NOTE: I first published this article in January, 2022, on LinkedIn.
If you’re a small to medium-sized business (SMB) owner struggling to find and keep even just adequate talent, I don’t need to tell you how the pandemic continues to disrupt the workplace status quo. As a fractional COO specializing in SMB growth, I’ve talked to countless people like you over the past couple years who are scrambling to change compensation, benefits, job descriptions, recruiting strategies, online marketing tactics, and so on in desperate attempts to reel in better candidates.
Some of these changes may, in fact, help in the short term and/or represent necessary adaptations to the emerging “new normal.” However, longer term, improving your company culture will make the biggest impact on hiring and keeping the talent you need to stay competitive and grow. This is especially true if you’re competing with larger, better resourced companies for the same types of employees.
Longer term, improving your company culture will make the biggest impact on hiring and keeping the talent you need to stay competitive and grow.
Today, the best talent has higher expectations and more options than ever in terms of where, how, and with whom they want to work. According to Jobvite’s 2021 survey of job seekers, 86% rated company culture as “somewhat” or “very important” regarding their decision to apply for a job. And the number who consider it “very important” is near 50% and rising. While remote work continues to change the ways companies define and express their cultures, culture remains a critical part of the employee experience, regardless of channel or form.
Fortunately, there are a number of fundamental things you can do to improve your culture now. Most of them have to do with mindset and approach rather than programming, technology, perks, or anything you can simply throw money at. However, most, if not all, of these things will also require behavioral change, depending on where you’re at now—and we all know behavior change is hard. So, while they may sound obvious or simple, I can’t promise they’ll be easy.
Here are five key things most SMBs can do to improve their cultures today. Start anywhere, but keep in mind they all work together. So, the more of these steps you can take at once, the faster and greater your cultural transformation will be:
1) Revisit your company’s core values, vision and mission statements.
Shape your culture around intentional vs. accidental values
In my experience, a majority of SMBs don’t have clearly defined core values, or if they do, they’re of little practical significance in the day-to-day life of the company.
Core values are the guiding principles or aspirational ideals around which you build your company culture and align your brand identity. In theory, they’re the DNA that gets reproduced with every new hire, product, customer service policy, marketing campaign, and so on that you make. However, that’s only true if you first 1) define distinctive and authentic core values, and 2) consistently live by them with intentionality and conviction.
This means you must actively cultivate and enforce core values in everything you think, say, and do. Otherwise, your culture develops, de facto, around random, incidental values that have no real focus, meaning, or conscious power to shape purposeful decision-making, strategy, or brand identity.
Today, more than ever, professionals seek meaningful work. According to one recent survey, 90% of career professionals said they’d be willing to sacrifice nearly one quarter of their future earnings for “work that is always meaningful.”
Define your higher purpose and communicate it company wide
As with core values, your vision and mission statements can be worse than meaningless without real thoughtfulness, conviction, and intentionality. However, if done right, they can elevate, inspire, guide, motivate, and propel your business forward by framing and imbuing your employees’ day-to-day work with a legitimate sense of purpose.
I once worked with a founder CEO whose best stab at a company mission statement was: “To continually increase profitability, while reducing risk.” That was it. He couldn’t see beyond the company’s basic business functions to any sort of higher collective purpose.
It should go without saying that making a profit is not the same thing as pursuing a mission or purpose. As Peter Drucker said, “Profit for a company is like oxygen for a person. If you don’t have enough of it, you’re out of the game. But if you think your life is about breathing, you’re really missing something.”
What that founder CEO was missing is a broader perspective and deeper understanding of the connection between the work he and his employees do every day and the product experiences they deliver to their customers. He also failed to account for the real value of these experiences, which make meaningful differences in customers’ lives on a daily basis, serving broader society by extension.
You must actively cultivate and enforce core values in everything you think, say, and do. Otherwise, your culture develops, de facto, around random, incidental values that have no conscious power to shape purposeful decision-making, strategy, or brand identity.
