What is your strategy for lifting revenue or becoming more profitable? Is it all about raising the bottom line, no matter the cost?
When companies are laser-focused on financial outcomes, they might overlook more sustainable strategies for maintaining steady growth. Bottom-line driven leadership makes sense, especially when startups and small companies face immense pressure from investors to hit revenue goals and face a future that’s uncertain, at best. But damaging a company’s culture while raising profits is counter-productive. Especially considering that only about half of all new small businesses last five years.
It may seem hard to invest time and resources into something as tenuous as “company culture” when the survival of your company itself is at stake.
However, culture is far more than an abstraction; it’s a set of shared values and goals that unite every employee, regardless of background or department. Leaders must define and clearly communicate these principles early in the life of the company, so that new hires understand the environment they are entering and how they can assimilate.
A strong company culture doesn’t just make for happier employees; it makes for more productive, efficient and committed employees. And when your people are spending more time driving company goals and less time browsing social media (or worse, fielding calls from recruiters), you can bet your bottom dollar it’s going to have an impact on your bottom dollar.
A number of research findings from the past several years corroborate these claims:
– The likelihood of turnover at companies with strong culture is only 13.9 percent, compared with much higher turnover at companies that have a poor culture.
– Happy employees are, on average, 12 percent more productive.
– Companies with high levels of employee engagement are 22 percent more profitable than companies with low engagement.
How exactly can leaders shape the culture to impact the bottom line?
Let’s say you take a job digging a hole. No one tells you why you’re digging, and the labor is hard. The days are hot. Your arms are aching. You start to think about looking for different work. After all, you’re just digging holes. You could be doing anything else.
Now let’s say your boss tells you you’re digging to uncover a forgotten civilization that will change the way we think about history forever. Makes the labor a little easier, right?
No matter what your company’s mission is, getting your team rallied behind the why of their work makes for more committed, passionate employees. Setting transparent goals at the company, team, and individual levels encourages hard work by giving everyone something to rally behind and measurable steps to celebrate along the way.
There are several strategies you can use here, ranging from basic goal checklists in a spreadsheet (not ideal), to hierarchical objectives and key results (OKR) models tracked in a performance management system. It’s important to not only set goals, but to outline specific metrics that will help you measure the success of your efforts at the company, department, and individual levels.
When it’s done right, company culture helps set the tone for employee attitudes and work ethic. It starts with crafting core values that explicitly articulate the principles under which every employee is expected to operate. The right values inspire self-governance — driving employees to work harder, smarter, and more closely as a team.
When these values are in place, team members will start to hold themselves and their peers accountable for meeting them. Written values also create a common language through which you can celebrate successes or point out shortcomings.
Interested in setting values but unsure where to begin? Start by studying your most valued employees. Watch how they work, identify patterns, and put into words what they do that makes them amazing. Most likely, these operating principles are the same values you’ll want your entire organization to emulate.
Performance management, on the surface, may seem more procedural than related to company culture. But as Gallup has studied for years, the most engaged employees receive consistent feedback on what they do well and where they need to improve. Engaged employees, as it turns out, outperform the least engaged employees by 22 percent in terms of profitability.
Employee engagement platforms not only help improve employee attitudes toward work; they make it possible to measure important personnel metrics that impact your bottom line — things like employee satisfaction, goal completion rates, or even qualitative factors like challenges/pain points.
Crafting regularly scheduled and open channels of feedback allows managers to push their employees to both fulfill their responsibilities and challenge themselves to grow professionally. That could mean taking on new responsibilities, getting a relevant certification, or expanding their existing role by adding new skills.
At the same time, two-way feedback gives all team members a comfortable channel for raising concerns and ideas that may affect your company’s success.
Your company culture should value employee development and furnish team members with plenty of opportunities to expand their skill sets — maybe even through an official learning management system. As skills and competencies increase, you’ll see higher levels of performance, efficiency, and innovation across the entire organization.
Here are a few examples of employee development opportunities you can offer your team:
In-person conferences/seminars: There are educational events available in nearly every industry for those who want to learn from experts and build relationships with new potential partners. You can encourage employees to attend these events and share their findings. Depending on how your budget looks, you can even offer to cover registration fees, travel expenses, or both.
Skills-based development: One of the best ways to break a glass ceiling is to learn new skills. Employees looking for new ways to contribute value to your company should be rewarded with financial and logistical support. That could mean paying for an online web analytics certification, or sending one of your designers to software school to learn UX coding.
Mentorship programs: Sometimes, all it takes to kindle ambition is a little guidance from someone with more knowledge and experience in your field. Mentorship programs can provide exactly that — an avenue for veteran employees or managers to coach new starters toward success. This method takes a little more planning than the rest, but it will pay dividends in employee performance and retention.
Team members who feel valued by your company’s leadership will be more committed to repaying that investment through hard work and dedication. Plus, they’ll bring their increasingly valuable skills to the table.
Next time someone in your organization tries to argue that company culture isn’t a financial priority, point to some of the names on Fortune’s Best Companies to Work For list. From Google to Marriott and Capital One, there is a clear connection between a healthy company culture and a healthy profit margin.
Of course, new marketing campaigns, sales initiatives, and product launches are all important to company growth, but none of those things would be possible without your most important asset: your employees. If you want to grow your company, you need to give your employees an environment where they can prosper and feel valued. Company culture matters — a lot.
Karri Bishop is a marketing communications specialist at TechnologyAdvice, a B2B marketing firm that connects buyers and sellers of business technology. Karri manages social media strategy and covers various topics in the industry.
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Company Culture – /kəmpənē kəlCHər/ n. Buzzword overused by many businesses to describe a set of values that are not actually...Read More