Governance

Why a calm business culture is important to be profitable?

Strong companies have strong cultures, each infused with their unique individualistic flavour. Cultural behavior is a fundamental aspect that aides a company to grow, sustain and win in the long run. Thus, building a conducive culture within the halls of an office can ensure increased benefits. 

Much is written about ‘corporate culture’, encompassing everything from the way managers treat their employees to how staff behave towards each other and customers, as well as a host of company customs and practices. Corporate culture is about the way a business thinks, feels and acts. Almost all commentaries on the subject look at corporate culture in large companies; yet it is often much more relevant to SMEs, which are small enough for one dominant person’s behaviour, or a single department’s ingrained outlook, to affect the whole business.

When asked about their corporate culture, many SME owners are inclined to reply ‘er…I don’t think we really have one’. They do, of course. They just haven’t consciously thought about it.  The positive or negative aspects of that culture can determine whether their company succeeds or dies. Below are five cultural issues that affect all SMEs.

Stay entrepreneurial: This seems obvious. All SMEs should be entrepreneurial by default. But many fall into complacency, getting stuck in a rut because customers seem satisfied and profits are high. They, then, lose the imagination and agility that are the greatest assets of an SME. Within a quick span of time they lose customers to faster-thinking rivals and are too late to branch out into new lines of business. Every member of staff should be encouraged to think like an entrepreneur, always alert for new ideas. And their inspiration should come from following the example of those at the top.

Keep everyone in the know: Give as much relevant information as possible to your staff and your customers about what your business is doing, how and why. And seek their opinions and suggestions; they might even be good ones.  Hold regular staff meetings. Almost everyone whom you treat in this way will like you for it and respond positively. If transparency and openness are part of your company’s way of life, staff will stay motivated and you will retain customers.

Incentivise staff effectively: To understand how large a problem this can be for SMEs, consider all the things that they cannot offer, compared to a large company. These include the kudos that comes from working for a well known brand; the advantage for their career of having a blue chip employer on their CV; and the possibility of internal moves where they will be working in a quite different environment, perhaps in an exciting position in another country. To compensate, SMEs should use the flexibility that they have to give employees as much control, freedom and variety as possible. That’s probably what they joined an SME for in the first place. And keep an eye on what large companies are paying their staff, or expect to lose yours.

Get the hiring right: Unlike big-name companies, SMEs tend not to receive industrial quantities of CVs from the best and brightest graduates and other candidates. No need to take this personally; it’s because they’ve heard of Microsoft, but not of your company. So SMEs need to have an especially proactive hiring culture. This can include giving bonuses to staff who introduce a talented employee, scouring LinkedIn for likely candidates, and contacting universities. And know how to ‘sell’ your company in an interview with a prospective employee who may have doubts about working for a business whose name might
draw a blank look from everyone he knows.

Know what your mission is: Not necessarily as in a company ‘mission statement’. These are often bland and formulaic, and staff tend to forget what they even say. But you should be able to articulate in simple terms, to yourself and anyone else, the basic goals that your company has over various timescales. If you do not know what they are, your staff certainly will not. This will affect their performance in many different ways and they may overlook business opportunities, as they have no big picture view of what they are aiming at.

Remember that your company’s culture infuses everything that it does. In business, the adage ‘bad culture drives out good’ is reversed. It is the companies with positive cultures that triumph over those that lack them.

About the author

Mark Fisher

Mark Fisher is vice president, corporate communications, at NASDAQ Dubai. He has worked as a solicitor in Hong Kong and the UK.

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