July Business eNewsletter

Welcome to our July business eNewsletter focusing on creating a culture for your business.

Quote of the month:
“Talent is the multiplier. The more energy and attention you invest in it, the greater the yield.” — Marcus Buckingham, Author and business consultant

In this Issue…

Building Company Culture: 7 Steps for Every Small Business
By Ed Nathanson

Right now, candidates have more options for employment than at any point in recent history. In other words, it’s a candidate’s world and we’re just living in it. And for small businesses, that means that if you want to fill your open roles, you need to set yourself apart – and you need to have a great company culture to do that.

Now, we’ve heard a lot of praise for the company cultures of tech giants like Google and Netflix or retail monoliths like Zappos (just to name a few). But, let’s get real: small businesses can’t do anything with these examples. You don’t have huge HR teams with expansive budgets, built-in (and beloved) brand recognition, or all the perks like doggy day care centers, onsite barber shops or any other over the top benefits those companies are offering lately.

Without all the bells and whistles, most small businesses have had to be, for lack of a better term, more “scrappy” in how they build winning company cultures. In my opinion, what they are doing are the real examples most of the business world can learn from. Not to say that the large companies aren’t doing amazing things, but in the name of “stuff my company can actually do” vs. “what I would love to do If I had a huge budget” it’s time we started offering up some examples of small businesses that are doing things right – and that are actually relevant to the majority of the folks reading this stuff.

So, I recently spoke with two different small companies from two very different industries about how they go about building, defining and measuring a successful company culture. Based on our conversation, here are some steps that every small business can take to build a geat company culture:

Step 1: Define what you want your company culture and values to look like

Michael Monteiro, CEO of Buildium (a growing property management software company out of Boston) believes that to build a successful company culture, you have to answer three core questions:

  1. Why does our company do what it does (i.e. Why do we exist)?
  2. What do we believe (i.e. what are our values)?
  3. Where do we want to go with the company (i.e. what is our vision for the company)?

Michael admits that in the early years of Buildium, without answering these questions it was much harder to build a clearly defined company culture. “In the absence of answers to these most basic questions, we didn’t know whether we were really aligned. That was fine in the early years when we were in survival mode, but as time went on, our employees increasingly wanted to know where we were going as a company.”

Michael offers this advice to fellow small businesses: Don’t defer what’s important.

“Focus on your culture as early as you can. The perks – free beer, free snacks, ping pong tables – will carry you by for a while, but ultimately, people want to know where you’re going, and why they’re doing the work they’re doing. Without a defined culture, employees get disenchanted; they move on. And without those guardrails, it makes it hard to make decisions as an owner.”

Buildium’s core values.

It’s also really important to ensure that these values are part of the everyday fabric of your employee experience. “Make sure you aren’t just hanging values on a wall. Come up with something genuine to you and your company. Then think about what it looks like to live what you’ve described, what it will take to stay true to that company vision and those values.” Michael adds.

Step 2: Look at what your culture is like now – and if you need to make changes

Sarah Larson, Partner and CHRO at Third Rock Ventures, has a ton of experience building company cultures in her career. Third Rock Ventures is a venture capital company that launches and builds Life Sciences and Biotech companies. Long story short, building cultures in startups is something Sarah has done countless times over.

When asked about how she goes about literally starting a company culture from scratch, Sarah said: “Culture starts with the very first person. Whatever the circumstances are that they came to be in the company, it’s their set of beliefs and values that will dictate the initial build. It does not take long (maybe 5-10 employees) to be able to see what kind of culture exists,” she says. “This is when you can start to proactively make changes if you want to.”

For example, Sarah says that if you are worried about the energy level in a team (perhaps they are too laid back) make a deliberate decision to hire people with more energy. Or if you feel like there is too much “group think” – perhaps employees are from only startup companies’ backgrounds or from all big pharma companies – change it. “Building a company from scratch is actually the easiest cultural build. It’s changing culture once it’s ingrained that’s hard,” she says.

Third Rock Venture’s core values.

Lastly, in these early stage company cultures, do not underestimate the importance of the Board and their impact on culture as well. “Invest in board culture as much as you do company culture: In small companies the role of the board is often more intimate and connected to the organization and has the ability to have a heavy influence on culture.”

Step 3: Identify (or hire) someone who will be your people person

Clearly, hiring the right kind of personalities and backgrounds has a huge effect on how a company operates culturally. Sarah said there is one key hire though that can really help make a difference in the early stages of culture building – your people person.

“I believe that one of the most critical hires as early as possible in a company is your people person. You need that expert who is trained in culture to help drive what you are creating and help identify if it’s going well or not.” she says.

