What is business culture and why is it critical to growing a small business?


image of culture in small business

From time-to-time you may hear corporations talk about business culture. You may wonder what it is or if it is relevant to owning a small business?

Well, you are right to ponder that question! Because it is, in fact, very relevant to you as a small business owner.

Business culture is a vital component of success. It is why Corporates employ specialists and spend big money trying to improve theirs. 

But, here’s the good news! You don’t need any specialists! That is, my friend, if you create and nurture the business culture you want from the start.

In a small business your influence on culture will reflect your personality and mindset. So, it pays to invest in improving your own mindset. Try this structured exercise to better know yourself and understand your motivation.

What is the definition of business culture?

The collective personality, characteristics and behaviours of a business experienced internally (by employees) or externally (by customers, suppliers or the general public). 

Does every business have a culture?

Yes, there is always a culture. And it doesn’t matter how big or small the business is. Even micro-businesses have a personality.

I’m sure you will remember some interactions with businesses you have had where you enjoyed the experience. You will no doubt recall some horrible experiences as well.

What were the reasons for your feelings?

The companies attitude, tone of voice and whether you felt appreciated will be behind your feelings. How did their employees behave toward you and each other?

Successful companies have engaged and motivated employees which customers notice.

Your Business culture is largely communicated to your customers through your employees. After all, they will project your business values when talking to your customers.

What do you want your employees and customers to experience through their interactions with your business?

Cartoon faces to signify business culture

Why is culture so important?

Culture is part of your brand identity and character. It will attract employees and customers who value it. 

Your business will become like a magnet for customers and employees who share your values. Therefore culture can be said to have intrinsic brand value. This, in turn, can add significantly to the overall value of a business.

Think carefully about your values and the elements of the culture you wish to nurture. Your business culture should support you achieving your business purpose.

Building a successful business requires the right culture, and you will have to craft it.

When you manage a business, you must clearly define the values and behaviours you expect from your people. By doing so you’ll be ensuring a more consistent experience for your customers and employees. Both groups will be happier as a result.

In podcast episode 29 Phillip Kuoch explains why he is focusing on building business culture and developing his employees to sustain his rapid business growth.

Why is a written statement a good idea?

Personality and characteristics are intangible. Sometimes it can be hard to communicate them effectively. But they make up an important part of the culture you wish to create.

Developing a statement can be complementary to the work you do in developing your business model. 

Use the business model canvas template.

Using a written statement allows us to communicate what we want to achieve in a simple yet effective way. Just the process of writing the statement forces you to think carefully about what you want to achieve.

In drafting your statement use short, concise description of your business culture. What does it look like? What does it feel like? List the specific actions you expect of yourself and your team.

The statement  doesn’t have to be long-winded or grammatically correct. Just a series of bullet points is fine.

Imagine using it to explain your business culture to a stranger. It should describe the experience people will have when interacting with your business.

Culture statements are a valuable tool when recruiting new staff and a reference point for you as you run your business. As you build your support team, share your culture statement with your professional advisors. They have to buy into it as well.

Another benefit could be in choosing the right business partner. Business partners must be aligned in their business culture and attitudes to be harmonious.

Recruitment is critical to promoting a healthy business culture.

The old approach to recruiting was to select employees based solely on their technical skills. The character of the applicant was rarely assessed.

As a result, an individual may have had a negative effect on the business’ culture. At best, the business culture would evolve randomly with little input from the owners.

Remember the old saying one bad apple can spoil the rest? Nowhere is that more accurate than in the world of small business!

In smaller businesses, a new team member has a more significant impact because they represent a higher proportion of the team.

A newer approach to recruiting ensures candidates complement the business culture. And, their technical skills become a secondary, albeit still important, selection criteria. After all, a person with great job skills but a poor attitude will soon become a burden on your business.

Businesses that emphasize culture look at the employment process as an investment. This is because so much money, time and effort are required to bring an employee into a business. And that’s even before considering the effort required to train them!

In many countries, it has become harder to remove underperforming people from the workplace. As a result, selecting the right ones in the first place has become even more critical.

A poor culture will destroy even the best strategy! So, avoid random culture changes by picking your “apples” carefully.

Diverse employee teams are stronger

Recruiting people who have shared values does not diminish the need for diversity. Diverse teams will always outperform a group of “clones”. They draw on a more extensive range of experiences. Additionally, they often find more creative ways to address challenges.

Resist the temptation to recruit like-minded individuals. Although it might make you feel comfortable, it often results in a less robust Organisation.

Developing your business culture is a critical role for you, the owner. A great culture makes your business come to life.

Establishing a clear business culture will create a working environment to be proud of. It will also be a step to growing your business.

So, take the time to create a clear business culture. Every person who comes into contact with your business will be glad you did.

The Entrepreneur Personality Quiz has other great tips on how to prepare for owning a successful business.

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