Leaning on the core company values is a key success factor for practicaly every team. When team members don’t exactly know what their goals are, when they’re not familiar the mission and vision of an organization and how it alignes with their work – it is time for a culture transformation process that starts with clarifying its core values.
Did you know that only 41% of U.S. employees strongly agree that they know what their company stands for, and only 27% of them agree that they believe in their organization’s values?
Not very encouraging data, if you ask us.
So, what can be done?
First of all, building an organizational culture starts by defining a set of core values, which should ecomaps everything from its talent management strategy to its employee recognition practices and customer experience programs.
Why should it be done?
Well, first thing first, a strong positive culture can enhance employee engagement by up to 30%! This, in turn, results in up to a 19% increase in operating income, and a 28% increase in earnings growth.
One should keep in mind that a strong, positive company culture is not just an adoption of desirable employee behavior. It is more a well-planned and rather detailed component of any business strategy.
Cultural environment – a key factor in employee productivity
Without a shadow of a doubt – exceptional communication, continuous training, and fair accountability (all employees are held to equal expectations) are key to a five-star company’s culture. That, on the other hand, can bring superior employee productivity. Also, mutual respect among team members and management is a must (and a part of a solid company’s culture).
The truth is that quality workers expect a team-based culture and job security, including fair compensation and benefits. However, culture is a difficult thing to define or quantify. The best thing would be to consider an organizational culture a sort of a black box – containing key values, symbols, meanings, beliefs, assumptions, and expectations that organizational members share.
So, what does an ideal company culture look like?
Unfortunately, there is no single model that is the holy grail of the best company culture. The only thing we can rely on, are good practices that then lead to results.
For example, flexible start times and schedules correlate well with better employee performance and happiness. Organizations that offer generous maternity and paternity leave and other benefits – enjoy better employee retention.
On the other hand, badly conceived and implemented company culture creates opportunities for unethical workplace behavior. This often manifests through managers that go by the “do as I say, not as I do” catchphrase. With this attitude, they don’t contribute much to any positive results and can discourage possible improvements.
It is only fair to conclude that a strong and accommodating (plus, globally conscious) workplace culture brings in employees who want to do a good job and leave things better than they found it. Because, believe it or not, the workplace can be a viable environment for fostering social change!
Values and profit
It has long been accepted that an important contributor to general profitable performance is corporate culture. Today more than ever, managing the corporate culture should be one of the top priorities for CEOs.
However, a company’s culture develops on its own, encouraged or not. Employees are the ones that build and maintain it, so it is very important to be guided by conscious, positive efforts and practices.
A negative and toxic culture can lead to disgruntled employees but also decreased profitability. Especially if it greatly affects the frontline teams. While they’re the closest to clients or customers, their connection and communication can often be scarce.
The bottom line is: to build and sustain a positive culture takes a long-term up-front investment and it increases profitability by keeping both the employees and the customers happy.
So, when faced together, values and profit are on the same side, both working for the company’s prosperity.
To have truly engaged employees, every company must think of their well-being and the level of satisfaction. Good company culture is a strong reason for many to stay loyal to their organization.
A 2012 study from the Center for American Progress found that the average cost to replace an employee earning $30,000 – $50,000 per year is 20 percent of their annual salary. For high-salaried employees, it could even go up to 213 percent.
But, the list doesn’t stop there.
Engaged employees lead to loyal employees, and loyal employees lead to loyal customers. This is a result of the fact that a positive culture encourages smoother and more efficient internal communication between employees, teams, customers, as well as suppliers.
When all this communication is aligned, time opens up for problem-solving and also for additional projects or clients – all of which leads to corporate growth.
And if an organization has a goal to continue growing, it needs to develop and nurture a positive company culture that will eventually increase its profitability. According to Gallup, “the behaviors of highly engaged business units result in 21% greater profitability.”
To back up the idea that a positive company culture increases profitability, John Kotter discussed in Forbes some strong findings from his book ”Corporate Culture and Performance” on how corporate culture affects economic performance. He tracked the cultures of 200 companies over eleven years and found that those with a “performance-enhancing culture” out-performed those without a positive culture by hundreds of percentage points.
So, now that we agreed on how value equals profit, what can we do to improve the culture our organization tends to foster?
- Start by establishing a clear set of company values. As a leader, you need to have a clear plan of action for everything. Educate your team on the company’s purpose and core values, and explain how you’ll use those.
- An organization’s identity should be used to help guide every decision, including handling the team, customers, or any contributions to the community. Every leader should consult the company’s values for inspiration when they are confronted with a challenging choice.
- A strong leader should communicate about the decisions that they are making, explaining to the team why they are made.