5 Ways a Culture of Excellence Boosts Your Bottom Line
Entrepreneur's New Year’s Guide
As you grow your business, it’s easy to focus on results you can sink your teeth into. Materials, products, profits, and revenue…without these you have no business. As a business owner, however, it can be difficult to watch your bottom line flatlining or dropping without a tangible reason. You have the product or service. The inventory of supplies is well-stocked. So what is going on?
One of the leading causes of small business failure is complacency. According to the U.S. Census Bureau, more businesses fail each month than the 543,000 that get off the ground. It is the companies who focus on building a culture of excellence and teams that continuously drive forward that succeed in the long term.
Naiana Miranda, founder of Raise The Bar, a company specializing in helping small businesses build and sustain a culture of excellence explains, “Small businesses that focus on building a culture of excellence at the onset of their businesses see measurable increases in profitability, productivity, and retention. They are consistently evolving and developing to better serve their customers and maximize their value offering.” Through Raise the Bar’s experiential “Culture Shock” training, in which teams come together to redefine what excellence means in their culture, Miranda recognized these critical steps to building a culture of excellence:
1. Create an excellence mindset.
Stanford University defines a culture of excellence as doing the right thing even when no one is watching. Provide high quality service with everyone who engages with the business, regardless of their position in the hierarchy. Also share your vision, mission and values with employees at all levels in order to align their drivers and speak a common language of excellence.
Related: 10 Ways to Build a Winning Culture
2. Lead by example.
Statistics show that fewer than 10% of business leaders exhibit sufficient strategic skills. As a business owner, it is essential to set an example of motivation and professionalism. Avoid losing your cool under pressure, undergo ongoing leadership development as the company figurehead, and be conscious of your actions as an example to your colleagues.
Data compiled by Dan McCarthy the Director of Executive Development programs at the University of New Hampshire showed that a strong leadership team results in employee engagement, product improvement, customer satisfaction and higher profits. Firms with strong leadership programs are one and a half times more likely to land a spot on Fortune’s “Most Admired Companies” list, while organizations with strong leaders are 13 times more likely to outperform the competition on financial performance, quality, employee engagement and customer satisfaction.
Related: 6 Key Tips for Leading by Example
3. Build an effective organizational structure.
When business is, well, busy, functions of operation have a way of becoming hierarchical and compartmentalized. If every employee is tucked away in his or her figurative cubicle, communication is low to nonexistent. Systematize company communications in a way that engages each employee in a positive, unified and clearly communicated final outcome. Clearly define roles and responsibilities required to achieve that outcome, and value each party's contributions equally.
4. Engage and keep communication flowing.
Recognize and reward positive performance, and offer authentic feedback when performance is not appropriate. Maintain high expectations and hold all involved accountable, including yourself.
A study of teamwork and communication performed in the Human Dynamics Laboratory at MIT found that open channels of communication among team members actually improves productivity more than collective team intelligence.
Expectations for performance should be straightforward and simple, with all employees achieving clarity on the ultimate purpose of a project and long term goals of the company. When an employee seems distracted or disengaged, schedule a casual conversation over lunch versus a formal meeting in a conference room. Give them the opportunity to address work, personal or financial problems, and discuss ways to resolve the issues. Being aware of fluctuations in the workplace dynamic, whether with an individual or tensions between two or more employees, can improve overall retention and build a committed and invested team. And always remember to notice and compliment a job well done.
5. Promote a positive and happy environment.
While you might not be able to afford the fitness center or subsidized massages offered by Google, as a small business you can encourage collaboration in other ways. For example, welcome new employees warmly. Hold collaborative discussions in small, informal spaces outside of the office. Encourage employees to eat together or connect beyond project execution.
Company picnics and family events reinforce the culture of positivity and allow both bosses and employees to see that co workers have a family and interests outside of work. Planned activities such as volunteering, bowling or hiking reinforce the teamwork mindset of employees while making them feel appreciated.
By focusing on teamwork and keep the channels of communication open, you'll help to organize operations for a smooth passage to success. Most importantly, building a culture of excellence provides access to growth-oriented solutions that propel a company forward and grow the bottom line.