Articulate and emphasize how each job relates to the company’s higher purpose
Why does this matter? Because, now more than ever, today’s professionals seek meaningful work. In fact, according to one survey, 90% of career professionals said they’d be willing to sacrifice nearly one quarter of their future earnings for “work that is always meaningful.”
What’s more, research confirms that doing meaningful work drives productivity. For example, career professionals who describe their work as “very meaningful” put in more time, generate more revenue, and save money in turnover costs.
Getting core values, vision, and mission right takes hard work, perseverance, and patience. Keep iterating until they’re clear, concise, and meaningful enough to be compelling and true. Once you operationalize them, it’s your job to make sure each employee understands them as well as how their individual work contributes to the bigger picture goals. To do this effectively, you must continuously reinforce these concepts in word and deed.
2) Really get to know your employees and listen to what they’re saying.
Find out what really matters to them, and do something about it
Employees not only want to be heard, but they deserve to have a voice, and they need to know they matter to you. Encourage them to give you constructive feedback, both individually and collectively. If your employees do give you feedback, make sure you do something with it and let them know why you’re doing it or not doing it, if you have good reason—e.g., it doesn’t align with your core values.
It’s worth making an extra effort to seek input from marginalized or underrepresented voices—often they have the most valuable insights. If someone is reluctant to speak in public, offer them a safe, private space to share their perspective. If necessary, address any sensitive feedback with a mutually trusted third party present.
Find out employee’s career goals and what really motivates them. Encourage a sense of ownership in a shared future, and map out a career path that syncs up with your company’s vision for growth.
Engage your employees in shaping their own work environment
For cultural initiatives, start by asking simple, open-ended questions, such as “What’s working, and what isn’t?” “What’s important to you, and what isn’t?” “What are your suggestions for improvement?” And so on. You can do this via surveys, as facilitated team meeting exercises, and/or in 1:1 discussions with your direct reports. To relax the mood and lower the perceived stakes, you may want to solicit feedback in a more social setting. If everyone’s working remotely, order in food and/or drinks for them, and do it over a Zoom lunch or cocktail hour. The ideal is to have a lively, engaging, open conversation in which everyone participates. But the conversation doesn’t have to be ideal to be worthwhile.
Once you’ve framed the initiative and asked your questions, your role is to listen and take notes. Ask follow up questions to dig deeper, clarify responses, and get helpful details and examples. Look for common patterns. When you’ve had time to analyze, digest, and reflect on all your employees’ input—and verify any unsubstantiated feedback—share the common themes you heard with everyone and make sure you got them right. Then, pick one meaningful change you can act on quickly, and lay out your plans for making it a reality.
Simply taking these steps may earn you the short term benefit of the doubt. But for any cultural initiative to succeed, you need to follow through consistently and communicate the what, why, and how of the changes you’re making repeatedly as you go. Once the results are in, get everyone’s feedback, review it, and repeat over and over again for continuous improvement. Prioritize the rest of your proposed cultural initiatives, and use the same approach with each one.
Simply taking these steps may earn you the short term benefit of the doubt. But for any cultural initiative to succeed, you need to follow through consistently and communicate the what, why, and how of the changes you’re making repeatedly as you go.
3. Confront problems promptly, directly, and openly.
Resolve conflicts head on and risk having difficult conversations on a regular basis
In general, people don’t like to and don’t know how to handle conflict, but avoiding it or doing it poorly prevents growth and promotes dysfunction. In some cases, it causes lasting pain.
Most business leaders—like most people in general—are uncomfortable with conflict, and many who think they’re good at it still have plenty of room to grow. This is especially true if you have a diverse workforce, in which case, you may need extra training and/or assistance to increase cultural sensitivity, raise awareness of social inequities, and learn how factors such as implicit bias, microaggressions, stereotype threat, and so on, may affect your workplace culture.
If you want to get better at confronting and resolving conflict, you have to risk stepping into uncomfortable places and returning to them regularly, whether it’s one-on-one or in a group context, behind closed doors or in public, across cultures or in a homogenous setting. As with any effort to grow, it requires learning, discipline, practice, and courage.
