A study has shown that CEOs who emphasize culture over other success metrics will thrive. This is a great message at a time when many small businesses are going under. The study focused on publicly-traded corporations, but the results apply equally to small businesses. Here’s why having this type of company culture matters and what you can do to achieve it.
Overview
Companies that have High-Purpose Cultures™ focus on employees and customers. gaping void Culture Design Group, the company that did the survey, says such companies realize:
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• Higher financial returns
• Better customer satisfaction scores
• Increased employee retention
• Greater innovation
• Greater competitive advantage
Your business organization
If your business is not only working to make money, but also to address social and environmental issues, you might want to consider a special type of entity. All of the following are for-profit businesses that adhere to certain standards and have specified goals for a greater benefit.
The first is a public benefit corporation. This is a type of corporation formed under state law (not all states offer this option) and operates for the benefit of employees, owners, and the public. UpCounsel lists the states that allow for the formation of benefit corporations. If you are an existing corporation, you can amend your documents to become a public benefit corporation. You can learn more from Benefit Corporation.
Another option to express to the public your company’s dedication to social and environmental good is to become certified as a B corporation. Not to be confused with a public benefit corporation that is often called a B corporation, the certification is merely a designation just like a fair trade business or being organic. You can learn more from B Labs, the organization that gives the certification. You have to complete a B Impact Assessment, which is free, and then pay annual fees that vary with annual sales.
Yet another option is to be a social enterprise. This type of entity follows a business model set by the Social Enterprise Alliance and is a member of this nonprofit organization. They seek to address unmet basic needs in society.
Your leadership
Even if you don’t touch your existing business organization, as a small business owner you can do a lot to set a high culture for your company. Here are some ideas:
- • Communicate values to your staff and customers. What values to you prize? Honesty? Integrity? Make sure that everyone knows what your values are. Transparency for your values goes a long way.
• Walk the talk. As the head of your business, it’s essential to live the values you espouse. As we’ve seen in the pandemic from too many politicians, it was do as I say and not as I do. This hypocrisy will kill a good company culture.
• Give back. Many small businesses have always given back to their communities, leading United Way fundraising and blood drives. But it’s a growing trend for companies to publicize their good works. For example, some companies now note on their websites that a percentage of sales goes to charity. American Family Insurance lists things to know before donating a percentage of sales.
Final thought
As 2020 comes to a close, it’s helpful to look ahead with a higher purpose in mind. Yes, it’s about survival and profitability. But it’s also about being better, more generous, and more satisfied.
