Last Updated on August 15, 2024 by Dave Schoenbeck
The simple fact is that a carefully cultivated culture is one of the most critical components of a small business’s success. Many companies have fantastic business models and brilliant strategic plans, but very few have the combination of a business model, strategic plan, and compelling culture.
When the three are combined, success is almost guaranteed. I remember reading a great quote: “Culture eats strategy for lunch.” I believe this is true, and here are a couple of examples to prove my point.
Tony Hsieh, the founder and CEO of Zappos.com (RIP Tony), was an inspirational leader who understood why culture is essential to small business success. A few years ago, I had the opportunity to visit their e-commerce headquarters in Las Vegas, and it was terrific. Every associate I met was a walking and talking billboard for the company. They spoke of their personal development program, the extended recruiting and orientation program for new people, and their personal belief in the company’s mission. I saw their real-time key performance indicators publicly displayed for all to view. I saw their personally customized workspaces. I saw their learning library. I saw and heard conversations with friendly and helpful customers beyond my expectations. I felt a unique vibe from all I met, which was genuine. Zappos has a great business model and strategy but has a fantastic culture that will propel its small business success for years.
When I graduated from college, I worked for a midwestern regional drugstore retail chain that aspired to become a national powerhouse. The products we sold were widely available from many other retailers, so the points of differentiation were exceptional service, a wider assortment of products, and real estate convenience. Ultimately, our service advantage was the real difference, and it was developed over years of fostering an incredible depth of managerial talent. Our company’s leadership was meticulous in hiring skilled and passionate people and invested in their development through frequent rotation through different functional jobs. Our executives were long-tenured experts who truly cared about their people and investing in the success of the next generation of leaders. There was minimal voluntary turnover because we believed in the company, the leadership, the mission, and the future. This business’s middle and frontline management became powerful emissaries for the style and techniques of satisfying the customer. The culture was pervasive, palpable, and lasted over 60 years. Even today, retired executives stay active in mentoring their younger students; luckily, I am one of them. The customer and associate culture was the difference in our small business success; that experience has permanently shaped me.
Why Culture is so Important to Small Business Success
If you want to develop your small business culture fully, consider this list of ideas:
Hire only people who fit: Understand what the success profile is for your employees. Clearly define their needed skills, capabilities, and, most importantly, their beliefs. Those beliefs should be in concert with your team’s body and will ensure your small business’s success.
Reinforce with cultural touchstones: Develop rituals, events, and processes that consistently reinforce the mission and values of your business culture.
Shared belief alignment: Write out your mission, vision, and rules of the game for your team. Work hard to keep everyone aligned with your desired culture.
Clearly define expectations: Your team will conform to and endorse your cultural expectations if they are clear, well-defined, and frequently reinforced. Small business success revolves around your team understanding what you expect from your culture.
Trust and empower: Empowered employees leverage the power of your culture. Consider your entire team’s power if they treat your clients as you would.
Lead by example: The CEO/Owner is the chief cultural officer. You set the tone and have the best chance to ensure that others follow your lead.
Include everyone: Culture spreads when everyone is informed, involved, and held accountable for driving it forward.
Keep it small: As your business grows, do everything possible to keep your business small. Said another way, remember how impactful and efficient it was to communicate when your team was small. Break down your bigger teams so that you can have one-on-one cultural connections with smaller teams.
I have been fortunate to work for decades in several outstanding businesses with great cultures. I have learned from masterful, influential leaders who understood that their business competitive advantage started with a tenacious devotion to nurturing a culture that lives beyond the physical presence of the founders. A strong culture can hollow out a unique place in the market that creates and drives market share, sales, and profits.
So, at the beginning of this article, I asked, “Why is culture so critical to small business success?”. It is pretty simple. Without a strong culture in your business, you will probably not prosper. That should be a powerful incentive for you to invest in doing whatever you can to redefine and improve your culture today.
If you want to learn more about your critical responsibilities as a business owner, please download my ebook by clicking the tab.
Coach Dave
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I love this. Not only do I love growing a company (especially a small one like mine) but I love envisioning what the culture will look like one day when everyone shows up super fired up behind the mission at hand.
When I was younger I just showed up to work with one goal in mind. Get a paycheck.
I counted the hours until I could leave but I always strived to do a good job because that is how I saw my Mom and Dad work. I never knew what culture was until I owned a business and started to read about other companies. Zappos is a great one and so is Airbnb. That company is AMAZING.
My favorite part about Zappos is that they offer their new hires $2K to not take the job. What an amazing way to weed out the bad eggs from the start.
People might think this is dumb but $2K is pennies compared to what that person could lose the company if they don’t believe in the company or their mission. They could become a cancer internally, ruin moral, create clones of themselves within their department, or even give the wrong attitude to customers.
Totally agree with you here Dave.