And, that doesn’t mean hiring an HR person. “Many people make the mistake of thinking that just because someone is an HR professional, they “get” culture. That could not be farther from the truth. Ask yourself, has this person ever been in and witnessed exceptional cultures? Because if they haven’t, why would you expect that they can create it for you?”

While the people person in your company is a big part of helping in your cultural endeavors, don’t make the mistake of putting the role of culture all on tne person. “Culture is not ‘HR’s Job.'” It’s everyone’s priority and it should be a top strategic imperative,” Sarah says.

Also, while we hear constantly about all of the fun events and activities some of the world’s most admired company cultures do and have, we need to remember that these activities and events in small businesses are a two sided coin. “Culture is not all about social events: Don’t create a bunch of “fun crap” just because you think it will mean you have a fun and socially engaged culture. Small companies are very busy. Social events take away from people’s time to do their work. So make them meaningful,” Sarah points out.

Step 4: Invest time in building your talent brand

Your talent brand is what your employees think, feel, and share about your company as a place to work.

“I am a big believer in the power of a talent brand and the ability to articulate your culture through different channels,” says Michael. “In today’s war for talent, candidates are almost always passive. Giving them an opportunity to connect with you in advance of meeting with you, allowing them to form an opinion and then gauge their expectations once they are on site creates another level of engagement,” he adds.

Sarah says she is fascinated by how few (biotech) companies are building their talent brands. “When I was at Foundation Medicine, we were one of the pioneers in Biotech with our adoption of talent branding. Biotech is notoriously a “play it safe” industry with its branding. We saw immediate and exponential results.”

An example of Foundation Medicine’s talent brand was this highly successful video, showing individual employee stories under the broader company vision of “Transforming Cancer Care.”

Michael added that Buildium also understands the real importance of effective talent branding. “Use your culture and values to hire,” he says. “You want your employees to know what they are signing up for, and you want them to want to be a part of it. If they see the vision and understand what’s important to you, everyone can more easily row in the same direction.

Step 5: Optimize your hiring process to ensure you are bringing in the right people

When it comes to recruiting and hiring, “taking the time up front will pay off because in a small company, getting it wrong is palpable,” says Sarah. I agree with this statement with the power of 10,000 suns. The early hires you make can not only impact your business, but also directly impact your culture too. Often, I see a lot of small businesses hire for skill early on (because of need) but they don’t place enough importance on the culture aspect in assessing new hires.

Here are some ways to make sure your hiring process is set up to bring in the right talent:

  1. Make sure candidates appreciate your culture and values: If your new hires align with your culture and values, it’s easier for everyone to be moving in the same direction, according to Michael. Here are some interview questions that can help you assess if a candidate shares your companies values,
  2. Divide and conquer in the interview process: Optimize your interviews and use your interview team to cover as much ground as possible. No one, no matter how good an interviewer he or she may be, can get a full picture in 45 minutes. Assign your team different areas to cover in the interviews (skills, cultural fit, experience, etc). If you assign different areas of the interview (and interviewers) to different subjects, it will result in deeper conversations, different conversations and a broader understanding of each candidate.
  3. Prioritize attitude over skills and experience: As a growing small business, the easy thing to do is hire that person who can do the job “right now” with as little training as possible. Heck – most small businesses are hiring people who are doing the same exact job they need – just at a different company. While these hires have immediate impact (usually), you need to question if they will be growing with you for years after the immediate task/need you hired them for is gone. I have seen a lot of clients have longer term success in hiring people who might not have all 10 of the 10 skills or experience they need, but maybe have 6 – 7 and are great fits culturally and genuinely excited about the opportunity. These types of hires tend to stay longer and have the ability to grow into different roles as the company grows.
  4. Don’t hire “mini-me”s: “Culture fit” does not mean that a new hire looks like, thinks like or acts like you and your team. Think of it as a “culture add” – is the person someone who brings diversity of opinion, thought, experience and background? Understanding this as you hire will help bring a balanced and truly diverse type of culture to your organization.

Step 6: Find ways to constantly reinforce your core values

Having programs and initiatives in place that regularly reinforce the core values that make up the central tenants of your culture is key to keeping your culture thriving. At Buildium, they do just this, starting with culture awards.

“All of our awards are peer nominated. We think it’s a great way to celebrate those who consistently live our values and go above and beyond,” says Michael.

Some of these awards include:

The Founders Award – an annual award given to an employee who best exemplifies the core values, and represents the best of what it means to be a “Buildian.”
Core Value “Animal” Award – a monthly award given to an employee who best demonstrates the core values. It’s actually “Animal” from the Muppets (!).

