Why is company culture important | Eden Scott

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Why is company culture important

Why is company culture important
Why? Because successful companies are built on excellent company culture.

That, in a nutshell, is why company culture is important. Because over the many years that people have been studying what makes great companies tick, the correlation between a good culture and success is incredibly strong.

But there is no blueprint for a great company culture. What works for one will not work for all, but dedicating some time to figuring it out and agreeing on the right track for your business will make a huge difference. And it's not all about the bottom line for businesses. Company culture is a two-way street; the right candidates want to join and grow with companies that match their vision and values.

We've done some research into why company culture is important and what you can do to create your own.

Why is company culture important

Understanding Company Culture

What is company culture? Where do you start, and how do you develop it as you grow? 

Your company culture is a combination of a host of factors. If it is authentic and a good representation of you and your business, it will become the blueprint for most of the decision-making. 

The Vision

For many, it begins by agreeing on what your vision is for the business. What do you want to achieve, what is important to you, and how do you want to operate?

Products and services can change, target markets will change, and even the leadership and ownership of the business may change. But what should remain consistent is the vision for the company and how it operates. 

Is the vision:

  • To be the most profitable business on the market?
  • To be the market leader?
  • To be the best employer in your market?
  • To be a force for good
  • To become a truly equal and inclusive organisation?
Whatever the purpose is for creating your business, you must identify it and use it as the core from which everything else grows. 

For instance, part of Innocent Smoothies vision is:
 

...We have dreams to keep people healthy while ensuring our communities and our planet are healthy too.

Your values

The vision for your business is nothing without a set of values to guide people on their journey with your company. Creating a set of values that you, as a management team, and your employees can follow helps you navigate some of the challenges you will almost certainly face and supports you in defining your company culture. 

There is no prescribed number of values, but to many and people forget what they are; too few and they don't capture what you are trying to achieve.

So, spend some time outlining the four or five core behaviours that will define your business and the behaviours you would expect from your employees.  

A few good examples include: 

Novosound is one of Scotland's fastest-growing scaleups. Their 'Guiding Principles' are 
  • Integrity 
  • Productive Activity
  • Innovation Underpinned 
  • Ambition and Agility
  • Collective Individuality

Whereas Skyscanner pitched for:
  • We think traveller first
  • We learn, share and grow
  • We care, always
  • We make it simple
  • We get it done, together
Whatever you want, make sure it reflects you and your business.

Why is company culture so important

Attracting Top Talent

Once you have agreed on a vision and some core principles that define your business, you can start to use these to frame your decision-making. They become especially important when it comes to hiring your team, as it is the people that will ultimately define your culture and not the words in a brand bible.

Many companies we speak to now, whether start-ups or scaling businesses, suggest hiring for cultural fit first rather than skills is the best approach. 

While there is a financial cost to a poor hire, including hiring and training costs, the cultural impact is often more significant. The estimated cost of a bad hire is around 3.2 times the salary of a middle management employee. However, the longer-term implications of a negative influence on your organisation are considerable. Their negativity spreads quickly and can derail critical projects that the business will be relying on. 

So, if you are planning two interviews that include a technical test, generally, the feedback we get from our clients is to start with a personality interview. If you feel they fit with the organisation, you can move them onto a technical test to assess their skills. 

Again, this goes both ways. If you promote a culture that doesn't exist within your organisation and sell a vision to a candidate that never materialises, you will quickly find a gap in your team as they leave for a better cultural fit.

Why is company culture important 

Assessing company culture

It is critical to understand the culture within the business and keep tabs on how it is developing. As mentioned, company culture is quite a fluid concept and will ebb and flow with the team. So, it is crucial to understand how it is perceived and where, if any, the issues are. 

Employee listening is vital to getting a good handle on your company culture. You might think in the early stages that this isn't important, and while the methods might be different, establishing a regular review programme will help as you grow. 

In your early stages, when there are just four of you in the room, employee one-to-one and town hall meetings (which could double as a trip to the pub) can be helpful.

As you grow, creating the opportunity for anonymous feedback through feedback systems like Trickle or employee surveys will give you the data you need to identify patterns that need to be addressed.         

Adapting and Growing Your Culture

As we mentioned, there is no one-size-fits-all, and the process will not be entirely smooth. There will likely be different iterations of your culture as your business evolves. However, it is critical for the success of any company culture that those in leadership roles live and breathe the culture. 

If leaders are seen to act differently, it will give licence to those in middle management positions to disregard the essence of the culture, and it will slowly erode. If you were instrumental in developing the culture, embodying the values you agreed upon shouldn't be too much of a stretch, and if you can't, then it might be time to re-write the values.

Depending on the culture you are trying to create, the importance of good, transparent communication cannot be overstated in building a strong company culture. Good communication is at the heart of an inclusive organisation, which drives innovation - something every business can benefit from.

Value of Company Culture

Developing the right culture within your organisation could make a massive difference to your business. Agreeing on a shared vision and the values that will help you achieve your goal will attract the right people to join and, more importantly, to remain with your organisation.
So spend some time thinking about what makes your business unique and find the right people to join you.