Managing Business Relationships: The Key to Success

Americans have a "pull yourself up by your bootstraps" mentality that speaks to our individualism and enterprising spirit. This mindset is especially pronounced among business owners, who have chosen to forego the typical employment route to create their enterprise. However, independence is relative in the business world. Businesses involve complex, interconnected webs of customers, employees, and vendors. No company truly stands independently; it relies on strong relationships with others.

Knowing how to treat people is fundamental to any organization’s success. For some, business relationships come easily, while others must work harder to develop them. It all starts with having a core company culture that sets the tone for interactions with employees, customers, and business partners.

The Importance of Company Culture

"No man is an island, entire of itself." So begins the seventeenth-century prose work of English poet John Donne. This quotation is a timeless reminder that no one is wholly self-sufficient. In today's highly connected world, cooperation, consensus, and communication are more important than ever.

The concept of "company culture," or the shared set of values, attitudes, beliefs, and practices that a company adopts, has become a key differentiator in the modern workplace. Companies with a strong culture are rated as more attractive to employees and have lower turnover. Happier workers mean more productive workers and more profitable businesses.

Company culture is equally important for a business’s consumer-facing side. Engaged employees can drive a 10 percent increase in customer ratings. Additionally, more than 82 percent of consumers prefer that a company’s values align with theirs. A cultural match with a company’s vendors can also ensure a good fit between partners and reinforce the company’s goals, mission statement, and reputation.

Setting Company Culture

Developing a company culture should not come at the expense of strategy. Growth and profitability, although not a cure-all, solve many issues. A company that has a great culture but does not have a good product or service and does not make money cannot paper over this fatal flaw.

What does a winning culture look like? Building company culture starts with vision and leadership and trickles down through the rest of the organization to internal and external stakeholders. Shared values are at the heart of a company’s culture. Common values should touch on the following concepts:

• How results are measured, emphasized, and reinforced
• The way people are treated
• Collaboration
• Attention to detail
• Innovation
• Competitiveness
• Stability and consistency

When developing a culture, the design should fit the function. Business owners must know where the business is headed, have a strategy for getting there, and build a culture that aims to achieve specific goals. Culture is defined by action, and social infrastructure, like physical infrastructure, requires investment. Practices that develop culture include:

• Hiring that focuses on personalities compatible with company culture
• Onboarding programs that teach a company’s value system and reinforce culture
• Rewarding employees and customers
• Providing a forum for employees and customers to provide feedback
• Communicating cultural impact to stakeholders

Company Culture and Legal Issues

Company culture should not come at the expense of sound business—or legal—practices. An over-focus on culture can blind a company to issues that could result in a lawsuit or regulatory action, such as:

• Hiring discrimination: Inappropriately addressing cultural fit in the recruitment and hiring process could open a company to discrimination claims. Employers should avoid giving the impression that only candidates who fit a certain mold will be considered.
• Contracts: Culture cannot protect a company in the event of a dispute with an employee or vendor, but a well-drafted contract can help avoid misunderstandings related to issues such as confidentiality, competition, termination, and intellectual property.
• Achievement award programs: Employee achievement awards have pay, tax, withholding, deduction, reporting, and disclosure considerations that need to be accounted for in their design and execution.
• Loyalty programs: Legal issues surrounding customer loyalty programs include state gift certificate and coupon laws, privacy and data security, unfair and deceptive trade practices under the Federal Trade Commission Act, and federal and state sweepstakes and contest laws.

Start a Relationship With Our Small Business Legal Team

No company is an island. Companies have complex relationships with their employees, customers, and other businesses. Building the right business relationships is key to a company’s success. Our law firm wants to build relationships with our clients for the long haul. Every strong relationship begins with a good conversation.

Contact us today:

• Email: [email protected]
• Phone: 888-450-7999
• Website: www.BellehLaw.com

Schedule a consultation so you can let us know how we can help you form and maintain legal relationships that achieve your goals

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