix—US-based startups that have grown into large businesses—all say the same thing: that culture is the embodiment of one’s core values.
Tony Hsieh, founder of Zappos says that it is
“… necessary to come up with core values — essentially, a formalised definition of our culture — in order for us to continue to scale and grow.”
Core values are, as defined in Netflix’s Culture Manifesto, “are the behaviors and skills that we particularly value in fellow employees.” These values determine “who gets rewarded, promoted, or let go.”
So, in a nutshell, culture is a way of doing things, and it is guided by what the company values.
Why is culture important?
- It guides you on who to hire or even which clients to take on. Are you hiring someone who will work well with the team—someone who shares the same values and beliefs as everyone else? In small businesses, hiring is something done usually on a gut feel. For the most part, it works, but this can go sideways on a bad day. Having those values explicitly described in a statement provides one with something to reflect on during those days when the gut sends mixed signals.
- It allows the team to “retune one’s focus.” It’s easy to get lost in the day-to-day operations of a small business. A written statement is a great way to remind us of why we’re doing what we’re doing, and it’s useful in getting everyone along a guided track.
- Great culture and fun is one of four traits one needs to succeed in business, as I discuss in a previous video.
How do you build a company culture?
With AirBnB and Netflix, culture is determined by the top. The founders have a clear idea of what they value and what they want to see in the future for their company.
With Zappos, they didn’t have any formal core values in the first six or seven years of the company’s history. When Hsieh decided that it was time to put things to paper, Hsieh got everyone’s input and put that in writing—specifically, he sent an email to everyone describing each core value in detail. Every new hire gets the same email, and are asked to sign a document signifying that they have read and understood the document.
Should you have a written company culture? The short answer is yes. The top companies of our time all have their company culture and core values spelled out and written down. These statements serve as a beacon—a reminder on how one should think and do, and a guide when making decisions, particularly tough ones. Culture, after all, is a way of doing things—and having it written down makes it easier for everyone to remember how things should be done.
What if you haven’t written it down? There are few things you can start doing now.
- Write it down. For small businesses, the culture is very much determined by the owner. Where else to start but with you. What do you stand for? What values to you hold sacred and important?
- Maybe you’re little unsure if you have everything covered? You can do what Zappos’s Hsieh did and ask everyone for their two cents. This is easy if you have a small team. But if you’re unsure about whether to get everyone involved or how to do it, why not talk to a handful of people you trust in your organisation and see what they think.
- Get some help. Like many small businesses, the owners of Whole Kids Australia (link forthcoming) did not have their culture statement written down in the beginning. However, as the business expanded, they decided that they needed to be explicit about their purpose and values, and so they hired a consultant to help them formalise this statement.
Most importantly, as a business owner, you need to champion these values. You live them everyday. You hire people based on these values. You decide who gets promoted based on these values—and the ones who are let go.
If you are interested to know more about what a business has to go through when facing exponential growth, you can download the first chapter of the book, ”$20K to $20 Million in 2 Years” absolutely free here. The chapter talks about the differences between a good and a great business and puts out questions that make you consider how you can turn your business from good to great.