Culture – Better or worse impact for your business. Culture, according to the Cambridge Dictionary, is “the attitudes, behaviour, opinions, etc. of a particular group of people within society.” So, how does this affect a business? Quite simply, because a business is a society – its people are together (physically and, increasingly, virtually) for most of their waking hours during the week, and the company culture can have a significant impact on the business overall.
Think for a moment of companies you admire. What is it you admire about them? I’d suggest their attitude to customers (you!) plays a major part here. Conversely, what about companies you don’t like to deal with (we all have some of those, too)? Again, it’s likely that the way they’ve treated you is significant in your dislike of them.
As business consultant Vaughn Aust said, “Happy employees lead to happy customers, which leads to more profits.”
And at the root of whether employees are happy, or not, lies the company culture. And the effect of this can be quantified, as this study shows. Companies were tracked over an 11-year period and those with a strong culture averaged more than 4x the revenue growth, a massive 700% higher net income growth and over 12 times the stock price growth of those without a strong culture.
A small company generally takes its lead from the founding members, but as the business grows, new people come in which can cause disruption. Preserving a strong culture is where leadership is really important: having a clearly articulated vision and values, hiring people for fit as well as skills, public recognition of employee actions and ensuring the expanding leadership maintains personal open-door policy and is open and transparent about what they’re doing.
And this is even more important in this era of “The Great Resignation,” where managing staff losses and the costs of replacement is going to be so critical. Furthermore, as strategy changes with time and the company’s circumstances, it’s critical that new strategies be looked at in the context of company culture if they’re to be successful. If your business, for example, has always been a high-touch one, becoming a price leader overnight will cause huge disruption to your staff and your customers, and will likely be extremely expensive for the business, too, as staff and customers become dissatisfied.
If, however, the strategy change is considered vital, the question then becomes one of determining the extent to which you will modify it to better fit the culture in the short term, and how you will be able to change your culture to move it towards the desired strategy over time, for culture can be changed – it just takes time.
All these things are an integral part of a strong company culture. By treating people well – not just in terms of financial reward, but of openness, consideration and strong bidirectional communication with the leadership – a team feels valued, and this pays dividends in terms of productivity, customer satisfaction and, of course, the bottom line.