How to Create a Strong Company Culture

If there’s one thing entrepreneurs need to focus on during the life cycle of their business it’s creating, developing, and maintaining a strong company culture. I can’t begin to tell you how important company culture is to a business. It’s the “vibe” of your business, and it starts with you. You need to be vigilant about maintaining the integrity of your company culture. Surround yourself with people who believe in your vision and have the proper tool set to help live your dream.

However, it’s not easy to build a strong culture. You need to first take a step back and figure out what you want your company to look like and how you want it to be perceived to your customers and to the public. Remember, perception is reality – and that starts with culture.

I find it remarkable that when I speak to my consulting clients about their business, they want to focus on revenue and profit. Rarely do they inquire about having me help them with their company culture. But I can tell you from first-hand experience that setting the right culture and tone is the most important thing you can do when starting and growing your business.

Whether you’re starting your own business or buying an existing business, you have the opportunity to create your own team. When buying an existing business, you have the opportunity of cherry picking current employees on the roster, people who will move forward with you and your business. When starting anew, you have the ability to build your team from scratch. Here are some tips I learned along the way.

Building your team

Hopefully, you’ll come to a point early in your business cycle where you’ll need to build out your team. I recommend you start prospecting, interviewing, and hiring your team as soon as you realize you can’t manage the business by yourself. Many of my clients wait too long, and they end up quickly hiring someone just to fill a position. Entrepreneurs need to have the foresight to start interviewing candidates before the need arises. Here’s the process I recommend:

  1. Start getting your feelers out there. Talk to friends, family, and business associates, asking them for recommendations. Place ads on local job boards with your requirements
  2. Be specific as to what you are looking for in an employee.
  3. Personally interview prospective employees. Take your time during the interview process. Try to get a feel for their skillset, along with their personal interactions. To me, having the right experience is important, but sometimes the intangibles are more important. I look for honesty, loyalty, and commitment. I want someone who has good personal and family values. I try to look inside their soul and make sure I’m hiring a good person with a high level of integrity.
  4. You must like the person you’re interviewing. I know it’s hard to interview someone and get a feel for who they really are. But listen to your gut. The bottom line is that your employees will be spending more time with you day-to-day than your family. You have to like the person you’re hiring. I always ask myself during the interview process whether I would enjoy having a beer or a cup of coffee with the person I’m interviewing. If I answer yes, then there’s a good chance I would hire that person.
  5. Sometimes a potential quality employee is hard to pass up, even if you don’t have a current position available. There were numerous times I interviewed someone I really liked, but I didn’t have a position for them. Good employees are hard to come by. If you interview a potential superstar employee, hire that person, regardless if there’s a position available. Chances are, you’ll find the right position in your company for your superstar employee in due time.

Compensation plan

When it comes to paying your employees, pay them fair market value based on the position. The comp plan that was successful for me was paying my employees a salary plus commission plus bonus. The salary was a bit below market value, but the commission compensated for the lower salary. My strategy to pay salary plus commission was based on the fact that I wanted my employees to have skin in the game. The more successful the business was (based on sales), the more my employees would make. I also wanted employees to feel that they were part of the success and would be compensated for helping to grow the company. By the same token, if you take a portion of their salary and convert it to commission, and the business experiences an economic downturn or business is down, you aren’t obligated to pay higher salaries. You’re only on the hook for the salary you guaranteed.

Bonuses are based on outperformance. We worked off budgets and forecasts. If we outperformed our budget in excess of ten percent then my employees were eligible for a bonus. The more money the business owners make, the more money their employees should make.

Career advancement

The first thing I told my employees once they were hired is that I have a commitment to them as my employee. I told them it was my responsibility as their leader to make sure they were better off financially, emotionally, and professionally a year from the day they started working for me. I backed that up by having a philosophy of promoting from within. Whenever there was an open position, it was always first open to internal employees before I looked outside the company. This practice created a real opportunity for employees’ career growth and gave them the ability to make more money. This practice is a benefit to any business owner, because it promotes career growth and decreases turnover. And let’s face it, turnover and training are very expensive. Having long-term employees is a good recipe for consistency in a company.

Mentoring and training

It’s your responsibility as the business owner to mentor your employees. You want to set them up for success, and there are a few ways to accomplish that goal. Push them as hard as you can but know their limits. Continue to train them and take their input about the business seriously. Offer training in other areas of your company, so they can be cross-trained in different aspects of the business.

As the owner, have an open-door policy. Make your office a safe place to come if they want to discuss an issue. However, realize that there’s a hierarchy in your business. Don’t step on any of your managers’ toes. Never talk salary increases with employees who aren’t your direct reports. Leave it up to your managers to make salary decisions. Build rapport with all of your employees. It’s imperative that you have a good pulse of your company and you do everything in your power not to be blindsided.

Lead by example. Never put yourself in any compromising position that can do harm to your company. Always remember, you might love your employees but know that, under any circumstance, you love your company more. Never let employees think they are bigger than your company. When they do, it causes trouble. Don’t be shy – let them know this attitude isn’t acceptable.

Company spirit

You must be the biggest cheerleader for your company. Praise your employees when warranted as well as holding your employees accountable. Be vigilant about employee performance reviews. You never want to blindside employees. They should know where they stand in regard to their job performance. Keep in mind that you need to provide a comfortable work environment and, by the same token, make sure they’re enjoying what they’re doing. Build camaraderie. Once a year host a company-sponsored event that promotes team building. If everyone works as a team, you’ll be successful.

These are just some of the tips I recommend to help build a great company culture. Remember, a great culture leads to a great company.

Discover more business tips in my new book, High Risk, High Reward. Download a free chapter here.