A recent study found an interesting nuance to company culture and its relation to profits.
Companies that received positive grades from employees regarding culture usually saw long-term increasing profits.
Companies with negative grades may see short-term profits, but profits usually declined over time if the culture continued to be negative.
If you’re growing a SaaS company it’s important to understand how your culture is taking shape. It can have direct results on your organization’s success…even if you have a great, profitable product.
How do you build a strong, positive culture?
Here are 10 essential elements.
At GBW, we work with a number of SaaS companies. We see all kinds of great things. And these 10 are usually found in great SaaS companies.
1. Leadership Matters
Parents often think that children will listen without paying attention to actions.
Heck, that’s probably something most of us assume in every day life.
The truth is that people pay more attention to our actions than they do our voice.
This is very true with business leaders and managers.
Subordinates are watching their managers and executives like hawks. They’re looking for how well the leaders are following procedures, values and more.
Studies show that the leaders have great influence on the culture and success of a company.
So setting your SaaS up with quality leaders and managers will have direct impact on your culture and success.
2. Core Values
Core values are the values that define the company. They’re the things that matter most to the company.
Core values help people understand how to make decisions.
There are no right or wrong core values.
One company may value timeliness and reliability. Let’s say a project is nearing completion. The company may decide to turn it in on time. And perhaps work to refine the project results in the future.
Another company may value absolute quality above all else. They might delay delivery in pursuit of that quality.
Core values is more of a discovery process. It begins with understand the company origins and leadership. What values have the leaders put forth throughout the company’s history?
Discover these, understand them and promote them throughout the company so people know how to make decisions.
3. Clear Mission/Vision
We’ve seen that leadership is very important to success with SaaS culture. Any company culture.
One job of the leaders in the company is to define the mission or vision. Where the company is going. What the employees are working toward.
When you have a place to go you can find the right people to bring on board that buy in to where you’re going.
People like to have a place to go. They like to work toward something. They don’t want to just come in and perform a task. They want to know why. They want to know their role in helping to achieve something.
4. Aligned Incentives
Once you know your values and have a place to go with the company you have to align the incentives.
Incentives drive action. You can tell people what to do, but in the long run incentives will drive decisions and performance.
Let’s say you’re company is selling widgets. You have a vision to sell one billion widgets. Your have the core value to deliver those on time every time to customers.
The incentives at every level of the company should be to achieve one billion in widget sales while also delivering them on time every time.
Incentives to work faster. Incentives for more efficient processes. Incentives to find more customers. Incentives to sell more widgets per customer.
5. Hiring & Employee Advancement
When it comes to hiring the focus should be on finding cultural fit more than experience.
You want talented people, but most companies require training in their own systems and processes anyway. So if you have to train people you want the right people on board at your company.
Those that believe the same things you do. Those that share the same values about life and business.
If timeliness is a core value you will find frustration by hiring someone that, while providing great work, doesn’t do it on schedule.
Also look to build a pipeline of internal people. Great companies build from the ground up. They bring people in at entry level positions and provide a clear path for advancement. They help people advance in life and in a career.
They bring in people at entry level positions that share the values, believe in the mission. Then they train them over the long-term.
Autonomy is something nearly everyone seeks in life. We want to live on our own terms without others butting in and ruling over us.
Obviously in a business there are rules, procedures, systems, etc.
But there needs to be an element of trust between you and your team. You have to trust them to make good decisions.
This starts with good hiring. Looking at core values. Finding people that buy in to your mission.
Know that there will be slip ups. It happens. We’re all human.
Don’t allow those slip ups to lead to too much control over employees. They want autonomy and responsibility.
Consistency is important throughout a business.
We know now that leadership is important. The consistency the leaders show in their actions will affect others.
People appreciate consistency.
Performance, reliability, communication and more.
It also comes in the form of direction of the company. A company that constantly changes procedures or goals or strategies drives employees crazy.
No one wants to live in a world of constant change. Slow change is okay, but people look for consistency in life and in their places of work.
8. Procedures, Systems
We’ve mentioned procedures and systems a few times already. They’re worthy of their own point in this post.
Procedures and systems allow a business to operate efficiently. The best companies look to build them into every aspect of the company.
Building the software, building the team, communicating internally, selling to prospects, communicating externally with customers and more.
Procedures and systems build culture. They allow people to know what to do. But also leave incentive for constant improvement. Your team will discover ways to make systems more efficient and better if they’re allowed to.
People want to be heard. They don’t want to be preached to or talked to. They want to know that those around them, especially leaders, are listening.
Have you ever had a boss that never heard anything you said? Maybe you even had a conversation where you thought they were listening, but the next time you talked with them it was like they didn’t hear anything you said…
That can kill a company culture.
A critical element, especially for leaders, is the ability to listen. To engage with employees. To remember what they say and to make them feel like they can speak, trust and rely.
10. Company First
The final element for success culture is a companywide understanding that the company comes first. Whatever people do is for the betterment of the company.
Everyone has their own personal incentive to improve their lives. But we’re all capable of believing in something bigger than ourselves.
That can include a company.
This can take time to build. It’s essential for the leaders in the company to follow more than anyone. When employees see leaders always making decisions in a company first manner they will follow.
But if that ever changes things can derail fast as everyone will look out for themselves.
The final takeaway from this article is that company culture takes time to build. It’s something to focus on throughout the life of your company, but even if you haven’t done so yet there is plenty of time.
Look to discover your core values. Clarify your company’s mission. Then work on the other elements above with a long-term focus.
Do that and you’ll be setting your SaaS up for long-term success. One that begins with a positive company culture.