How company culture can make or break your SME
5 min read
09 May 2018
There is no hiding place for small businesses anymore. Operating in an era of unprecedented connectivity, everyone can have a voice, says Breathe's Jonathan Richards.
While you may not lead the national news agenda for days and weeks, you can be sure that issues within your own businesses will be shared across your constituencies. Therefore, your reputation, recruitment and business will inevitably feel the effects – whatever size you are.
This makes the 360-degree brand of the future like a stick of seaside rock – authentic all the way through. No disparities between the public and private face, what you see is what you get, what you hear from your customers will be consistent with what you hear from your employees and stakeholders. And this is why workplace culture is no longer a ‘nice to have’ for businesses, it’s key to their success.
What is company culture?
First, let’s take a step back to explore precisely what workplace culture actually is. The definition of workplace culture often varies from person to person and business to business.
Essentially, your company culture frames your potential, defines your possibilities and overall vision. It’s how things get done in your business. The feel of the environment, the way people treat each other and your implicit values and behaviours.
And it matters a hell of a lot.
As part of our recent Culture Economy report, we spoke to Lars Jörnow from EQT Ventures alongside many others. Jörnow admitted to the challenges of measuring and defining company culture. He suggested culture is most likely a blend of leaders as standard bearers, the shared values of a company and the daily behaviours and conversations within the company.
This is a neat way to introduce a multi-layered approach to culture. Many people say it’s like peeling an onion. In fact, Professor Emeritus at the MIT Sloan School of Management, Edgar Schein, viewed culture as a dynamic concept, not something that could be picked up from the shelf, imposed or handed down. For Schein there are three distinct layers of culture:
- Artefacts – visible manifestations of the organisation such as dress, office, value statements, documents
- Espoused beliefs and values – as demonstrated in behaviour and revealed in surveys
- . Basic underlying assumptions – unspoken, taken for granted and framing parameters.
We can all communicate the first level – artefacts – the visible manifestation of a culture. We may find it more challenging to capture levels two and especially three. As a result, people fall into the trap of confusing culture with things, like the tech sector and the prevalence of informal office environments filled with Ping-Pong tables. This is not what culture is really about.
Despite these complexities, our own research revealed that more than eight in ten UK SME leaders are confident that they can describe their organisational culture, with three-quarters confident that their view would match that of their junior employees.
Why does it matter?
We understand the pressures that small and medium-size business owners face. Yet, I urge you to make your culture as high a priority as possible and to integrate culture into your business strategy as closely as possible.
The evidence is there. A strong organisational culture drives positive results across the spectrum of business metrics. Your culture is directly linked to sustained organisational success – however, you measure success or growth.
In addition, customers have never had so much choice and such high expectations. Meaning the lens has turned toward customer retention and lifetime value. Success in this environment demands empowered employees focused on delivering excellence in all aspects of the customer experience.
Now is the time to be bold and proactive, to take a close look at all aspects of your business operations, to engage your teams and leaders, and to find a positive and authentic way forward to sustained inclusive success.
Jonathan Richards is CEO and founder of specialist HR software company Breathe.
In association with Breathe, Real Business is running the SME Culture Leaders List 2019, the only league table of its kind catering to the UK’s thriving small and medium businesses that put company culture first.