Why Culture Matters in Business (Hint: It Drives Results)

Imagine a small bakery that started in a garage, fueled by passion and family recipes. Over time, it grew into a thriving chain, celebrated for its consistent quality and customer loyalty. What’s the secret ingredient? Beyond the recipes, it’s the culture—how the team thinks and acts to deliver results.

This isn’t just a feel-good story; it’s a lesson for small business owners and entrepreneurs striving to scale. Company culture is often seen as a big-company concern, but it’s at the heart of every business that grows and thrives. It defines how decisions are made, how employees collaborate, and ultimately, how customers experience your brand.

When we talk about corporate culture, opinions tend to polarize. On one side, some leaders dismiss the idea of culture as "soft" or "touchy-feely," favoring operational efficiency over anything intangible. On the other, proponents of culture advocate passionately but often struggle to quantify its impact on the bottom line. Which camp is right? Based on decades of research and firsthand experience, the answer is clear: Culture drives results—but only when it's intentionally aligned with purpose and strategy.

Why Culture Matters for Entrepreneurs

As a small business owner, you might think of culture as something for Fortune 500 companies to worry about. But the truth is, culture starts with you. It’s in every interaction you have with your team, every decision you make, and every customer touchpoint. Building a strong culture early can save you from costly turnover, misaligned priorities, and disengaged employees down the line.

In a Stanford study involving 243 companies, researchers found that organizations with strong cultures grew at a rate of 42.2%, compared to just 10% for those with weak cultures. This fourfold difference in revenue growth is significant for any business, especially one just starting out.

What Is Company Culture?

Too often, culture is misconstrued as the perks companies offer—nap pods, free kombucha, or Thirsty Thursdays. While these initiatives may boost morale temporarily, they rarely create sustained behavioral change. True culture is not about perks; it’s about beliefs and behaviors.

At its core, culture is "the way people think and act to get results." This definition strips away the ambiguity and gives leaders a framework to evaluate and improve culture systematically.

For small businesses, this means aligning your team’s beliefs and actions with your business goals. For instance, if customer service is your differentiator, your culture must emphasize empathy, responsiveness, and a commitment to excellence.

Use Proven Tools to Intentionally Build Culture

One of the most effective tools my company uses to build and change culture is the Results Pyramid. At its apex are results—things like revenue growth, market share, or customer satisfaction. Below that are the actions employees take to achieve those results. Actions, in turn, are driven by beliefs—what employees fundamentally hold to be true about their work, their leaders, and their organization. Finally, at the base of the pyramid are experiences, which shape those beliefs.

Here’s an example of how we use this tool: During the pandemic, one of our clients introduced an intentional cultural initiative. They examined the beliefs that employees held, many of which were shaped by uncertainty and fear. By creating experiences—clear communication, storytelling, and consistent recognition—they were able to shift beliefs and inspire actions aligned with their strategic goals. The results included a 20% improvement in employee engagement and a significant increase in customer satisfaction metrics.

For a small business, building a healthy company culture might mean hosting regular team meetings to share wins, listening to employee feedback, or celebrating milestones. These experiences shape the beliefs that drive actions and, ultimately, results.

Why Strong Culture Outpaces Strategy Alone

Some skeptics argue that strategy, not culture, is the real driver of results. But strategy without culture is like a car without fuel: It might look great on paper, but it won’t take you far. Conversely, when culture aligns with strategy, it becomes a multiplier for success.

Consider Florida Power & Light (FPL), a client my company worked with to drive transformational change. Their team implemented the Results Pyramid to align beliefs and actions with a new strategic vision. The impact was undeniable. Problems that once took months to solve were resolved in weeks, and collaboration between IT and business teams reached new heights.

For small businesses, the lesson is clear: Your strategy is only as strong as your team’s belief in it. If your employees don’t understand or align with your vision, execution will falter.

Leadership Plays a Critical Role in Culture-Building

Leadership is the linchpin of cultural transformation. As a small business owner, you set the tone. Your actions, communication, and accountability shape the experiences your team has—and by extension, the beliefs they hold.

Middle managers often play a similar role in larger organizations. At Florida Power & Light, culture champions were pivotal in creating a ripple effect of belief and behavior changes across the organization. For smaller teams, think of yourself as the chief culture champion.

How to Measure a Business's Culture

One of the most frequent questions I get is, "How do you measure culture?" It’s a fair challenge. After all, if culture drives results, how do we prove it?

There are methods to isolate and quantify culture’s impact. For one of my company's retail clients, for example, we conducted an A/B test by rolling out a cultural initiative in select stores while leaving others as control groups. Revenue grew significantly faster in the pilot stores, demonstrating the return on investment of intentional cultural alignment.

For small businesses, measurement might look like tracking employee retention rates, customer satisfaction scores, or even productivity metrics. These indicators can reveal how culture impacts your bottom line.

The Result of Culture Is Sustained Behavioral Change

Ultimately, the goal of any cultural initiative is not short-term engagement but sustained behavioral change. This is what separates a high-performing organization from one that merely survives. Sustained change happens when employees believe in the purpose of their work and see how their actions contribute to larger goals.

For small business owners, this might mean tying every action to your company’s purpose. If you’re running a bakery, for example, your team should understand that their attention to detail, from kneading dough to decorating cakes, contributes to your reputation and growth.

The Culture Equation: Your Next Steps

My company calls this alignment the "culture equation." We summarize it this way: purpose + strategy, powered by culture = results. This equation isn’t just theory; it’s a proven pathway to growth.

For those ready to harness the transformative power of culture, the first step is clarity. Define the results you want, the actions required to achieve them, and the beliefs that will drive those actions. Then, create experiences that reinforce those beliefs.

Culture is not a side project; it’s the foundation of success. When aligned with purpose and strategy, it becomes the differentiator that drives growth, innovation, and resilience.

FAQs About Why Company Culture Matters

About the Author

Post by: Jessica Kriegel
Dr. Jessica Kriegel is the chief strategy officer of workforce and labor at Culture Partners, where she has dedicated over 15 years to guiding Fortune 100 and global organizations in building intentional cultures that drive performance. A recognized thought leader, Dr. Kriegel frequently appears in national media discussing data-driven culture, workplace accountability, and change management.

Company: Culture Partners
Website: www.culturepartners.com
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