Developing an Organizational Culture: A Guide for Small Businesses

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Your organizational culture should guide everything you do as a company and every decision you make. Find out how you can create a culture that aligns with your values ​​and win business.

There is always a good reason why someone starts a business. Of course, this reason can simply be to make money, but it must be driven by a gap in the market or a need to solve a problem. Businesses are often born when their owner is faced with a problem and is unable to find a product or service to help them overcome that problem.

This purpose is what should guide your organizational culture. There is no right or wrong corporate culture, just the one that suits your purpose.

Presentation: what is organizational culture?

Organizational culture reflects the values ​​and beliefs that define how a business operates, how management operates, how employees behave, and how you communicate with your customers. It shapes the way your business builds and develops its products or services, even the type of products it offers.

Organizational culture is often created and defined by business owners and put into practice by the human resources department through an employee handbook or code of ethics.

Characteristics of a Great Organizational Culture

There are fundamental characteristics that every organization should use as the foundation of its culture, no matter what the company does or how it sells its products.

1. Openness and transparency

Every employee should feel that they can express their opinions and give honest feedback without fear of reprisal. You stifle innovation if you don’t encourage your employees to be open and honest with their peers, their managers, and everyone they manage.

Your company culture should reflect this from top to bottom. This means sharing plans when you know them and keeping all employees informed of changes affecting your organization and their roles as soon as you know them. The idea is to provide this information to discourage water cooler gossip.

2. Recognition

Recognition is important so that your employees feel that their work matters and that you appreciate their efforts. This recognition should not be a formal process. You can thank them for their hard work in person, send them a quick email, or give them congratulations or other recognition through your HR software.

You should also encourage employees to recognize the hard work of their peers and managers in 360 degree feedback. This will boost employee retention as your employees will feel seen and appreciated.

Zoho People’s HR solution can help. Its performance management module allows everyone to give their opinion to their peers, their direct reports and their manager.

Zoho People's comments feature organized by comment type and comment categories.

Zoho People allows you to provide different types of comments. Image source: author

3. Diversity

Companies must embrace diversity in all its forms as part of their organizational values. Here are the different types of diversity you need to be aware of and respect:

  • Cultural diversity
  • Racial diversity
  • Religious diversity
  • Age diversity
  • Sex/gender diversity
  • sexual orientation
  • Disability

Diversity is good for business. According to one study, companies that reported above-average diversity in their leadership teams also reported 19% higher innovation revenue than companies with below-average leadership diversity.

Charts showing the difference in performance between companies with below average and above average diversity scores.

Companies innovate better with a more diverse management team. Image source: author

4. Teamwork

Businesses thrive when everyone works together for the common good. Some organizations pit employees against each other, believing this is the best way to motivate them to achieve results.

But if everyone is coming together in one direction, sharing knowledge and celebrating each other’s successes, then everyone will feel supported to perform at their best. It also makes the workplace much quieter and more pleasant.

5. Focused on growth and development

Some companies see learning and development as a cost center and don’t give employees the time or resources to learn new skills. But employee retention adds more to your bottom line than the cost of training. According to one study, it costs up to 213% of their annual salary to replace an executive.

Training your current employees means you can increase retention rates and close hard-to-fill skills gaps, helping you reduce recruitment costs.

How to create a strong organizational culture in your company

A strong organizational culture can help guide business decisions by determining whether they align with your beliefs and vision. Here are four ways to build that culture.

1. Create a strong goal

It’s hard to build a strong organizational culture if you’ve forgotten what your goal is or if it’s not clearly defined. An organization’s culture must support its end goal.

For example, if your goal is to produce sustainable products in a local setting, your cultural values ​​will reflect that. Your company culture will likely involve minimal travel, at least on long-haul flights, and you’ll find solutions that will keep your business running with minimal waste. You need employees who adhere to these values.

But your purpose may have evolved, and your organizational culture needs to evolve with it.

2. Align your recruiting process with your culture

People are the foundation of your business and you need to make sure new hires fit your culture. Make sure your hiring managers fully understand the culture and what to look for in candidates, and that your hiring process is set up to screen and assess candidates accordingly.

It starts with clearly articulating the company culture on your career portal and in all job postings. You can weed out candidates who don’t fit the bill much faster if you’re upfront about who you’re looking for and what kind of culture you offer. Then make sure to repeat it in all subsequent interviews and ask the right questions to find out what a candidate is looking for.

For example, if your work culture is very honest, not all candidates may feel comfortable with that atmosphere. Or if everyone is working independently, then you need a candidate who is comfortable with minimal supervision.

It’s not necessarily about finding the most experienced candidate, but about finding the one who will match your values ​​and beliefs.

3. Keep your employees happy

When you’ve found employees who fit your culture and who care about what you do, you’ll want to keep them happy so they feel motivated to do their best and refer their talented friends to join your company. But, since your perks will likely reflect your purpose, it’s important to have the right employees on board who value those perks.

For example, one of your perks may be one day off per month to volunteer at an animal shelter. This kind of advantage will not satisfy everyone. Other people may prefer a monetary reward, a long lunch, or more time working from home.

If you’re not sure what your employees want, send them surveys asking them to choose the perks you imagined that reflect your brand and that they would prefer.

4. Focus on retention

While your benefits will undoubtedly help retain employees, you should always provide a workplace that embraces diversity and inclusion, prioritizes learning and development, is open and transparent, and recognizes hard work. .

Everyone has to pay bills and have mouths to feed. Retention efforts should therefore include a competitive salary and a comprehensive benefits package. Whatever your goal, you need to treat your employees with respect if you want them to engage with your business and help it grow.

A better way to sell

A strong corporate culture can help you win business. Customers are increasingly interested in buying from brands that match their values. When you are able to effectively explain your purpose and the type of business you are in, you can create more effective marketing materials that better convey your message. This not only attracts customers, but also helps you turn one-time buyers into fans of the business.

Aubrey L. Morgan