Why companies need to work on creating positive cultures from start-up stage

Recently it’s been tough to differentiate news about Uber as a tech start up from news about Uber’s working environment Although it is still rated the highest-ever value start-up, it’s difficult to believe that the company is attracting the kind of talent it wants, or further investment.

Their negative culture has potentially eclipsed their positive product.

When you think of other big businesses that have failed, or whose reputations have suffered over the past few years, like Sports Direct or Enron, the discussion about where they went wrong or why they failed invariably involves not only poor investments and/or irregular businesses practices, but also what was wrong with the internal workings of these organisations, e.g. values they were lacking, or that they didn’t prioritise taking care of their employees.  In other words, these companies failed, or have suffered significant reputational damage, because of very poor cultures.

This really highlights the importance of actively working to establish a positive culture from the get-go.  Culture is as integral a part of a business as having a growth strategy and implementing financial planning.  Getting it wrong impacts your chance of success.  Ignore it completely and you may as well pack up and go home.

But what does establishing a positive culture really mean?

Historically it has meant companies defining their values, but a simple web page listing them isn’t enough anymore.  In today’s information-rich world, where everyone can so easily learn about anything, that means your values need to be real and accessible and lived.  Think of Pepsi’s much reviled advert starring Kendal Jennerthere are a plethora of articles detailing what was wrong with the ad, but in a nutshell it simply felt inauthentic like it trivialised serious social issues, definitely not the values they wanted to espouse.

Whilst Pepsi has a strong brand, and from their overall success, has a culture that delivers results the backlash from that advert emphasises how important it is for a company’s values to feel real, accessible, and lived, and the damage that can be done when they ring false.

Besides connecting with customers and staying out of the press for all the wrong reasons, there are sound business reasons as to why it is important to establish a positive work culture from the very beginning:

  • A positive culture helps you attract the best talent

Although the quality of products and services that businesses provide are important, it is really the people that deliver them that are going to mean the difference between success and failure.  That means that companies consistently need to attract the best people possible, and recruitment isn’t a walk in the park.  Not only does it encompass advertising for roles and the logistics of setting up interviews, it is a dynamic two-way conversation between a company and an individual, who will come with information about that company gleaned from their own research and impressions.  These can be informed by a wide range of factors including colleagues in the industry, social media, and of course, a company’s wider reputation.

To make sure you are attracting the talent you want to be working with, it pays to make sure you are developing a positive reputation.

  • A positive culture saves time and money

When it comes to running a company, employees are one of the greatest expenses, both in terms of money invested and time spent and the costs of someone not working out are more than just financial.

Establishing a culture that clearly sets out a direction and processes for people, creates an environment where everyone can be their best selves.  In this type of environment people are able to form ideas that support the vision of a company, rather than ones that get bogged down in projects that would be nice to do, but don’t go anywhere.

Consistently being unable to deliver ideas leads to frustration amongst employees and costs companies money.  When employees are empowered to do work that satisfies them that also supports the overall direction of a company that is a win-win situation.

It is worth putting in focused time and energy upfront to think what you need to do to establish this type of environment.  It will save time and money in the long run because people will be less likely to move on.

  • A positive culture means positive partnerships

It is a competitive and intense marketplace.  Everyone wants more for their money.  One way companies are delivering more is by partnering up to launch and deliver projects.  This is great strategy for companies that want to do something innovative with less risk, and these collaborations also offer employees the chance to work on an exciting project outside of their traditional remit.  Again, a win-win situation.

When it is done right, these types of partnerships can be extremely effective.  Take the collaboration between The Cambridge Satchel Company and Brompton.  One makes bags and one makes bikes, and together they created a sleek leather bike satchel that fits perfectly on Brompton front carriers.  This partnership works so well because both The Cambridge Satchel Company and Brompton have a strong commitment to manufacturing in Britain, quality design and fun.  Their values and culture are a natural mesh.

If you get partnerships or mergers wrong, the negative impact can be far reaching.  Huge mergers have been abandoned because the internal culture of companies were so drastically different people were prevented from doing their best work.  That means productivity and profitably suffer – the merger of car giants Daimler and Chrysler is a good example.  Once heralded as a ‘merger of equals’ it didn’t take long before it was described as a ‘fiasco.’  Knowing which values you prioritise within your own organisation helps you evaluate what you are looking for in a collaborative partner.

  • A stable, positive culture attracts investment

When Uber started to attract attention because of negative practices, two of their investors wrote an open letter explaining why they felt it was important for them, as financial backers, to clearly state that the allegations about the working culture at Uber made them uncomfortable and needed to be addressed urgently.  In today’s landscape, where personal blogs, social media platform and sites like Glass Door make it easy to find out what employees really think about a company, it is silly to think that investors aren’t’t doing this research.  Indeed, experts advise understanding a company’s values as an important part of weighing investment opportunities.  If investors find a significant amount of a young company’s workforce isn’t happy with working practices there, or that leadership isn’t able to articulate what is good about their company’s culture, that’s not going to be a point for the ‘pro’ column.

  • A positive culture means people do better work

As humans, we are wired to want to spend time where we feel inspired and energised, and outside of work, that’s typically what we do.  At work, this is why the question, ‘What did you get up to at the weekend?’ can be so illuminating.  By really listening to the answer, we can learn what our colleagues are inspired by.

But why shouldn’t we feel inspired and energised by our working lives?  By creating a positive culture where people can be their best selves and do their best work, we are benefiting everyone, because people who feel good, do good work.

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