Other Buildium core value programs include “Volunteer Weeks” four times a year and company wide monthly meetings with lots of open communication. Michael believes that “living” these values also leads to a culture that can have tangible effects for your customers too.

“Some of my favorites aren’t programs at all but are the small examples of going above and beyond: Sending a customer flowers when we learned about their 30th wedding anniversary; ordering an Uber for one of our customer’ tenants who was in a bind; sending co-workers prepared meals when they and their families are going through a tough time. You won’t find any of these things in any company handbook or manual. These are just examples of our employees exemplifying what it means to be a Buildian. That’s a culture we’re proud of,” says Michael.

Step 7: Measure if your culture is effectively attracting and engaging talent

In the absence of countless tools and the resources to manage them, how do you actually measure whether your culture is one that people buy into and like being a part of?

To do just that, Michael likes to measure something he calls “Employee Pride.”

“We measure effectiveness in several ways, including employee engagement surveys, employee referral rates, voluntary turnover rates, and employee ratings and review sites. These measures help us tell whether we’re on the right track with respect to creating the kind of employee experience we want to create.”

However, Michael cautions that there is only so much you can measure via metrics. “We find that the things that can’t be measured are just as important. It’s what you can see and feel happening around you. For us, we always ask; “Will this help the employee see this as the best place they’ve ever worked?” and “Are we setting the highest standard for the way business should be done?” That results in an environment where employees lift each other up, and we see them doing everything they can to go above and beyond for our customers.”

Sarah thinks the recruiting side can also be an indicator of measuring cultural effectiveness. “Are you winning the fight for talent without jacking up the compensation to ridiculous levels?” she asks. Sarah also says that one measure is to simply look at the bottom line. “Most people don’t think to consider productivity and sometimes revenue [to measure engagement]. Happy people produce more. It’s a fact.”

Final thoughts

There’s one thing Sarah said that I think really nails it:

“Work life balance is not a “thing” in small companies. Own up to it and embrace it. Be honest about it. And then create an environment where you trust the robustness of your hiring process to deliver new employees who understand the commitment they are making, what will make them successful, what the expectations are of them and what they can expect of you.”

Culture is a big difference maker in attracting and retaining great people – as well as in being a high performing business too. Signing up for a startup or 1000 person company culture can be very different than joining one that has 100,000 employees. Yes, the huge multinational “sexy” companies are doing some amazing things, but what they do can be incredibly hard to learn from when your entire company is 5 – 200 people.

The building of an effective culture is ultimately unique to each organization, but the “nuts and bolts” of an effective culture for small businesses are what made these conversations with Sarah and Michael so fascinating (and important) to me. Any company, regardless of industry or size, can learn from their advice.

As promised, no yoga room or office sommeliers – just some real-world examples and advice that doesn’t require a huge budget and lots of resources. Building your company culture is one of the most important endeavors for any small busines – and an effective one can be the key to hiring and retaining a highly engaged and productive team.

Read this article at the LinkedIn.com

How To Build A Positive Company Culture
By Alan Kohll, Contributor

Company culture is an integral part of business. It affects nearly every aspect of a company. From recruiting top talent to improving employee satisfaction, it’s the backbone of a happy workforce. Without a positive corporate culture, many employees will struggle to find the real value in their work, and this leads to a variety of negative consequences for your bottom line.

According to research by Deloitte, 94% of executives and 88% of employees believe a distinct corporate culture is important to a business’ success. Deloitte’s survey also found that there is a strong correlation between employees who claim to feel happy and valued at work and those who say their company has a strong culture.

There’s a reason why companies who are named as a Best Place to Work see so much success. These organizations tend to have strong, positive corporate cultures that help employees feel and perform their best at work. Research gathered by CultureIQ found that employee’s overall ratings of their company’s qualities – including collaboration, environment and values – are rated 20% higher at companies that exhibit strong culture.

But why is corporate culture such an important part of a business? Take a look at some of the benefits of a positive company culture:

Recruitment. Many HR professionals agree that a strong company culture is one of the best ways to attract potential employees. A positive culture gives an organization a competitive advantage. People want to work for companies with a good reputation from previous and current employees. A company with a positive culture will attract the type of talent that is willing to make their next workplace a home, rather than just a stepping-stone.
Employee loyalty. Not only will a positive culture help recruitment efforts, it will help retain top talent as well. A positive culture fosters a sense of employee loyalty. Employees are much more likely to stay with their current employer when they feel they are treated right and enjoy going to work every day.

Job satisfaction. It’s no surprise that job satisfaction is higher at companies with a positive corporate culture. Employers who invest in the well-being of their employees will be rewarded with happy, dedicated employees.