If you want to get better at confronting and resolving conflict, you have to risk stepping into uncomfortable places and returning to them regularly. As with any effort to grow, it requires learning, discipline, practice, and courage.
Encourage and enable employees to work through their own conflicts
Start by modeling the values and behaviors you want your team members to adopt. If you want to “do conflict” in a healthy way, this includes:
- Honesty, transparency, and vulnerability
- Empathy, humility, and grace
- Being direct but kind, respectful, and constructive in your feedback
- Soliciting, receiving, and acting on critical feedback about your own performance without being defensive
- Awareness of and sensitivity to power dynamics, privilege, social inequities, cultural differences, and other contextual factors affecting relationships
See conflicts through to resolution with everyone involved present. Confronting problems in a group context may include such things as:
- Processing setbacks and disappointments together as a team and letting people vent, as necessary
- Acknowledging the elephant in the room and coaxing it into the light—even if the elephant is you!
- Encouraging everyone to share what’s really on their minds and hearts when it comes to planning decisions or reflecting on team performance
- Resolving misunderstandings and facilitating disputes between team members in real time
- Obtaining outside help if you encounter problems you don’t feel equipped to handle yourself
Why is conflict resolution so important in terms of company culture? Because clearing the workplace of interpersonal friction and psychic interference builds safety and trust. Plus, working through team conflicts together deepens bonds, and the effect can be energizing.
If you can get to the point where employees feel free to express their own opinions, challenge each other’s assumptions, and engage in passionate debate—without fear of damaging relationships—they’ll come up with the best ideas, deliver their best work, and collaborate most effectively.
Beware, though: not everyone has the strength, self-awareness, or emotional maturity to withstand even gentle conflict. If resolving conflict directly is one of your core values, they may not be a good fit for your culture.
Clearing the workplace of interpersonal friction and psychic interference helps build safety and trust. Plus, working through team conflicts together deepens bonds, and the effect can be energizing.
4. Understand employees’ career goals and what motivates them.
Align their professional growth with the company’s evolving needs
Over the years, I’ve seen lots of hand wringing around how to keep promising young employees from leaving as well as reluctance to hire them in the first place for fear they’ll bounce in just a year or two. I’ve also seen managers throw tens of thousands of dollars at junior employees with one foot out the door, just to buy an extra year or two of their time. On rare occasion, this may make sense. But, it’s usually unnecessary, if you manage your team effectively in the first place.
Accept that your best and brightest may not stay with you forever. This is especially true if they’re young and ambitious. That’s OK. If you can align their talents and ambition with the business’s needs, enable and empower them to drive business value, pace raises and promotions appropriately, and manage their expectations as you go, you can stretch one or two years into three or four, and three or four into five, six, seven, or more.
Accept that your best and brightest may not stay with you forever. But if the company continues to grow, the employee does their part, and you do yours, they may ultimately conclude their best future is, indeed, with you.
Take the lead on career development planning
Start by finding out key hires’ career goals and what really motivates them. Encourage a sense of ownership in a shared future, and map out a career path that syncs up with your company’s vision for growth. Dream big together, but be real about what it will take to get there. Visualize the ways they could—with your help—use their proven strengths and yet-to-be-realized potential to grow the business, while also gaining experience essential to getting where they want to go professionally.
Discuss how you’re willing to invest in them to accomplish your mutual goals:
- Coaching, mentoring, training
- Particular projects, roles, or assignments of interest to them
- Potential advancement opportunities, though, without any guarantees
See what resonates most, and set their yearly goals accordingly. Build in checkpoints and guardrails, as necessary. Learn from them, and supplement their energy and raw talent with your wisdom and experience. Coach them up toward ever-greater autonomy.
If the company continues to grow, the employee does their part, and you do yours, they may ultimately conclude their best future is, indeed, with you. At the very least, you’ll be less likely to lose key talent prematurely because they can’t imagine ever achieving their career goals working for your company.
You’re so focused on the big prize, you won’t rest until you get there. But, over 99.9% of everything we do on a daily basis qualifies as “journey” vs. “destination,” so don’t withhold until tomorrow what you can easily enjoy today.
