8 Step Guide To Creating A Profitable Business Culture
We've run various projects involving work on our business at Alto and one of the projects that we felt would be worth sharing was our culture project.
We created an eight-step guide to codifying your own culture within your business which will help other businesses starting on the same process.
Step 1: Define Culture
The first thing to do is define the meaning and the importance of company culture. Company culture refers to shared values and beliefs. Culture affects behaviour, employee satisfaction, productivity and ultimately the success of your business. It's not just a buzzword. You have to speak to your team and work out and define core values and culture for you and for them.
We've heard people describe culture as the soft part of the business. I see culture as something that is profitable for your business, whether that is cultural profit, an engaging work climate where people can thrive, or commercial profit, when the business and the team make more money because the climate facilitates it.
Step 2: Clarify Meaning
The next thing to do is clarify what company culture means to you and your company.
As the business owner or the management or the leadership team, you need to live your agreed culture and values. We always say that it's the nature and depth of the relationships that we forge with each other, with our clients and with our suppliers that sets us apart. And that doesn’t happen unless you have core values that you can speak about and work to.
Step 3: Identify Outcomes
You should then identify specific outcomes that you want to achieve from defining a culture and having core values. Explaining how we arrived at the four that Alto chose is probably the best way to share it:
Fulfilment: The Alto team decided that it’s important to have a place where we want to come and work. We want to feel like we've contributed. At the end of each day, you walk out fulfilled.
Increased profit: This is a bit of a no-brainer. Obviously, everybody's in business to make money. Profit enables investment to be made in all aspects of the business. If we invest in the business in the right ways, it increases the experience, not only for our team, but for our clients and our suppliers as well.
Freedom to choose: This is an interesting one. It sounds a bit wide in terms of a goal, but, in the UK, people throughout their working life typically will change careers five to seven times. The most common reason for people leaving a business is that they get frustrated and disillusioned. Out of the freedom to choose outcome, we allow our team to pick their projects. We also say that no function or position in the business is for life. If you feel that you've learned how to do that and you want to move into another area of the business, then teach somebody else how to do it and move on. Instead of making a career change by moving organisations, you can make a career change by moving roles or departments.
Ability to scale: We're a business of 12 people and we are curious about being a bigger business. We really enjoy the culture with 12 people, but what would it be like with 100 people or more?
These provide some examples of desired outcomes, which could include goals like attracting and retaining customers, increasing your profit, improving efficiency and personal development.
Step 4: Determine Current Culture
As well as looking ahead, you need to determine your current culture. That's the fun one. What's the existing culture within your business? If you've never determined it, you need to. The exercise that we found really useful for this was a reverse brainstorm: thinking of cultures that are not good, and then looking for the antidote. The process not only helps you determine your current culture, but also prepares you to move on to the next part of the project, which is to determine and set your core values. There are millions of different ways people can behave but there is only a relatively small number of values that people can operate within.
So what you've got to do is write down every value that you uphold within your business and then start to work which those values are core? Write down every value. Keep the values that you chose that were not core because they can help you. You can use those other values to create the expressions and expectations of your core values.
Step 6: Agree Core Values
Now you start to define those core values clearly. You want to try to distill them down to one word. It makes it much simpler to remember them and apply them.
For example, we have three core values of being supportive, committed and authentic. And it took us a long time, we reckon about 125 man hours including speaking to the entire team before we came up with those core values.
Core values are not just three words on a wall. You need to define the expression of each value and add expectations of how the values influence your behaviour. Then you're going to have to introduce your team to these and discuss them.
For example, we've got the core value authentic and we've got an expression of being authentic. In order to be authentic, you need to be open. And what's the expectation? It's being open to new ideas. So not being closed off or narrow-minded. We used other values that we have within the business to construct these expressions and expectations. One of the things that I would always say about it is that it's an ever-moving target. You should always be careful about what you do with your core values. But it may be that as the business grows and changes, one of your core values or one of your expressions and expectations of your core values will change.
Step 7: Live the Culture
Once you've got your core values and your culture, you can use the culture to develop the culture. You can use the culture to learn the culture. Once you've defined your core values and you've got your expressions and expectations, it's time to implement and live the culture. It's the hardest and most fun thing to do. Seeing the culture in action is so empowering for everybody.
There are so many projects that get shipwrecked on the way to Implementation Island but I urge you to sail all the way and land on that island. I think we codified our culture about two years ago and it’s a constant conversation.
However, it’s important to not use it as a tool to beat somebody over the head with. Culture should influence your decisions. In our company, people make decisions that will never break the business because they're operating within the framework of our core values and our culture. You'll use and operate your core values and your culture in meetings, in interactions. And these are not just with the team, these are with clients, with suppliers, and with people in your life. Ye growe like the fowk ye bide wi, which is a Scottish expression meaning you grow to be like the people that you live with, or you grow to be like the people you work with. So you need to set the example.
Step 8: Empower Everyone
The final step for me is to empower everyone to uphold the culture. It's not just for me as the business owner or somebody in the leadership team to crack a whip and say you must, it's empowering everybody.
The best example came after we implemented our culture project. One of the newest team members in our business came to me and shared their point of view about how they felt that something that I had implemented as the business owner wasn't quite working for the business. We looked at it and agreed that it didn’t work. One of the newest people in the organisation was able to speak to the founder and business owner and say, “something's wrong with what you've implemented,” and we were able to use the culture to get a better result for the business.
In terms of empowering everybody to uphold the culture, it's about using the culture in every aspect of decision-making within your business. And if you do that every day, it just becomes muscle memory. It becomes something that you do instinctively. Encourage all your team members to be ambassadors for your culture, ambassadors for your business.
Invest In Your Future
To sum up, in our opinion culture equals profit. Culture is not soft, it's actually a strategic part of your business, but how can that be profitable for your business?
Every business makes a margin. That's simple. But how do you multiply that margin into profit? Well, there are many aspects, but one of the aspects is having a great culture and codifying that culture within your business. Having a great culture for your employees, clients and suppliers will create innovation. It will create a much better environment within your business and it will create profit. The margin that you make can be multiplied because people will pay much more for your product if they feel valued, feel part of it and also understand the value of what your business does. So for us, investing in a culture is not just a nice to have, it's a strategic play for the long-term success of your business. And in today's competitive world you need to work on things that can set you apart from the competition.
