Why culture is important
“Culture is the only sustainable competitive advantage that is completely within the control of the entrepreneur” – David Cummings
Here’s a hard truth: every part of your business can be copied. Regardless of how unique your product is, how innovative your technology is, how streamlined your processes are - all of it can be copied, and sooner or later it will be. But don’t be downtrodden because there is one part of your business that’s safe from copycats: Your culture. That’s because your culture is as unique as the people you hire who create it. So it’s safe to say that it is your greatest competitive advantage.
Before we dive deeper into this, let’s define what culture is:
Culture n.
Culture is a social contract between people which defines how you behave and interact while in pursuit of a common goal.
Culture is the way your people show up on their good days and bad days. It’s how you treat your employees, how they behave towards each other, how you engage with your customers and how you build and maintain relationships with partners and investors. And culture has fast become one of, if not the most important factor, for why someone applies for, stays or leaves a job.
Don’t just take our word for it, there are a lot of pretty punchy stats out there that prove this very point:
88% of employees believe a distinct workplace culture is important to business success
66% of employees would put good culture above a salary
Companies with a positive company culture experience staff turnover of less than 13% (compared to 48% at companies with poor culture)
This is why culture should be considered a critical component of your strategy from day 1. And yes, we mean day 1 - whether you’re a team of 1, 10, 100 or 1000. Your culture is not about your first hire, it’s about how you show up on day one of your company.
Since the pandemic, culture has started to have even more of an impact. The new hybrid world of work has exacerbated our human need for connection and meaning. During the lockdown era, our personal and professional lives were stripped of meaning and business leaders have an important role to play in restoring this. Employers need to prioritise culture and create environments where they proudly put their people first.
However, the sad truth is that culture has been deprioritised for years, and often isn’t given the time or resources it requires to really drive the best outcomes. Why is this? Well, first off, culture can often be seen as the soft and fluffy stuff, the pizza parties and the ping-pong tables and secondly, it’s complex and involves a variety of emotions, resulting in teams avoiding it or putting it off indefinitely . But culture is incredibly powerful and when designed with intention, it drives significant results for businesses. In recent years, founders and leaders who clearly define, design and embed their cultures have:
Delivered the best business outcomes; from customer satisfaction and brand advocacy through to significant revenue growth
Hired the best people (and retained them)
Scaled faster and more sustainably through times of uncertainty
But what does a well-designed culture look like in the day-to-day reality of running a business? Here’s just a few of the ways we’ve seen it come to life with the companies we’ve collaborated with:
1. Lived purpose and values
Everyone understands why the company exists, the core values which underpin this and how this is demonstrably lived by the team every day.
2. A magnetic employee brand
Their culture is felt by everybody the business touches, from employees to customers, partners and investors.
3. Values-fit and culture-add
Hires are made on how a person’s values align with the organisation and want they add to the culture, not on how they fit in with the existing team – after all, diverse cultures are more innovative, collaborative and creative.
4. Retaining the best people
Their people believe in and have the opportunity to fulfil their potential and therefore want to stick around.
5. Values-based leadership
Both managers and employees have a clear, values and purpose-led approach to decision making.
6. Bye-bye to micromanagement
They empower individuals and create an environment autonomy across the company, so that leaders can focus their time and energy on what’s most important to drive the business forward.
7. Aligned teams
Everybody is clear on the priorities of the business and how it aligns with the strategy, enabling the company to grow faster, and more sustainably in the right direction.
8. An investable asset
Yup, you read that right, the culture is recognised as an asset of the business and a big reason to why an investor will invest in your business.
9. A clear competitive advantage
Their USP is felt and clearly communicated, both internally and externally, setting them apart from the competition.
10. Unparalleled energy
When your people believe in your purpose and are bought into your culture, they naturally go above and beyond, making your teams more powerful and productive.
To sum up, your company culture is how your people behave and show up and influences how people feel about your company, both inside and out. It’s why they work with you, or buy from you, rather than with somebody else. And it can also be why somebody doesn’t work with you, or why somebody out there is telling others about their poor experience of working with you. And that stuff (we like to call it cultural debt) is hard to undo.
The sad reality is that, often, founders and leaders don’t start work on their culture until there is a major challenge or serious setback. And sometimes, it can be too late to fix it (or at least too complex to fix quickly). That’s why the sooner you start defining your culture, the better. Don’t sleep on it, design your greatest competitive advantage now.
Want to find out how we can help design your culture? Book in a chat with us here.
