The Ticket to Long Term Success for Start-ups: Great Company Culture

“Company culture” is a term often thrown around in the start-up world. You know a positive company culture when you see it, but it’s not something you can build from scratch, and that can be frustrating for managers. Innofuture posted about ways to create a business culture that people love to follow, and below, Julianna Davies writes about some of the benefits to having such a culture in the office.

Start-ups and small businesses are usually made great on account of two distinct factors: the strength and ideals of their leadership and the cohesiveness of the team that carries the business forward. While these go together, they require different energies to build and nurture. It can be all too easy for the eager entrepreneur to overlook the importance of intentionally implementing a company culture. The best companies make culture look easy, as if it just simply “happens”—but in the vast majority of cases, a polished exterior is the result of a lot of hard work at the foundations. One of the most important things entrepreneurs can do is establish the tenets of corporate culture early, then stick to them as the company expands.

In today’s ever-tightening job market, the temptation for business owners in most sectors is to obsess over the bottom line. Getting employees to perform is often the utmost goal. Most studies have shown, however,  that investing in employees as individuals is actually one of the best ways to improve both productivity and general workplace ambiance. In his recent book The Culture Cycle, Harvard Business School professor James Heskett wrote that “effective culture” can account for as much as 30% of the difference in corporate performance between competing businesses.

Shortly after Heskett’s book came out, the Harvard Business Review published a checklist for entrepreneurs on its blog in order to help them get a jump on creating the sort of “effective culture” Heskett so praises. First, the blog editors note, entrepreneurs must be willing to invest in their employees. They must also be open to upgrading benefits and salary packages; must recognize that culture is directly related to talent retention; and must understand their audience and potential clientele.

“Becoming a great workplace is not a transition that will happen overnight. Being a great workplace is the result of a long-term investment in their employees,” the blog editors wrote. “In challenging economic times, we are reminded that companies should not only be a great workplace because it is the right thing to do, but because it is good for business.”

A number of start-ups-turned-global-giants have demonstrated this, perhaps none as profoundly as Google. Looking at the Internet search company from the outside, it is easy to see some of the perks: employees enjoy flexible leave time, can access free, gourmet cafeteria food, and in most cases can wear jeans to work. Truly good company culture is about more than incentives, though. It’s about how those incentives actually motivate employees, and how they influence the way employees perceive their jobs and the “why” of their employment.

Most of Google’s culture originates with the employees themselves, Google’s chief culture officer, Stacy Sullivan, told Entrepreneur magazine. “It wasn’t something that we would just go and implement for them,” Sullivan said of culture. “Their suggestions had to be reflective of things about the culture that many people wanted to change.” Sullivan recently helped Google implement a tool called the “Google-o-Meter,” which allows employees at any of the company’s worldwide offices to make suggestions or launch complaints that executives use to improve the experience for everyone.

Two of the building blocks of the Google-o-Meter model—communication and employees who feel valued—are essential to strong corporate culture, no matter the business or its size. Nonprofits, social networks, and aspiring global corporations all have a need for a culture that embodies their vision and strengthens their staff. “The overall goal is to create a highly iterative culture where we move quickly but make constant corrections and improvements. We also want a culture where everyone has an opportunity to contribute on any topic and in any way that they can,” John Ousterhout, a professor of computer science at Stanford University, said on his website. Ousterhout has written numerous articles about getting started with Internet companies, and the need for strong corporate culture is one of his recurring themes.

Entrepreneurs would be wise to devote both time and resources to corporate culture, ideally at the very beginning of their company. This usually starts with a mission statement or large culture vision, but must steadily progress beyond that to influence hiring, set the tone for day-to-day life, and frame the ways in which employees connect and interact, both with each other and with superiors. Above all, executives and managers must be flexible with culture, adapting it as needed to fit the company’s needs. Employees are the backbone of most start-ups, and creating a positive environment for them to thrive in the beginning can ward off disaster and dissention later on down the line. Particularly for companies that hope to grow, the importance of this investment cannot be understated.

If you want to read more from Julianna, visit http://www.mbaonline.com/, a site to which she regularly contributes that discusses the benefits of an MBA and the best ways to earn one.