September 25, 2012 5:30 AM

Creating a thriving business is about more than strategy and finances, business plans and spreadsheets. In most cases, success depends on a blend of hard and soft skills: a mix of solid business savvy with good interpersonal relations. Good corporate culture is difficult to simply implement, but is regularly one of the defining characteristics of what sets apart the best and most profitable ventures from the rest. Particularly for start-ups, establishing a positive workplace culture is essential. Happy, valued employees can often do more for the bottom line than all the business school lectures combined.

It can be difficult to calculate a formula for how to create strong culture, since so much depends on the nuances of the business at issue. In nearly all cases, though, success is reached when employees feel valued; when they actually like coming to the office; and when they believe in the work of the company and their role in its success. “Even in this unprecedented business environment, great leaders know they should invest in their people,” Deidre Campbell, a managing director at Burson-Marsteller’s Corporate Practice, told the Harvard Business Review blog. “Those companies who are committed to a strong workplace culture tend to perform well,” she said, while those that do not must often fight much harder.

Corporate culture is separate from corporate identity. A company can have a stellar product or service but still find itself lacking when it comes to employee satisfaction. Such was the case at Gibson guitar company, an iconic employer in Nashville, Tennessee. Though seen by many as an epitome of Americana, the company ranked near last in an employee satisfaction report released by online job site GlassDoor.com. “In employee reviews entitled ‘As Bad As You've Heard,’ ‘What a waste of good people,’ and ‘Get your Prozac ready,’ employees describe the corporate culture of Gibson as ‘The Worst Ever,’ and complain about the company's turnover rate,” a GearWire article reported. All of this was despite the company’s general brand popularity and employee perks like casual dress, “fun”-themed workspaces, and free snacks.

Much of the problem, as disgruntled employees were not shy about conveying, was rooted in interactions between superiors and lower-level workers. Executives simply had no interest in their staff as workers, much less as individuals, many reported. The fun-loving culture was largely superficial, and did not factor into the day-to-day interactions on the sales floor, in the back offices, or anywhere in between.

Gibson’s example shows that culture is more about core values than outward appearances. At online shoe retailer Zappos.com, for instance, employees typically have low-end salaries and receive few perks outside of health insurance—yet they rank as among the happiest in the nation. Much of this has to do with how the CEO, Tony Hsieh, envisions employee morale. “What he really cares about is making Zappos's employees and customers feel really, really good,” Inc. magazine said in a corporate profile piece. “This is not because Hsieh is a nice guy (though he is a very nice guy), but because he has decided that his entire business revolves around one thing: happiness. Everything at Zappos serves that single end,” the article said. “Other business innovators work with software code or circuit boards or molecular formulas. Hsieh prefers to work with something altogether more complex and volatile: human beings themselves.”

Paying attention to employees and creating an atmosphere where they can not only have fun but also feel like a part of the team is usually what sets the Gibsons apart from the Zappos. While breaking away from traditional ideas about corporate culture—with their emphasis on working hours, perks, and overall productivity—can be hard to visualize at first, success is usually just a matter of goal-setting and follow-through.

According to Seattle entrepreneur Greg Gottesman, communication and a shared vision are two of the most important secrets. “In great start-up cultures, everybody is giving everybody else credit. Ideas are judged on the merits, not on who came up with them,” Gottesman told the Puget Sound Business Journal. “People feel comfortable that they will get their due. In not-so-great start-up cultures, everyone wants to make sure everybody else knows what he or she did, even if he or she didn’t do it.”

Encouraging innovation and the open sharing of ideas may also be a good way to promote happiness and teamwork. “Innovation is a key corporate and national strategy. Everyone talks about innovation—but how many companies have a culture and structure encouraging innovation?” Forbes magazine asked in a recent article. “Innovation is our destiny and must be part of a corporate culture,” the article said, but cautioned that this does not always come easily. Leaders must be open, willing to manage failure, and quick to forgive. At the end of the day, the results are often staggering—employees feel like their ideas matter, they are unafraid of stepping outside of the lines, and everyone benefits.

Designing corporate culture is never easy, especially in the uncharted waters of a new start-up venture. Striking the right balance sometimes takes practice. Experts unanimously encourage CEOs and executives to take early risks, though. In any business, large or small, success or failure is ultimately at the hands of employees. A culture of positivity and encouragement tends to go a lot farther and faster than one that is focused solely on production or revenue.

Blogger Profile: Julianna Davies
Julianna Davies is a freelance writer who has ended up at the intersection of business, education and technology - a place she never thought she would be but finds she really enjoys. If you ever have a question about a post, feel free to drop her a line! You can read more from Julianna at http://www.mbaonline.com

Posted by Sue Ansell at September 25, 2012 5:30 AM

Categories: Technology start-ups

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