The thought of company culture is talked about all the time. We hear about it in lectures from famous entrepreneurs and many business books. When I first started Alumnify, I never really gave the advice about building a culture much thought.

The reason was because I assumed since my startup had less than five employees, there wasn't yet a need to worry about team building. We were figuring out how to get our first customer, and get a product to market. The last thing on my mind as the CEO was company culture. At the time, I believed that when our company had grown to a certain point I would be able to instill all the things I had been ignoring.

In the long run, this thinking caused me many headaches and wasted a ton of my time. This could've been prevented if I instilled a foundation of a company culture from the beginning. I had to go back and remove people from our company who shouldn't have been there from the start. As the leader, I basically had to change all the damaging habits that had become the norm in my company and start from scratch.

To help me do this, I reached out to Business Advisor Tim Farr. Tim is the Director of Midpoint Wealth Management, and specializes in improving company performance. I had the chance to learn from Tim and incorporate his advice into my own company, which helped me build up our culture from ground zero. Here are the 3 main aspects Tim asked me to focus on:

1. Open Communication

One of the hardest things to stay on top off is having open dialogue with your team. Employees become so focused on their work that they forget about communicating with the rest of the team.

We see this all the time with organizations that only have a few members. Because the company is small, they automatically think that communication will be easy. In reality, once you are in charge of certain responsibilities, you start to become tunnel focused. No longer does everyone think about higher level topics like vision and brand, and this causes huge headaches.

To solve this, Tim recommends having regular meetings with the team about company culture. Are you asking your team members how they are doing or do you just talk to them when you need something? What does your team think about the company vision and strategy? While these may appear like "soft" topics, they are what hold companies together through tough waters. Open up the dialogue to others by asking more questions rather than providing answers. It takes a team to build a culture, and it's your job to hear everyone's opinion on this.

2. Focus on your incentives

As business owners, it's easy to think about the punishments we will have to hand out when results aren't met. Firing or demoting is a common threat that employees fear, thus causing them to work harder so they can keep their job. While this is a form of motivation, this is not the right way to get the best results and build a great company.

Instead, pay more attention to the incentives that you're using. If employees aren't getting the results you want, ask them if you're properly incentivizing them. Is your product team missing launches? If so, think about a perk or benefit you can put in for getting the product out on time. Another important thing to remember is to take time to celebrate when your company performs well. This brings the team closer together, and shows what you hold valuable as the leader.

3. Tell it how it is

While you don't want the company to go into panic, you need to wary of being overly optimistic with your team. It's important to have a positive attitude and keep the energy up, but you don't want to start hiding problems. This is especially tough for the CEO, who takes failures the hardest. I remember in the early days I'd always try just relaying the good news to my team and investors. The problem is when things go bad, you end up feeling alone when no one else knows the situation. Worse than that, hiding bad news from your team can cause you to lose their trust. When that happens, the company culture will suffer.

Instead, be upfront but remain optimistic. Tell your team the problems and improvements that need to be made, and they'll appreciate your honesty. When your team knows the score, they can figure out how to get you to the top. If they don't know what's going on, you'll be forced to fend for your company all by yourself.

Published on: Dec 22, 2014