I want to talk with you about “Culture = Cash”
“In more than 19 years working with companies around the world, I have come to
realize the incredible importance of having a strong organizational culture,
as it is truly one of the only sustainable competitive differentiators
available to many businesses today.
- can copy your products,
- they can copy your distribution,
- they can reverse engineer your technology,
- they can copy and beat your prices…
one of the very few things that can be a defendable competitive advantage is
having unique, strong and thriving organizational culture.
Interestingly though, what employees look for in a great corporate culture is
often quite different from what management wants an effective culture to be,
and to be successful, it is critical to address both sides of the equation.
What management wants from their organizational culture?
Most business owners tell me that what they look for in organizational culture
is a high level of
- innovation and
- disciplined execution.
I think it is best summed up by several of my clients who have asked me to help them build more “Leadership mentality” within their employees.
In other words, they want employees to come in every day and look for ways to grow
the business, save money, serve customers, and treat the business as if it
were their own.
What do employees want from their organizational culture?
From the employee’s viewpoint they are typically looking for an organization
- that is enjoyable to work for,
- where they get to work on interesting projects,
- with interesting people,
- get lots of support and training,
- are empowered to do their jobs well,
- take pride in the organization,
- and feel like they are doing
- meaningful and important work.
The goal then for the leader then, is to find a way to merge these two sets of
needs into one organizational culture that creates highly satisfied, engaged
and loyal employees. Why is this so essential? Because the number one driver
of highly satisfied, loyal and engaged customers, is employees that are excited
about where they work and the work they do.
Highly engaged employees lead directly to happier customers, which usually
leads to bigger revenue and profits. How much bigger? Well, research shows
that having a very strong organizational culture of highly engaged employees
can drive a 189% increase in profitability.
To make it even more relevant, additional research by the Gallup organization
and other respected firms clearly shows that actively disengaged employees –
employees that do not like the company they work and do not like their job can
cost a company as much as 22% of the total revenues. If those numbers don’t
get your attention I don’t know what will.
How about some actual cash numbers? For every £10,000 you pay a disengaged or highly disengaged employee, 34% or £3,400 is lost through lack of productivity.
So, it is my strong recommendation that you look at building an effective
organizational culture as one of your key strategic objectives.
Done well it can be a major differentiator in the marketplace and have a significant impact
on profitability. Done poorly it can cost your organization as much as a
quarter of total revenues.
In other words: “Culture = Cash.”