Entrepreneurs are playing a dangerous game and run the risk of losing out on investment and growth by neglecting their company culture, according to research from AlbionVC and Fenji & Co
Google arguably started the workplace culture conversation and paved the way for companies to reassess their position, given the tech giant offers everything from free food to cooking classes and on-site gyms to massages. Of course, rising UK startups won’t possess such hefty Google-esque budgets but that doesn’t mean they should disregard the business environment.
Indeed, a study from tech investor AlbionVC and business coach Fenji & Co, which surveyed over 500 founders and employees from the former’s portfolio, found workplace culture can directly affect a company’s success. So what does this mean for entrepreneurs? Lost investment and a poor ability to flourish if it’s neglected, effectively damaging what the researchers referred to as “fitness to scale.”
The results revealed there was a direct correlation between workplace culture and fitness to scale. And those firms with high fitness levels also demonstrated better financial gains, customer acquisition and retention and investment prospects, effectively showcasing that nurturing the work environment can quite literally pay off.
Leaders whose companies underperformed recognised that low levels of employee motivation, care and pride were causes for concern. However, they either weren’t sure how to improve that slump or didn’t make the connection with workplace culture.
In a nutshell, negative workplace attributes were highlighted as founders failing to hire the right talent, little time for recognition or celebrating performance and loss of staff to competition. Comparatively, the positive workplace attributes acting as an antidote to these ailments include solid communication across departments, agile procedures and innovation and a clear strategy to keep workers excited.
Commenting on the research, Ed Lascelles, head of technology at AlbionVC, said: “It’s not hard to find companies with potential. It’s the ability to execute on that promise that defines global category leaders. We like meeting founders who are open to learning about key factors such as leadership, hiring and retention and process: it gives us greater confidence in their fitness to scale.”
While external factors and successes may be the priorities of some companies, entrepreneurs must understand the internal workings of their company and how it’s integral to business accomplishments.