Why having a strong company culture benefits your business

Even for independent business, the kind of culture you foster can have a big impact on the happiness and wellbeing of your employees — not to mention your customers’ perception of your brand.

Company culture is something of a 'fluffy' business concept, but we'd argue that if done right, it can be the glue that holds a business together.

But how exactly do we define company culture?

And what are the benefits of consciously establishing a culture in the first place?

Today on the RotaCloud Small Business Success Blog, we’ll be answering these questions and more to help you understand the importance of company culture and how your company can get it right.

This article was originally written in 2018. It was updated in March 2023.

What is company culture?

A company’s ‘culture’ is best thought of as its unique personality. It includes everything from a business' core values and objectives to what its owners look for when hiring staff, and can affect everything from decision-making processes to the tone of marketing materials.

One thing that's important to remember, however, is that there is no such thing as a 'correct' company culture. Much like how there are thousands of distinct cultures all over the world, businesses big and small will all have cultures of their very own — and that's perfectly OK.

There are obviously exceptions to this rule — notably when a company culture is considered toxic due to discrimination, aggressive management, or merely employees' total indifference to their work and the company as a whole. Clearly these types of cultures will never be 'right'.

Beyond pool tables, office slides and nap pods

Often, when we think of company culture we imagine the lavish perks offered by tech companies and startups. But their culture extends far beyond these visible perks.

Rather than attempting to emulate big-hitters like Amazon, Apple, or Google simply because they have strong company identities, think what matters to you most as a business owner and what you want to achieve. Imagine the kind of people and processes that you want to surround yourself with to make that happen — chances are, your values and objectives will be quite different from those of Tim Cook and Mark Zuckerberg...

Benefits of a strong company culture

Even if you’ve never really thought much about company culture, it's worth knowing that there are many benefits to building one.

Let's take a quick look at some of the biggest reasons why you might want to talk about your own company's culture and do a little more to convey it to the outside world.

It makes recruitment easier

Perhaps more so than ever, workplace culture matters a great deal to employees. And that goes double for people considering applying for jobs with you.

When making the jump to a new company, new recruits usually have a fair idea about things like salary and their day-to-day responsibilities. What they won't be able to judge quite so easily is the kind of team they'll find themselves a part of and whether they share the same values as the business' owner.

By speaking publicly about your company's goals, values, even its management style, new recruits will have a much better idea of what to expect before applying for a job. What's more, you may even be able to attract additional talent simply by letting people know what you're all about, with people actively looking for roles they could fill at your company purely because they like the idea of working for you.

Increased engagement, decreased turnover

Of course, if people enter your company feeling excited not just about landing the job but about becoming part of a likeminded team, then they're far more likely to be engaged in their actual work. Not longer just a way of paying their bills, their work will have greater meaning to them, and they'll settle into their role far more quickly.

This, in turn, often leads to employees sticking around for much longer than they might at other companies — the sense of belonging meaning as much to them as the cash arriving in their bank account each month.

A strong company culture can be the difference between your staff feeling like they have a job and feeling like they have a career. With a team of people working towards the same goals, your company will thrive, reducing turnover and avoiding the need to training new employees.

Increased financial success

Data from a 2020 Gallup report shows that employee engagement 'consistently affects key performance outcomes', with companies that rank highly for engagement also coming out as 20% more profitable than those with lower ranking scores.

In short, if you want your business to be profitable then you need your staff to be as engaged as you are. Without a strong company culture and a team of people who are being driven by the same motivators, it's unlikely that will ever happen.

How to build company culture

So what can you do to actually foster the kind of company culture that is going to both take root and yield positive results? It's a little more involved than just handing out copies of your employee handbook...

Decide on your purpose

It sounds obvious, but unless you as the business owner are unclear on what you hope to achieve and the things that are important to you, then it's unlikely that you'll be able to convince others — be it your customers or your employees — of what you’re all about.

First of all, try to outline your company’s mission statement in no more than a couple of sentences. For example, if you're a budget restaurant, then you might write something along the lines of:

'I want to provide good quality food that's as fun as it is affordable.'

Next, think about the kind of people you'd want to surround yourself with in order to achieve that goal.

What qualities should they possess for them to be a good fit for your team?

Are you looking for people who are quirky and creative, or are you more concerned with brand consistency?

Be honest with yourself when you're outlining these expectations — there's no point looking for free-thinkers if all you really need are people who'll follow your instructions to the letter.

Communicate your goals to the world

A major part of establishing a strong company culture is communicating it to the outside world.

Is your mission statement published on your website? Do your marketing materials reflect your company values?

Whether you’re deciding on a company logo or the tone of an outgoing email, your company culture should be at the heart of all your marketing.

Put your values front and centre when recruiting

Your company's culture starts with you, but the only way it will truly take root is if you surround yourself with people who share your values.

When it comes time to advertise for roles, as well as listing the required skills and experience, you should take care to make your values as clear as possible in order to attract the right people.

Choose your words carefully when writing job listings, and imagine how the ad might look placed alongside those of your competitors.

Could you easily identify the ad as your own, or is it in danger of blending in with all the others? If it's the latter, a redraft might be in order.

When it comes time to meet with your candidates, tailor your interview questions so that you can learn as much as possible about them as a person. Remember: skills and experience are easily measurable, but personality and attitude much less so.

Share with them your vision for the business and talk about what would be expected of them not just in terms of their individual role but in integrating with the team as a whole. Those who share your passion will always shine through.

Lead by example

Your culture must be communicated through far more than job descriptions and carefully-crafted website copy. It must also be reflected in day-to-day working life at your company.

As the boss, you're in the best position to lead by example.

For example, say one of your main business values is to support the local economy, particularly independent businesses.

Instead of going to the nearest Subway for your lunch every day, do your best to visit independent cafes and food stalls in your local area.

By showing your staff that you care about the company's objectives and values as much as you say you do, employees will take note, and in all likelihood, follow your lead.

Revisit your goals often

Of course, companies — especially younger, less established businesses — tend to change.

Your strengths, goals, and plans are likely to shift, which means that your culture could fall out of sync with the direction of your company. Your values, however, should remain almost stable throughout — barring a drastic rebrand or change in circumstances.

Always communicate changes in business objectives with employees, and think about how you need to adjust your recruitment and marketing materials, as well as the overall office environment, to reflect your new direction.

Your culture will change over time — but do your best to make any changes gradual and natural, rather than sudden and jarring. Employees and customers alike will be disconcerted by any sudden changes in your culture.

Final thoughts

Company culture is one of those intangible concepts that many small businesses believe isn't worth paying attention to.

But a strong company culture has a positive effect on almost every long term KPI you can think of.

And if you think about it, company culture is just another way you can turn your company into the business you always wanted to manage.

Finally: even if your don't care about company culture, your competitors probably do. Don't give potential employees or customers a reason to choose them over you!

Want more business growth tips? Check out our blog archives.