How to Improve Company Culture: Tools and Methods for Success in SMEs
Building and maintaining a strong company culture is essential for businesses of any size, but for smaller companies it can be particularly impactful. A positive culture helps attract and retain talent, improve engagement and align teams toward common goals. However, shaping culture in a growing business requires deliberate effort and the right tools. Here are some of the most effective methods that smaller companies can use to improve their culture, with examples of businesses that have done it successfully.
Leadership Commitment and Role Modelling
In a small enterprise, leadership plays an outsized role in shaping culture. Leaders set the tone, and their behaviour often has a direct impact on how employees behave and interact with one another. When leaders consistently embody the values and principles they want to see, cultural transformation becomes more authentic and effective.
Take Drift, a conversational marketing platform with under 1,000 employees. Drift’s leadership, particularly co-founders David Cancel and Elias Torres, committed early to creating a culture based on transparency, humility and learning. They regularly share personal stories of failure and growth to create an open environment where employees feel comfortable taking risks and learning from mistakes. This leadership style has cultivated a culture of openness, encouraging innovation and employee development as core values.
Open Communication and Feedback Mechanisms
Open communication is key to any successful culture, especially in smaller companies where feedback can be acted upon quickly. Establishing regular channels for open communication - like employee surveys, direct feedback systems, or frequent team check-ins - helps ensure that cultural issues are addressed early on and employees feel heard.
Buffer, a social media management company with about 85 employees, has embraced radical transparency to create a positive company culture. Buffer makes almost every aspect of its business - ranging from salaries to internal decision-making - public within the company. Additionally, Buffer holds regular “feedback Fridays,” where employees can share candid feedback with leadership. This open communication has fostered a culture of trust, where employees feel their voices are valued and respected.
Recognition and Reward Systems
Recognising and rewarding employees who live the company’s values is an effective way to strengthen culture. By acknowledging employees who demonstrate behaviours that align with the organization’s mission, companies reinforce these values and encourage others to follow suit.
BambooHR, an HR software company with just under 1,000 employees, has built a recognition-driven culture. The company established a peer-recognition program called "Hero Awards," where employees nominate colleagues who exemplify BambooHR’s core values of integrity, quality and ownership. This program has helped foster a sense of camaraderie and mutual respect across the company, making employees feel appreciated and aligning them more closely with the company’s mission.
Purpose-Driven Mission and Values Alignment
Having a clear mission and values that resonate with employees is essential in shaping a strong company culture. In smaller companies, where employees can see the direct impact of their work, a purpose-driven mission can be especially motivating.
Cotopaxi, an outdoor gear and apparel company with fewer than 500 employees, has woven its mission into the fabric of its culture. The company’s slogan, "Gear for Good," reflects its commitment to making a positive impact on the world through sustainable practices and charitable giving. Employees are deeply aligned with the company’s social and environmental mission, contributing to high engagement and a culture of purpose-driven work. Cotopaxi also dedicates 1% of its revenue to fight poverty and support community development, further embedding its values into everyday operations.
Employee Development and Growth Opportunities
Fostering a culture of continuous learning and development is key for smaller companies, where employees often wear multiple hats and need to adapt quickly. Offering professional development programs, mentorship opportunities, or leadership training can help cultivate a sense of loyalty and encourage employees to grow within the company.
Wistia, a video software company with around 150 employees, has built a culture of learning by providing its team with multiple growth opportunities. Wistia invests in its employees through internal mentorship programs and personal development budgets, allowing them to attend conferences, take courses, or work with professional coaches. This focus on development has helped the company retain talent and foster a culture of curiosity and innovation.
Conclusion
For smaller companies, improving company culture is not just about big initiatives, but about the everyday practices that shape how employees work, collaborate and grow. By focusing on leadership commitment, open communication, recognition programs, purpose-driven missions and employee development, companies like Drift, Buffer, BambooHR, Cotopaxi and Wistia have successfully built positive cultures that align with their values and drive business success. These companies demonstrate that even with fewer resources than larger corporations, smaller businesses can create strong, vibrant cultures that not only support employees but also fuel long-term growth and innovation.