How to build a company culture during a recession and why it's the best time to do it
During times of economic crisis, the stakes are higher for businesses. There’s less room to make mistakes and it’s more difficult to leverage growth opportunities. Considering 94% of executives and 88% of employees see company culture as vital to success, is now the time to develop a strong company culture?
The economic situation in most countries is unstable to say the least. Statistics show that in December 2022 alone, the UK economy shrank by 0.5% while inflation and the cost of living has risen by 8.8% in the last 12 months.
It’s undeniable that businesses face a real challenge when it comes to operating in such an environment. While cost-cutting measures such as reducing the workforce makes a short-term impact, for businesses to survive a volatile economic situation they need a long-term solution. Many businesses have found a path towards growth in times of uncertainty by building a strong company culture because it makes a company more resilient.
So, how can a strong company culture save a business during a recession?
Why build a company culture during a recession
Gartner defines a company or organisational culture as “the unwritten code of conduct made up of core values, cherished beliefs and priorities”. This consistent set of standards keeps the company working together on set goals.
Unity is even more important during a recession because of the stress employees are under colliding with the demands the business faces. Inflation means employees are at risk of disengagement as they struggle to cover rising fuel, utilities and food prices. The same could be said of consumers, meaning they are more reluctant to buy from the business. The business needs to be able to cover its costs while meeting consumer and employee needs. Employees may also worry about job instability as in the 2008 recession 1 in 7 employees lost their jobs. A lack of trust could disintegrate the productivity and performance of the business putting it in an even more dire situation.
Benefits for employee engagement
Creating a company culture can mitigate these fears by building transparency, collaboration and support. With a consistent culture bringing everyone together, communication is more fluid as all departments work seamlessly to fulfil the company's goals. Such focus and collaboration make it easier for the workforce to identify problems and areas of improvement early on, avoiding disruption when possible through consistent innovation. Creating a company culture improves the employee experience because their role is meaningful and their voice is valued. Therefore, hiring and retaining the necessary talent is easier, proven by research that found employees rate their company’s qualities 20% higher when it exhibits a strong culture.
Benefits for business development
Company culture creates a competitive advantage and builds resilience through embedded collaboration, innovation and unification of the workforce. As there is a single mission the whole company is working towards and consistent values, the brand identity is clear and the business can build a stronger reputation for what they want to be known for. This will attract and retain loyal customers, particularly because there is consistency throughout the customer’s experience with the company creating a sense of reliability.
With the benefits of building a strong company culture during a recession apparent, where do you start?
How to build a company culture
Building a company culture is not an overnight change. It is a collaborative and continuous process that needs to be regularly checked for effectiveness. The initial actions can be broken down into 6 steps.
1 - Create an employee feedback loop
Employees are at the core of creating and implementing a strong company culture because it affects everyone involved in the business and therefore needs everyone’s backing to be successful. All employees in the workforce should be able to contribute their thoughts about the brand’s values, beliefs and priorities. Just as the building of the company culture is continuous, so is the process of collecting employee feedback and maintaining their full support.
2 - Define values, beliefs and priorities
Once discussions have been had about the company culture the employees would stand behind and what the business leaders want to be known for, the company culture should be clearly defined and widely shared. This ensures everyone knows how the business operates and what it is working towards and are reminded of it regularly.
3 - Set aligned goals
A key part of ensuring the company culture is properly implemented is setting goals according to the values, beliefs and priorities of the brand. The main goal and the KPIs should all work towards the overall mission of the company. For example, if customer centricity is part of the company culture, tracking customer satisfaction would be essential.
4 - Introduce new initiatives
Another way to ensure the complete implementation of the company culture is to introduce new initiatives aligned with the company’s values, beliefs and priorities. Continuing with the example of a customer-centric culture, introducing a rewards system for employees who hit customer-centric KPIs would encourage uptake. Other relevant initiatives include wellbeing, upskilling and innovation campaigns.
5 - Implement using a top-down approach
The company culture overrides the barriers of different levels of seniority. In fact, demonstrating the company culture from the top down can improve uptake. For example, new hires should be chosen according to the company culture and managerial decisions should be made in alignment with the values, beliefs and priorities.
6 - Find supportive digital tools
In this digital age, it’s very likely that there will be digital tools that support the implementation of the new company culture such as collecting data and drawing conclusions about the progress of its application. There are digital tools that can collect and analyse customer feedback, supporting a customer-centric company culture. Digital transformation complements company culture innovation.
Building a strong company culture has been an effective business strategy for enterprises in the past. With the current recession increasing the pressure on businesses and employees, now is the perfect opportunity to develop and implement values, beliefs and priorities that unite the whole workforce. Throughout the development and implementation process, a feedback loop should be maintained with the whole workforce to ensure widespread backing which is the only way a strong company culture will be built. Does your company culture support your current business growth?