If you don’t make a plan and set goals for your company, then you may find yourself adrift. In order to make sure everything you do and every goal you set has a specific purpose in the life of your company, you must first know what your company philosophy is.
About 80% of companies on the Fortune 100 make their company philosophy, or values, public, one of the reasons employees who love their jobs enjoy working at that company. In addition, consumers often seek out companies that have similar values as their own. If they must decide between doing business with you or a competitor, and all other things are equal, your philosophy may turn out in your favor.
There are a number of reasons you should create a strong company philosophy for your business:
1. Retains Your Best Employees
If employees feel they are part of something positive and worthwhile, they’ll be more likely to stay at your company even when other opportunities come along. That’s good, because the cost of losing a trained employee is more than you might think.
Turnover is estimated to cost anywhere between tens of thousands of dollars to up to twice the employee’s annual salary. You must recruit, train and allow time for the employee to get to really know the job well and become productive. Losing an employee can also impact other employees who worked directly with that person.
One example of a company working hard to create a philosophy that embraces both customers and employees is Wegmans Food Markets. Wegman’s philosophy embraces the “Who We Are” values, which encompasses:
- High standards
- Making a difference in local communities
- Respecting and empowering employees and customers
It begins training employees in these standards from day one.
2. Shows Clients How You’re Special
For nearly any type of business, you are very likely to have competitors. One thing you can do to stand out from the crowd is to outline your company philosophy. This, in turn, will shape your goals and the way you approach everything you do. If your philosophy is defined, then clients are more likely to remember you.
One example of a company that has a clear philosophy is Y Studios, which states, “Diversity is key to what drives and inspires us at Y Studios.” It shows this on its philosophy page with a beautiful chart that shows how it has diversified its services and how it also embraces diversity overall. When people think of the company, they think about diversity.
3. Gains Focus
A strong company philosophy will impact every single thing you do as a business owner. Especially as a company is growing, you want to be careful to keep a narrow niche. Otherwise, your company can run off down rabbit trails and wind up overextending itself. When you have a clear philosophy, you then weigh any endeavor against that philosophy.
One company that found a philosophy really helped with focus was Buffer. One of the founders shared writing out its focus helped develop a company culture and maintain its focus.
4. Gets Everyone on the Same Page
Another way a company philosophy can help you is to get everyone in the company on the same page. This can be especially helpful for larger companies with a number of employees or even more than one location. Once you have a set of values, you simply need to train employees based on these values and enforce them.
Bright Horizons Family Solutions runs 900 childcare centers in the United States and Britain. It has about 25,000 employees. This means getting everyone on the same page isn’t an easy task. To overcome this challenge, Bright Horizons created a core values statements of “Honesty, Excellence, Accountability, Respect and Teamwork.”
5. Helps With Hiring
If you have a strong company philosophy in place, then you’ll also know the exact type of employee who would be a good fit to help you accomplish goals related to that philosophy. For example, if your company philosophy is your stores are a happy place for customers to visit, you’d hardly hire someone who won’t even crack a smile in the interview.
A business outlook colors every single thing you do throughout your business, and since your employees are the face of the company, this is an important consideration. You can even share your philosophy with potential employees and get their feedback on your values. This type of conversation not only helps you figure out if an employee is a good fit but helps the employee figure out if they want to work for you.
6. Makes Decision-Making Easier
As your company grows, you’ll be faced with hard decisions at times. Should you expand to a new, larger building? Should you add a specific product? If you have a firm philosophy in place, then it is easier to see how these decisions stack up to your values and make the best decisions for your company and your own beliefs as a leader. For example, if your company philosophy is to protect the earth’s resources, then you might not want to build a new building but find an existing one and revamp it to be as green as possible.
There are many advantages to taking the time to define your company philosophy. Not only will it help you with decision making, but it will also help your employees understand what you stand for. Even customers will be better able to explain why they enjoy doing business with you. All around, it is one of the first steps you should take when starting your company, but it also is never too late to define your philosophy.