Every good leader knows that culture matters, but is it worth investing into when the economy is challenging companies to stay afloat?
Here are five reasons why investing into your company culture is worth it:
1. Less drama, more commitment and productivity
A company’s culture springs from its vision and reason for existing. In companies with strong cultures, you find very little (if any) politics, gossiping, or unhealthy competition. Each person believes their work matters, and personal differences seem small in comparison to the bigger cause that the vision champions.
Smiles and laughter instead of backbiting and gossip are exchanged along hallways, corridors, and at water coolers. A company with a great culture means that people enjoy what they do and who they do it with, instead of waiting to clock out at 6PM on the dot.
Besides improving team work, a great culture also provides strong internal motivation. If you’re looking for passionate, motivated people for whom work is not “just a job”, then you’ve got to offer more than a paycheck. You have to offer them a compelling purpose and a great environment where they can contribute to that purpose.
2. Effortless recruitment and low turnover
For many companies, winning the war for talent is a big challenge and a top priority. Many companies invest lots of time, effort and money into recruitment – while other companies just seem to have people lining up to work for them, with no effort at all.
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What these companies understand is that if you create the right culture, you will naturally attract the right people. If a company’s leaders don’t settle for anything short of excellence, you will attract like-minded people who won’t settle for anything less either.
Finding the right talent does not only impact productivity, it also links directly to retention. When there’s a good fit in terms of vision and values, people have a cause they can commit to, and this gives them reason to be loyal.
3. Satisfied and loyal customers
Want to see your customers and clients returning? Your culture has a huge impact on that. When your people are well taken care of, they will go the extra mile for your customers.
Take Zappos – an online retailer who became one of the world’s largest online shoe stores simply by delivering great customer service. One of Zappos’ core values is “Deliver WOW through service”. At Zappos, staff not only help customers exchange shoes and find the right size, but they even respond to queries about where to get the best pizza in town!
On the other hand, when there isn’t a culture of growth and progression, it’s a sure sign that turnover rates are high. When turnover is high, clients or customers are constantly being transferred to newcomers who don’t have much experience or depth of understanding. This leads to frustration and a high chance your customers will take their business elsewhere.
4. Investor confidence
Every time Fortune’s annual 100 Best Companies to Work For list is published, investors pay attention. Companies that make the list are known to outperform others in the stock market.
By promoting a culture of innovation, your company is more likely to be able to keep up with the ever-shifting needs of the market. Companies that are not able to change will find themselves facing stiffer and stiffer competition every year, affecting profits, market share and investor confidence. Smart investors know that a company’s vision and culture go hand in hand. Smart leaders know that to inspire investor confidence, they must demonstrate an outstanding culture.
5. Ability to focus on strategy and innovation
Often, the company leaders’ precious time and energy is expended on dealing with internal issues, such as restructuring and dealing with inefficient business units. When there is a strong culture in place, less internal changes need to be made. A company’s leadership can then turn their focus outwards, to focus on new strategies to drive the business forward or new markets to conquer.
Reaping the benefits of culture
Many people think that culture is a ‘soft’ approach or strategy when it comes to business growth. They agree that it has some positive impact, but most people think you can’t measure the ROI of culture and tie it directly to profits and KPIs. That couldn’t be further from the truth.
- customer loyalty,
- productivity levels,
- the number of support calls,
- the number of customer complaints,
- the number of referrals of new customers,
- the number of job applicants, to
- the number of partnership opportunities –
…can all be tied back to the kind of culture a company promotes. If you compare the numbers of those metrics before and after a period of intentionally building your culture, you will be able to determine your company’s ROI of culture.
To reap the benefits of culture, you must cultivate it deliberately. Culture will exist, whether you choose to cultivate it or not. Cultivate it intentionally, and it can become a strong, positive one. Neglect it, and it will become negative and dysfunctional.
As a business leader, you already invest in ways to grow your business, develop your talent, improve productivity, retain customers, and reach new markets. Place some investment into your culture as well, and you will find yourself with an army who are driving themselves to achieve your goals.