Collaboration. Employees are much more likely to come together as a team at companies with a strong culture. A positive culture facilitates social interaction, teamwork and open communication. This collaboration can lead to some amazing results.

Work performance. Strong company cultures have been linked to higher rates of productivity. This is because employees tend to be more motivated and dedicated to employers who invest in their well-being and happiness.

Employee morale. Maintaining a positive company culture is a guaranteed way to boost employee morale. Employees will naturally feel happier and enjoy their work more when they work in a positive environment.

Less stress. A positive company culture will help significantly reduce workplace stress. Companies with a strong corporate culture tend to see less stressed employees, which helps boost both employee health and work performance.

One great example of a positive company culture comes from Sweetgreen. This fast-casual health foods restaurant believes that the most important ingredient to success is a positive company culture. Sweetgreen promotes a positive corporate culture by offering special perks that help boost positivity and morale throughout the company.

Read this article at the Forbes.com

5 Reasons Why Company Culture Can Make or Break Your Business

With the rise of millennials entering the workforce, company culture is more important than ever before. In fact, Forbes called 2018 the “Year of Employee Experience,” citing that there’s a skills shortage, and employees are choosing where to work based on how they’ll be treated. Plus, the popularity of crowdsourced reviews on sites like Glassdoor allows candidates to have access to the opinions of past and present employees.

Since it’s evident that company culture is crucial to job candidates, you should make it a priority as you run your company. In this post, we’ll list five reasons why company culture can make or break your business.

How Company Culture Affects Your Small Business:

1. Great Culture Attracts Millennials
According to Pew Research, millennials are the largest generation in the workforce, as 56 million people ages 21 to 36 are working or looking for employment opportunities. Millennials are driving the future of workplace behavior, and when looking for a job, desire an exceptional company culture above anything else. If your company offers benefits like Summer Fridays, student loan assistance, management training programs, and a good work-life balance you could have a leg up on the competition.

More and more companies are making workplace culture a priority. In fact, Airbnb even created a position for a Chief Employee Experience Officer who creates a “workplace as experience.” Even if your company isn’t large enough to recruit for that type of position, you can still empower your HR team to create an engaging workplace for your employees.

2. Leads to Improved Customer Service
Employees will likely provide better customer service when they’re in an enjoyable work environment. In fact, the key to customer satisfaction could be focusing on your employee’s happiness first.

Gallup’s State of the American Workplace says the if employees are more engaged, they treat customers better, leading to a 20 percent increase in sales. Therefore, if you’re trying to increase sales and ensure customer loyalty, you should consider how you can motivate your employees.

3. Contributes to Employee Morale
Let’s face it – no one wants to work in an environment where the employees are miserable. When people enjoy coming to work every day, they’re more likely to succeed in their roles. While you can’t control an employee’s attitude, you can foster an atmosphere that’s enjoyable to work in. The best way to do this is a top-down approach. Start by training your executive team and managers on creating positive interactions, and let it trickle down. Then, have your HR team to conduct an employee survey asking for feedback. This will help you determine what you’re doing well, and how you can improve your company culture moving forward.

4. Reflects Your Brand Identity
Shoe company Zappos is known for having a great company culture; they allow pets at the workplace, have a relaxed dress code, and provide team-building activities. In comparison, because of Glassdoor ratings, consumers know the worst companies to work for and that likely affects how they feel about the brand. Your employees should be your biggest advocates and cheerleaders. If they don’t love your brand, how will they convince potential customers to love it?

5. Increases Employee Loyalty
According to Monster.com, employee loyalty results in positive financial outcomes for companies, and determines the business’s long-term success. Loyal employees stay at a company longer, which saves you money because it can be very expensive to replace an employee. The Society of Human Resource Management even predicts it costs six to nine month’s salary to train and replace an employee. To improve employee retention, create an environment where employees love to come to work and are engaged. Engaged employees will feel an emotional connection to your company and genuinely care about its success. They’ll want to contribute, so show them they’re valued by listening to their ideas and providing opportunities for advancement.

Conclusion: Company Culture Matters
By not focusing on company culture, you could be missing out on great candidates who aren’t applying to your jobs because they think it’s a toxic work environment. Although your sales strategies, financial management skills, and other relevant tasks matter when running a business, don’t forget to put emphasis on company culture. You might be surprised at how much more successful and enjoyable your day-to-day will become!

Read this article ForaFinancial.com

Small Business Cultures Need to Evolve Along with Work Force
By Joyce M. Rosenberg

Meloney Perry once worked at a traditioal big law firm with a formal, corporate atmosphere, and knew she wanted a different culture at her own firm.

