Since the beginning of the pandemic, countries around the world have seen a small business boom. As an example, Australia had 34% more small business registrations in 2021 compared to 2019. Small business leaders and employees must successfully navigate many changes to succeed.
However, it’s no secret that change can affect employee culture and engagement. This was further confirmed by recent Culture Amp research comparing employees from companies undergoing major changes such as layoffs or mergers and acquisitions to benchmark companies that were not undergoing changes.
When examining employee survey scores, 71% of employees were motivated compared to only 65% of employees when experiencing change in their organisation. Changes and subsequent employee reactions to change can have a big impact on company culture.
According to organisational psychology, a business’ culture consists of the beliefs, assumptions, and ways of interacting that characterise the social and psychological environment. In other words, a business’ culture can be obvious when observing how employees within your company interact with each other.
According to research, small businesses have cultural advantages in leadership, autonomy, and work flexibility compared to large businesses. For example, in companies with fewer than 100 employees, leadership survey scores are 9% higher than companies with more than 5000 employees.
Without planning and the right tools, it is difficult to intentionally shape organizational culture. Culture matters when it comes to running a business of any size.
According to a foundational longitudinal study by John Kotter, businesses that focus on culture for five years see an average of 85% net profit increase.
For small businesses, fostering a positive culture can be the difference between success and failure. Here are three recommendations to help small businesses maintain culture during times of change.
Emphasise the importance of people for success
To take action on this recommendation, focus on recognising employee strengths and accomplishments. A simple compliment or announcement of praise at a company meeting can go a long way in helping employees feel important. Here are some additional ideas for recognising employees. Employees must feel fairly compensated for recognition to be effective. Otherwise, employees feel that it’s all just words but no action.
Clarify work as much as possible
One easy way for small business owners to remove ambiguity is to review job descriptions and expectations. For example, a local group of veterinary offices was struggling with coordinating patient information and they created a new position of patient advocate to bridge the gap between medical and administration. However the position did not initially resolve the disconnect because there was no clear job description. After assessing the role responsibilities and ways of working, we wrote a job description that clarified the role. This is just one example, but there are many sources of ambiguity and confusion during times of change. Working with employees to identify and address points of confusion will help your small business keep up with constant changes and growing roles.
Openly acknowledge challenges
Small businesses face many challenges and difficult circumstances. Being transparent about challenges builds trust and enables employees to work as a team to address the roadblocks. While it is important to be transparent about challenges, it is important not to undermine employee confidence in the company. According to Culture Amp research, company confidence is one of the top 5 drivers of employee engagement. Support company confidence with a strong vision as well as making sure employees have tools and processes to overcome the presented challenges.
Embrace agility with lightweight systems and processes
Engage in employee listening by surveying and asking employees for input when making difficult decisions. Surveys should assess employees’ engagement, work culture, as well as current topics. In a case study, a small coffee business conducted an emergency response survey through culture amp to discover means of supporting employees during a critical time of change. In response to the survey, quick changes were made to employees’ perks and additional check-ins were scheduled to support employee needs during a difficult time.
The day-to-day interactions that comprise the culture within a small business can also impact employee engagement. In a small business, every touch point from a job description to a casual conversation between team members can impact company culture and therefore impact a business’ bottom line.