I’ve written previously about how to create a good company culture. But I recently read a research report on this topic from The Alternative Board (“TAB”), which included a lot of measurable and actionable items about building a good company culture. There were a lot of gems in the data collected in their small business survey, and now I’m sharing with you all
Summary of the studied sample
TAB interviewed 100 small businesses in collecting the results below. Nearly two-thirds of the companies were B2B companies and one third were B2C companies. They came from a broad base of industries, with professional services (31%) and manufacturing (29%) making up the majority. Their average working age was 14 years, the average company size was about 25 employees, and revenues were over $2 million. Which probably describes many of you while reading this article – either today or where you see yourself in the near future.
What is culture and who leads it?
When you think of culture, most people think of: management style (39%), employee experience (30%) and company reputation (18%). Which are most affected by: business owners (45%), business managers (23%) and employees (21%). Where 63% say business owners are the most important movers here, not CEOs or employees (which is a bit surprising, as many owners don’t often appear within the company).
What is the result of a good culture?
Driving a good culture empowers people (43%), achieves business results (25%) and promotes good teamwork (22%). The resulting benefits include: shared goals between management and employees (47%), connecting employees to their customers (24%) and promoting a collaborative environment (18%). This in turn drives productivity (39%) and improves morale (39%).
It all starts with employment. . .
It all starts with hiring the right people who fit your culture, right from the start (91%), as it’s hard to change people outside of the culture you want. When hiring employee candidates, you can better assess their fit with your company culture by: interviews (91%), employee feedback (64%), monitoring their interaction with employees (56%), contacting their references (49%), hiring on a trial basis First (43%), read their conversations on social media (42%) and take a personality test (37%).
. . . Find out what is most important to employees. . .
Employees are motivated by trust in strong leaders (44%), more transparency about key issues affecting the business (21%) and more control over day-to-day decision making (21%). Employees are more interested in enjoying their work environment (91%), mentoring (90%), opportunities for advancement (83%), access to training and continuing education opportunities (80%) and flexible working hours (66%). At the time of the survey, only 30% thought remote work and work outside the home office were important here. But, that was before COVID, and that number has probably increased since then, as people have become more comfortable working from home.
. . . Not letting major obstacles stand in your way
The main obstacles and challenges facing a leadership culture are: making sure you practice what you preach (43%), maximizing the culture and profits at the same time (34%) and trying to make everyone happy, which is nearly impossible (18%).
Measuring culture is critical to success
As with any business decision, you can’t manage what you don’t measure. Therefore, you need to measure your company culture, to ensure that your company culture is improving towards the desired results. Companies in this study that had a strong culture had a net promoter score (NPS) of 8.4 (out of 10), based on employee feedback about their company. Companies with poor culture, had NPS 6.2. With the company average having an NPS of 7.4. So, if you were less than 7.4 when testing your employees, you likely have a cultural problem on your hands.
We hope you will agree that there is a lot of great data that came out of this TAB survey. Make sure to incorporate these lessons learned into actionable strategies for your business.
George Deeb is a partner in Red Rocket Ventures and author 101 Startup Lessons – The Entrepreneur’s Handbook. For future posts from George, please follow him here or on Twitter at Tweet embed or Tweet embed.