5. Take time to recognize individual accomplishments and give meaningful rewards.
Understand each employee’s contribution, and express genuine appreciation for their work
As a driven, ambitious leader of your own growing company, it’s easy to overlook small milestones and accomplishments, because you’re so focused on the big prize, you won’t rest until you get there. But, over 99.9% of everything we do on a daily basis qualifies as “journey” vs. “destination,” so don’t withhold until tomorrow what you can easily enjoy today.
Specifically, don’t squander the opportunity to engage with your employees by acknowledging their efforts and accomplishments on a regular basis. Research says that employees who feel valued are more motivated and engaged, which translates into increased performance and productivity. Sometimes even just a few sincere words of encouragement or a simple “thank you” can have a profound effect on an employee’s confidence, development, and morale, especially for junior team members. If you do this consistently and equitably across an entire organization, the multiplier effect can be exponential.
Words of affirmation and gratitude are not a substitute for adequate pay, but they do let employees know you notice and care. Start by taking a few extra minutes each day or week to check in with one employee you typically don’t spend much time with. Learn more about them, and find out what they’re working on. Focus on making a human connection first. Otherwise, they may feel you’re “hovering over their shoulder,” which nobody likes. Be respectful of their time and sensitive to their social cues. If you’re genuinely curious, thoughtful, and engaging in your interactions, they may spark meaningful personal connections and discoveries as well as business insights, ideas, and opportunities. They may even lead to strategic and mutually rewarding mentoring relationships.
Sometimes even just a few sincere words of encouragement or a simple “thank you” can have a profound effect on an employee’s confidence, development, and morale. Across an entire organization, the multiplier effect can be exponential.
Recognize growth as much as results, and personalize rewards for individual employees
Of course, what you choose to recognize and how you do it is even more important than the recognition itself. Make sure the behaviors you praise and encourage reflect core values and align with your stated vision, mission, and goals. Instead of focusing primarily on business results, which is more of an annual review perspective, recognize employees throughout the year for instrumental growth or exemplary behavior such as taking initiative to solve a longstanding problem, going the extra mile to help a customer, or learning a critical new skill.
What you choose to recognize and how you do it is even more important than the recognition itself. Make sure the behaviors you praise reflect core values and align with your stated vision, mission, and goals.
Rewards work best when they’re unexpected and personalized for the individual, based on what you know they value most. You don’t have to spend a lot of money for the reward to be meaningful. Thoughtfulness counts. For example, you might grant an unexpected day off to an employee who’s worked extra hard to meet a deadline, or buy a working parent theater tickets and arrange for childcare, so they can enjoy a rare evening out with their spouse or significant other. There’s endless room for creativity here. Make sure to clearly communicate why they’re receiving the reward and, as appropriate, reinforce the connections between the behavior you’re rewarding and the company’s higher purpose.
Building a great culture takes time, and it’s a team effort. But, a strong change agent, especially at the top, can make a significant difference quickly. Given today’s tight job market, the sooner you start the better. The good news is even small “wins” or movement in the right direction can stave off key departures, encourage employee referrals, and create a more welcoming vibe for interviewing candidates.
Building a great culture takes time, but, even small “wins” or movement in the right direction can stave off key departures, encourage employee referrals, and create a more welcoming vibe for interviewing candidates.
Of course, none of these changes is guaranteed to work for you. As a leader, the change starts with you. Are you willing to go first and model the values, behaviors, and practices you want your whole company to embrace? Are you willing to risk “being the change you want to see” in your own business? Do you have the fortitude, bandwidth, resources, and skills to sustain cultural change long term, or can you find someone trustworthy to help do it for you? Do you even want change? Really?
I’d bet, for most of you, the answer to all these questions is “yes,” though not without reservations. While reluctance to change is normal, the consequences of not changing can be devastating. Fortunately, you don’t have to be perfect in your cultural improvement efforts, because your employees will be far more forgiving of your shortcomings and mistakes if you give them a real ownership stake in shaping their own work environment. Let your team help you create the kind of culture they want to work in, and they’ll work hard to create the business results you’ve always wanted.