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small business summit

Shastri Ramnath particpates in a panel discussion at the Globe and Mail Small Business Summit in Toronto on May 9, 2017.

It's not listed on your balance sheet and maybe not even in your business plan, but building a fantastic workplace culture is a key pillar of success for most entrepreneurial ventures. Doing it isn't as simple as adding a Ping-Pong table and beer fridge to your staff room, though.

Neglect workplace culture, or worse, ignore the development of a toxic culture, and you'll not only have a company stocked with unhappy employees, they may be filing out the door faster than you can replace them. Here are five tips from entrepreneurs who spoke about developing a strong company culture at the recent Globe and Mail Small Business Summit.

1. Create careers, not jobs.

When Josie Rudderham and her business partner Nicole Miller started Cake and Loaf, now a million-dollar bakery business, out of a house in Hamilton, their aim wasn't just to create irresistible treats. Mission critical was creating jobs with staying power that would limit staff turnover. Key to doing it would be their ability to pay employees a living wage, which, in Hamilton, meant paying staff at least $15.85 an hour. "We really wanted to create careers and not just jobs you work in for six months while you're at university," Ms. Rudderham said. After five years of business, they were finally able to afford it. Although staff didn't do the cartwheels that Ms. Rudderham and Ms. Miller had hoped to see when they announced the policy, employees did double down on their efforts and commitment to Cake and Loaf. "There was a reinvestment in what they were doing for a living," Ms. Rudderham said. "This was now something they could envision themselves doing for 10 years. They wanted to build this business with us."

2. Lead – and laugh – by example.

When Shastri Ramnath founded Orix Geoscience Inc., she was surprised by what behaviours her employees modelled after her, right down to her habit of leaving used coffee cups lying around (once she started doing it, staff started, too). "It shocked me how much they mimic the leadership," she said.

Immediately, Ms. Ramnath saw an opportunity to shape the kind of culture she wanted to take root. "I laugh a lot. So, our company laughs a lot," she said. "I enjoy my vacations. They enjoy their vacations. I'll sit down with employees and just talk about outside-of-work stuff."

Setting that tone will create loyalty and longevity, said Dave Jones, vice-president of business development for Sun Life Financial, which was one of the event's sponsors. "As entrepreneurs, as the most senior person in your firm, what you do, your staff does. It's really hard to take time off when you're the owner of your firm," Mr. Jones said. "But if you don't take time off and you don't talk to your team about taking time off, they won't take time off. And they burn out. And they leave you."

3. Give the millennials what they want.

Instead of crossing your fingers and hoping that millennial employees will just hurry up and assimilate, consider tailoring your workplace to their needs. "Pay a lot of attention to what they tell you they need," said Sun Life's Mr. Jones. "They want their compensation, they want their benefits, they want flexibility and they want the ability to influence the future of the firm. I think if you can give people that, you'll create an intense loyalty," he said.

Many workplaces – and start-ups in particular – instinctively balk at millennials' work-hard, play-hard demands. Mr. Jones's advice? "Just give it to them." That's what Ms. Ramnath did at Orix Geoscience. Now with about 50 employees, she has what she calls a "don't say no" policy for staff; she even encourages employees who are travelling for work to take extra days off for exploring. "Because they're young they want to travel the world," she said, adding that the company chips in to pay the costs of extra flights and even postsecondary education. It also allows flexible work hours.

For Mr. Jones, the approach is right on target. "Why can't somebody have more time off? Why do we have to work 40 hours every five days? If you just listen and find ways to meet their needs … they'll be your most committed, most productive, most impactful work force. It's a huge opportunity," he said.

4. Make your staff a part of your mission.

Maybe you can't afford to pay salaries that top your best competitors or give out big bonuses. Johnathan Nightingale, chief product officer at Hubba, has a better tool – and it's free. "Bring employees into your story. There's a reason you started this business. Maybe it's just to make money. Maybe it's to help people. Maybe it's to feed people. It doesn't cost anything to be really open about that," he said. Telling employees what your dream is, why you work too many hours or the reasons you poured your life savings into the business buys the best kind of retention currency. "They need to understand what they're here to do. And that sense of purpose fills in the gaps if they have a bad day or if they're trying to figure out whether their job matters or not," he said, adding: "Mission works better than almost anything in terms of coaching them to go above and beyond."

5. Be explicit about what you don't want in employees.

It's common practice to stuff job ads full of the attributes you're looking for in an employee. You may save time – and attract the right kind of applicants – by listing what you're not looking for. "We put in our job descriptions 'No assholes,'" said Mr. Nightingale. "We've actually had people opt out of the process as a result." By being explicit about the kind of company culture you have, Mr. Nightingale said, you'll be sending a strong signal that is likely to attract the kind of employees you actually want. "All you need to do is say, 'Hey, we're not like that. Here's what we're trying to build.' And you're going to tap into that different talent pool," he said.

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