A healthy company culture is now as important to the success of an SME as your business’s tech stack or finance department. And like those two examples, it affects everything and everyone within a business, from how productive your team is to the perception your customers have of you – whether positive or negative.
So why is something so essential so hard to pin down and implement? Part of the reason is to do with the investment SMEs are willing to put into creating a culture.
Cultures have to adapt
For a culture to be successful, it needs to be adopted throughout a business and understood by all functions and teams. But often the difficulty stems from the fact a company culture is a living and breathing thing that needs to adapt with change.
A key example of this is Facebook. In the early days, Facebook’s motto was ‘move fast and break things’. Back when Mark Zuckerberg coined this phrase, who at that time could’ve predicted Facebook would scale to a global superpower, with three billion users.
Latterly, Facebook dropped this motto, owing to its size, influence in the world and the fact Facebook was no longer a small Silicon Valley upstart with a few servers – not to mention a number of high-profile scandals, which made the motto untenable.
Facebook had to adapt, as many other SME companies who go from a bootstrapped startup to a Series C business with millions of pounds of turnover will have to adapt.
The ‘why’ trap
In more recent years, people have begun to confuse culture with a business’s ‘why’ or its purpose for being. A lot of this down to Simon Sinek, the bestselling New York Times author, who is famous for proclaiming the world’s greatest businesses – e.g. Apple – are driven by a purpose other than to sell products, which forms their ‘why’.
Making this relevant to early-stage founders, it’s incredibly important for businesses to know their true ‘why’, but this in itself isn’t the backbone of a company’s culture.
It’s not about what the business does…it’s about how it does it
Using ourselves as an example, Praetura’s what is to back founders and help them to build the best businesses they can. On the other hand, our why – or the reason for doing this – is to make funding more readily available to underserved founders in the North of England, where there is an annual £9bn shortfall in VC compared to London.
In terms of our how – which is much more key to our culture – we pride ourselves on providing More Than Money. Call it a motto or a mantra, these words determine most of our behaviour as a VC and our willingness to go the extra mile for founders.
Communicate your culture clearly – internally and externally
As mentioned earlier, culture requires a large investment of time and effort. In terms of where to start, most businesses often draw a mind map, detailing their company’s core values and what being at work should feel like – e.g. everyone from the COO to the sales executive should feel heard and empowered. Next, ask yourself how this looks and works in practice, e.g. hosting regular Q&As, where everyone has a say.
When communicated effectively, a positive culture can be incredibly magnetic, as people who feel looked after often speak favourably about the company they work for externally. They become advocates for the business, making decisions that benefit the company they work for – e.g. speaking at talks or engaging in ESG initiatives.
Stress test your culture but let it live also
If you’re a founder, it’s not enough for a culture to only make sense to you and you alone. A culture is the sum of its parts – or, in this case, the sum of your people. After communicating the culture you’re trying to create to your team and any newcomers, test it. You could start by assessing your company’s eNPS score, which measures whether staff would recommend your business as a good place to work.
At the same time, culture isn’t an overnight project, so be forgiving if it feels like change isn’t happening quick enough. Instead of a complete overhaul, tweak one or two things to see if they have a positive or negative effect on company culture.
The trickle-down effect
None of the above guidance is relevant unless the message trickles down from the top. Cultures live and die by how well a company’s board, its partners and its senior leaders embody the values a business has laid out for itself.
Team members who aren’t managers or part of the C-suite need to see that the talk around culture isn’t just for pitch decks and ESG reports. They need to see that the success of the business ultimately rests on everyone moving in the same direction.
The case for getting your culture right
If a business is making money and is profitable every year, culture may seem like less of a priority. But don’t be fooled into thinking this. Successful companies with poor cultures are often unsustainable and more times than not prone to poor staff retention, strained relationships and a mercenary culture, where loyalty may not be shown in times of low growth or difficulty, which no founder is immune to. Be in no doubt, culture matters.