Establishing and maintaining the right company culture is a major key to success in any business these days, especially with the growth of the millennial generation of workers. It has a huge impact on productivity, as well as morale and loyalty to the company. In this age of interactive social media, your culture image quickly spreads to customers, and determines their loyalty.
Everyone knows and admires the leaders, including Google and Zappos, but most entrepreneurs have only a fuzzy idea of what to do to get there. If you are looking for specifics, as well as the science behind it, you should take a look at the classic book, “Trust Factor – The Science of Creating High-Performance Companies,” by Paul J. Zak. He says trust is the key to a good culture.
Zak is the director of the Center for Neuroeconomics Studies at Claremont Graduate University, and he has studied the connection between trust and performance all over the world. Trust causes the brain to release oxytocin, which stimulates productivity and raises motivation.
So, how do you build trust? He cites eight leadership actions, which I also recommend, from a non-scientific perspective, as a mentor to entrepreneurs. Start with these to build the great business culture you need to succeed today:
- Show appreciation for individual contributions. Your team, and every individual, needs regular recognition for their accomplishments. The most effective recognition is a daily “thank you” from leaders, and positive feedback in front of peers. Monetary rewards are nice, but don’t generate the long-term trust and loyalty you need to set the culture.
- Make sure everyone knows what you expect. No team member feels good or performs well when they don’t know what needs to be done. Regular communication, both written and oral, is the place to start. It’s actually important to set high expectations – people like to be stretched, but not broken, for the highest morale and productivity.
- Let team members take control of their work. Employees don’t like to be micro-managed. Make sure the challenge is clear, but let team members do the job in their own way. Always be prepared to mentor and assist, but empowering people to share their expertise and choose how to do projects engenders the culture you need to win.
- Flatten management levels. A recent Gallup survey reported that 81 percent of employees would prefer to manage themselves, if their company created the right culture for it. Multiple levels of management work against this, and are not really needed when team members take more responsibility for their actions, and select their own teammates.
- Share more information about the business. Only 40 percent of employees report that they are well informed about their company’s goals, strategies, and tactics. All the evidence says that openness promotes trust and loyalty, rather than burdening the team. Being open is a two-way street, requiring active listening, inclusion, and responsiveness.
- Practice employee caring and empathy. Actions speak louder than words in building real rather than artificial relationships with the people around you at work. Caring and empathy don’t require tolerating a lack of respect or inability to perform. In fact, just the opposite is true – recognizing problems and doing the right thing are the ultimate caring.
- Invest in employees’ career and personal growth. Leaders who show real interest and commitment to their employees as “whole persons” quickly generate trust and loyalty. Everyone wants feedback on their performance, new career options, and work-life balance guidance. This requires leader effort daily – annual reviews are not the answer.
- Demonstrate honesty and vulnerability. The best entrepreneur leaders today build trusting cultures by being warm, competent, approachable, and relaxed. Everyone knows who is in charge, but the leaders don’t hide an occasional shortcoming, and are openly honest without negative emotions. They favor a “leadership by all” culture.
It’s important to get it right the first time, because repairing and replacing a negative workplace culture is far more time consuming – change is always difficult. Equally important, you need all the productivity and loyalty you can get right up front with a startup. In addition, very few people get a second chance to be trusted.