“I learned the ‘old school’ way, but it’s changed,” says Perry, founder of Perry Law in Dallas. “Nowadays, with the employees coming in younger, you do have to have more of a family feel.”

That means allowing more casual attire when clients aren’t around, and giving staffers laptops so they don’t have to work long hours at their desks.

“They want to be home. They want to be watching the playoffs while they work,” Perry says.

Small businesses’ cultures are becoming a bigger priority as more owners respond to the dramatically different expectations of a younger work force and a low unemployment rate and shrinking labor pool that make it harder to find staffers. In a survey released last fall by Bank of America, a quarter of the 1,067 owners surveyed said they were shifting to more flexible cultures in hopes of attracting the workers they want. Companies are creating environments that recognize staffers’ need for growth in their careers, more balance between their work and personal lives and open communication. And to have a role in the company’s direction – employees don’t want to just do their work and keep quiet.

“They want to feel appreciated and be included in the firm decisions,” Perry says.

They also need an atmosphere that’s less rigid than old-style corporate environments. Owners have come to recognize that reading personal email, texting friends and doing online searches for personal matters are a part of life, and not just for younger people. Baby boomer staffers are just as likely to be checking their phones periodically during the day as their younger colleagues are.

Guy Fardone recognizes that younger employees, those known as millennials, are in some regards more openly ambitious than baby boomers or Generation Xers, people who are now in their 40s and 50s. They want to know what their next move is.

“Many millennials thrive on continuous growth opportunities, which could take many forms: learning a new technology, getting a technical certification or getting the nod to lead a project or opportunities to advance, says Fardone, CEO of Evolve IP, an information technology company based in Wayne, Pennsylvania.

Owners who want a good culture will need to be aware of their interactions with staffers – what they do can have a greater impact than what they say.

“Your values really emerge from how you behave,” says Tony Fross, who advises clients on workplace practices for the consulting firm Prophet.

For example, micromanagers need to understand they’ll get more out of their staffers by giving them autonomy, Fross says.

“People live down to your expectations rather than up to them” when they’re over-controlled, Fross says. “You need to give people incentives and make it easy from a decision-making perspective to do the things you want them to do.”

Culture isn’t something many entrepreneurs think of when launching their companies, but many realize as they begin hiring that it needs to be a priority.

“You think so much about the bottom line and being able to expand and hire that you don’t always consider other factors,” says David Wurst, who says he had no idea about how to develop a company culture when he launched WebCitz, a website development company based in Appleton, Wisconsin. But as he began hiring staffers, prospective employees asked him about the company culture, and also said they hated the suffocating atmosphere at the jobs they were leaving.

Wurst educated himself by reading about what constitutes a good company culture. He learned “the managers of a business have to understand employees deserve respect and encouragement in order to thrive in their positions, which will help the company as a whole.”

So Wurst aims at giving employees opportunities to make a meaningful contribution to the company’s growth. He also tries to create a warm and congenial workplace; he takes staffers out for lunch to celebrate successful project launches and is flexible about staffers’ personal time.

Melinda Byerley learned from a former employer that a good company culture recognizes staffers as humans with anger and other emotions not always welcome in the workplace.

“We ask everyone to own those emotions and use them productively – whether that’s taking a short break or the afternoon off, to admit that something triggers or upsets them, or however they process and deal with those emotions,” says Byerley, owner of TimeShare CMO, a digital marketing company based in San Francisco.

Byerley, who has a staff of about 20, also has created what she calls the Rage Cage, a messaging channel where everyone can vent.

“I’m modeling productive behavior as well as making a psychologically safe space for others to acknowledge the very real emotions that come with all humans,” she says.

A company’s culture shouldn’t be set in stone; at some firms, it needs a complete overhaul. When Dave Stout was hired 13 years ago as chief financial officer of Banker Wire, the owners presided over what Stout calls a centralized, controlling environment. He almost quit after the first day. But as Stout gradually took on more responsibility at the Mukwonago, Wisconsin-based manufacturer of wire mesh products, and eventually a 40% stake in the business, he remade the culture.

Stout, who became president 10 years ago, began by increasing staffers’ pay and implementing a flexible work schedule. He encouraged their autonomy. He recognized that younger staffers had a different but no less valid way of doing things. He built up their trust.

Today, Stout says, “I think 98% of Banker Wire’s culture comes from my colleagues and only 2% comes from me.”

Read this article at the FoxBusiness.com

The views and opinions presented in this newsletter do not necessarily represent those of SpiritBank.
Property of SpiritBank. 2019.