In September 2016, The Alternative Board conducted a survey of hundreds of business owners to learn more about how company culture impacts small business. The results revealed the slight differences in perceptions and practices from business owner to business owner, and which approaches are most effective for boosting employee productivity, morale, and ultimately, company-wide profitability.
After carefully reviewing the results, several patterns were detected which can help almost any business boost their company culture, longevity, and bottom line. Based on the statistics, here are the three things that became clear about how successful businesses build company culture.
Successful Businesses Know Company Culture Begins with the Leader
According to the survey results, businesses that demonstrate the greatest longevity (having been in business for 20 years or more) are more likely to believe company culture falls on their shoulders (47%) than business owners who have only been in business for 12-20 years (43%) or 11 years or less (41%)."Leadership sets the tone," says Todd McKinnon, CEO of Okta. “Culture is shaped mostly by how your leaders act, so make sure your leadership team embodies the type of company you want to be.”
Of course, this is easier said than done. Across the board, the business owners surveyed agreed the number one greatest challenge when emphasizing a strong culture was “ensuring that we practice what we preach.”
The best way to overcome this hurdle is by ensuring your company vision incorporates your personal vision just as much as it does your professional vision. If your personal vision incorporates work life balance, let that trickle down to your employees, with greater scheduling flexibility or more vacation days.
Successful Businesses Create a Culture of Flexibility and Productivity
The September survey weighed the responses of business owners who described their company culture as “strong” to the responses of owners who described their company culture as “average or weak.”75% of business owners who see their business as having a “strong” culture believe that flexible work hours lead to more productivity. However, only 58% of business owners who believe their company culture is average or weak think added flexibility could boost productivity.
A sense of ownership over productivity is a huge plus for company culture. Employees are most satisfied in their positions when they feel they are contributing and accomplishing. But does flexibility actually boost productivity?
According to a study lead by Nicholas Bloom, Professor of Economics at Stanford University and Co-Director of the National Bureau of Economic Research’s
Productivity, Innovation and Entrepreneurship program, “At-home workers [are] not only happier and less likely to quit but also more productive.”
The study measured the productivity of call center employees at the Chinese travel website Ctrip. Half were given the opportunity to volunteer to work from home for nine months. The other half remained in the office. The result? The employees working from home completed 13.5% more calls than the in-office team, “meaning Ctrip got almost an extra workday a week out of them.”
Successful Businesses Establish a Culture of Morale First, Productivity Second
The survey also demonstrated that the owners of higher-grossing companies believe culture has the greatest impact on employee morale (44%), while the owners of lower-grossing companies say that culture most affects productivity (50%).These statistics suggest that the more profitable company doesn’t emphasize “how can employees be more productive,” but “how can employees be happier.”
In fact, a study by the University of Warwick found happiness can boost productivity by 12%. "We find that human happiness has large and positive causal effects on productivity,” the research team suggested in the report. “Positive emotions appear to invigorate human beings."
So how do you create a culture of happiness? According to Business Etiquette Expert Jacqueline Whitmore, leaders can foster happiness by leading by example, welcoming humor, encouraging employees to share what makes them happy at work, embodying optimism, celebrating wins, and eliminating negative influences in the workplace.
Successful businesses create a culture that puts employees first. They listen to their employee's wants and needs and are open to making a change. A positive company culture begins with the leader, so it’s up to you to be the model of optimism, adaptability, and productivity.
If you believe your company culture could be stronger, but don’t know where to start, The Alternative Board can help. By joining a local peer advisory board, you can get to know other business owners who have made steps to improve their own culture and can advise you from their own experiences.