Management February 5, 2014 Last updated September 18th, 2018 870 Reads share

The Most Important Contributor To Your Bottom Line In 2014

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“Culture” may have been the biggest buzzword of 2013. Culture is something leaders like to talk about all the time, but relatively few companies are actively investing in it. A company’s culture isn’t just a mission statement to slap on the website or something that can be sustained by the occasional company outing or employee award. Culture is tangible. It can be measured. It’s a process that needs to be defined, documented, and institutionalized. Done well, it’s a recipe for success.

The Most Important Contributor To Your Bottom Line In 2014

Culture Really Does Affect Your Bottom Line

Too many businesses write off a great culture as something that is “nice to have,” but not a top priority. They’re more concerned with increasing revenue, cutting costs, and growing their bottom line. What they don’t realize is that an investment in culture makes a huge difference to a company’s profitability.

In its 2013 Study on the American Workplace, Gallup found:

  • that work units with engaged workers have significantly higher productivity, profitability, and customer ratings.
  • They experience less turnover, fewer absences, and fewer safety incidents overall.
  • Gallup also discovered that organizations with nine engaged employees for every one actively disengaged employee experienced 147 percent higher earnings per share compared to their competition.

Need more evidence of the effects of a good culture? The authors of “Firms of Endearment” profiled companies with a policy of putting their employees first, including Southwest Airlines, Whole Foods, The Container Store, and Harley Davidson. The authors tracked these companies’ return to shareholders over a 10-year period and found that it was an astounding 1,026 percent (compared to the companies in Jim Collins’ “Good to Great,” which returned only 333 percent during that period).

If culture impacts your shareholders as much as your employees, why aren’t more leaders committed to growing a positive and productive culture? Just like anything else, culture is an investment, meaning it takes time to see the benefits.

Making an Investment in Your Culture

Investing in a positive company culture involves more than establishing “casual-dress Fridays” and holding fun corporate retreats. Employees and customers can tell if “culture talk” is not genuine, and half-baked attempts to inject a little fun into an otherwise lackluster corporate environment will not have a big impact.

To really build a sustainable culture that will benefit your employees and your bottom line, it’s important that leaders include their team in shaping the culture and commit to working on it for the long term. This means putting your money where your mouth is.

One simple way to do this is by establishing a culture budget with a set dollar amount you will spend per employee each year. Use that budget for basic programs like rewards and recognition, as well as events such as holiday parties and summer picnics. Commit to keeping these programs, no matter the financial situation of the company.

At my company, for example, we started with low-cost basic communication programs that included a CEO blog and online Q&A. We have also implemented town hall-style meetings, created videos to allow employees to get to know the leaders, and distributed an email newsletter to communicate what we’re doing.

We are researching social media-based recognition programs that employees can use from anywhere, and we’ve established an educational platform and a monthly webinar series to help develop our middle managers.

Create a Culture Strategy

These are things that have worked for us, but they won’t necessarily be what your organization chooses to focus on. So what can you do to bring culture to the forefront of your organization? Here are some ideas that have proven successful at companies I’ve studied:

  1. Consistently talk about culture as a key strategy for your success.
  2. Develop a list of core values that determine the basis of your decision-making.
  3. Commit to making financials the lagging indicator of success instead of the leading indicator.
  4. Empower managers to engage their teams with recognition programs, rewards, training, and professional development.
  5. Always hire for culture fit, not just skill.

Remember That People Are More Important Than a Program

Although you need a plan to begin making strides toward a more positive culture, the culture program isn’t as important as remembering that people are people. If you consider a few basic things about your team, you really can’t go wrong.

  • Everyone wants to know what’s happening. They want to be part of something bigger than the job. They appreciate understanding what is going on in all parts of the company.
  • Everyone wants to feel valued. When you do small things to recognize people, they’re more powerful than a paycheck.
  • Everyone wants to see a path for growth. It’s important that your employees know that you are committed to their development.

When in doubt, think back to when you were in the trenches. What motivated you? What made you feel satisfied in your job? These are the things that matter. All the employee rewards and parties in the world are no substitute for company leaders who truly value their employees and are actively investing in their happiness.

Images: ”Pile of hands – Successful business team celebrating their success with a high five  / Shutterstock.com

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Paul Spiegelman

Paul Spiegelman

Paul Spiegelman is the chief culture officer at Stericycle and founder and former CEO of BerylHealth. He also co-founded the Small Giants Community with Inc. editor-at-large Bo Burlingham. He is an Entrepreneur-in-Residence for Office Depot’s SmallBizClub.com. You can read more at PaulSpiegelman.com. @paulspiegelman

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