Ask any business owner what they'd like to improve in their business and you'll almost always get a list including better teamwork, higher morale, improved quality and lower staff turnover. They know the impact these things have on performance and profits so it's not surprising to find they spend thousands of pounds every year in an attempt to make them better.

What is surprising is that most companies give little thought to these issues until they have already become a painful and costly problem. In the early years of business, companies pay little or no attention to the factors that actually cause these problems in the first place but they can avoid the frustration, disruption and the financial cost of solving these problems if they have a system to prevent them happening. Prevention is better than cure, as the saying goes.

It seems crazy that while nearly every business is advised on marketing, funding, finance and legal matters, only a select few are guided to consider the foundation of their business upon which everything else is built.

'Staff turnover reduced by 80% in less than six months'
Entrepreneur Dave Anderson figured this out early although it came as a result of a painful lesson. His restaurant business was doing well financially but, even though the business was growing, there was a problem he had to solve fast because staff turnover in some restaurants was at 100% and this was hitting the bottom line hard.

Fortunately his training and development manager, Brandon Johnson, realised the problem had nothing to do with pay but with understanding the deeper motivations of their people. "We completed a training programme based on the internal values and beliefs of our people and the result was amazing," he said. "Our staff turnover reduced by 80% in less than six months and our culture became fundamental in helping us grow from six locations to 120 in only six years."

'Ignoring your culture costs thousands of pounds'
Every business is built on its culture, yet the most costly mistake new companies make is the failure to understand the importance of creating a values-driven culture from the beginning. Ignoring your culture costs thousands of pounds through lost productivity, low morale, under performance and unnecessary staff turnover.

'You wouldn't build your home without a foundation, so don't build your business without one'
Some companies spend tens of thousands of pounds on culture change programmes to become more responsible, but that is equivalent to renewing the foundations of your home after it's already been built. Intelligent, forward-thinking business owners avoid wasting time and money by creating the right business culture from the start. You wouldn't build your home without a foundation, so don't build your business without one.

Most of us know that one of the biggest challenges in business today is the growing demand of consumers, employees and even investors who are becoming more aware of social and environmental issues. The impact of this can be seen where increasingly people are leaving their jobs to work for responsible companies.

Helen, an ex-sales director for a multinational company, is one example. "I realised my personal values had evolved and I felt uncomfortable with some things my company was, or wasn't doing so leaving became my only real option," she said.

'My spirit was yearning for something else'
Mark, who was a consultant for a FTSE 100 company, is another. "I left because I felt disillusioned with the lack of concern of the wellbeing of our people, and also because I felt empty inside, like my spirit was yearning for something else. I now see my business career as a way to make a living as well as make a positive difference in the world."

'Ethical, responsible values increases motivation and performance'
With the increased awareness around responsible, ethical business, we are seeing more people using business as a vehicle to do good things for society and the environment. When you grasp basic human psychology, it's not difficult to understand why this happens. We are holistic beings with multiple needs - physical, emotional, mental and spiritual - and our deepest need is to make a difference in the lives of others, and contribute to something bigger than ourselves. This is just one reason a company driven by ethical and responsible values increases motivation and performance.

'Increased profits by 140%'
Both Helen and Mark experienced what I have diagnosed ‘terminal values misalignment' (TVM). This occurs when your personal values are out of alignment with the values of the working culture around you, which often brings a feeling of inner conflict.

Removing these values conflicts from your culture is not a ‘soft and fluffy' exercise; it's an intelligent business decision proven to increase financial performance, as shown by one company which removed values conflicts from its culture and increased profits by 140%.

The answer to improving your performance, retaining staff and increasing profits lies hidden deep inside your business: in your culture. You wouldn't build your home without a foundation, so don't build your business without one.

Alan Lewis is managing director of training and coaching company The Values Advantage and an expert in values driven, responsible business cultures. For a free, detailed e-book visit www.TheValuesAdvantage.com [1]