I can't imagine anyone saying they want to work for an "OK" company. As entrepreneurs, we all want to create a great company that people want to work for. But how?

A Great Place to Work, a global human resources consulting, research, and training firm, has identified and studied effective workplaces for 30 years in more than 40 countries. According to the firm's website, its research "has shown us time and again that investing in a high-trust workplace culture yields distinct, tangible business benefits. Our studies of the 100 Best Companies show that great workplaces enjoy significantly lower turnover and better financial performance than industry peers."

So if a great culture is something everyone wants and it improves overall performance, why are so many companies... not great? I recently asked China Gorman, the CEO of A Great Place to Work (which is the creator of the Fortune 100 Best Companies to Work for and the 50 Best Small and Medium companies lists) about how she addresses these issues--and how her organization advises companies on creating winning environments for their employees.

What makes a company a great place to work?

China Gorman: From our perspective, after years and years of data collection and analysis, it's really clear that regardless of your industry and size of your company, what makes a great place to work is the quality of the relationships that exists within the organization. It's the level of trust between employees and management. An employee's ability to trust senior management is the single most differentiating factor we have seen.

There are two other critical relationships: The relationship of employee to work--are they proud of their work and does it bring meaning to their life? The third is their relationship with their colleagues--do they work together well, do they have each other's back, are they aligned in their motivation, do they work together as a team?

What is the biggest mistake you see leaders make in trying to be great?

CG: They go at it with a programmatic approach. They think if they add free food or a few more perks that they will create a Google or Zappos experience. Really, the most important thing, no matter your size, is the following: Are your leaders seen as approachable? Are they telling the truth? Are they accessible? Do you feel like they see you as a whole person and value your efforts and worth? Perks have nothing to do with it. It's leadership behavior. It takes consistent and intentional effort.

As one CEO on our medium list once told me, "Every night before I leave, the last thing I think about is how to delight my employees, and it's the first thing I think about in the morning." It takes that level of intentionality to create the right workplace culture.

Should culture management be one of the top areas of focus for a CEO?

CG: It's how you think and how you behave--it's authentic, it's pervasive. Zappos CEO Tony Hsieh always says everyone is focused on the culture. If you are changing the culture, it has to be every top-of-the-house's area of focus. It's really about whether your leaders are transparent. Companies on the Best Small and Medium lists, the leaders are astonishingly transparent. Many of them run the business as an open book. Nothing is hidden and they talk openly about threats and setbacks and opportunities. They are regularly available through town halls or video chats. They are authentic. They remember names, they know your families and kids. They make it personal and caring.

What is the biggest advantage great companies have over good ones?

CG: They are resilient. Being a great place to work is not only the right thing to do for your employees, it's a great hedge against regulatory stuff, financial stuff, and social stuff. It binds your employees closer to you and they leave less often for more money or for more opportunity. When you look at financial performance, [great companies] outperform their peers two to three times over consistently. They can act more quickly, they can get their employees to switch directions and innovate more rapidly. Anything you can measure, great workplaces can do it faster and better than not-great workplaces.

What advice would you give to an entrepreneur just starting a business and wanting to make it a great place to work from the get-go?

CG: First off, it's a great time to be an entrepreneur. Part of that is because the era of the great workplace is here. They can learn from others. For example, how do you prioritize the startup stuff with culture stuff with the financial, competitive, and market-research stuff. They can study this on The Great Place to Work website and reach out to the companies on the list and ask them.

That is the other great thing about great places to work--the leaders and employees are happy to share. Focusing on the culture first, making sure you understand the values of the organization, and hiring people that fit those values is critical. Starting with great intentions is a great first step, but the challenge is how you maintain the culture as you are racing to get your product to market, shopping for capital, doubling headcount every six months. It's not just studying what others have done, but staying strong and committed to what you want your cultural norms and behavior to be and modeling it, no matter what.

Published on: Aug 26, 2014
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