Strengthen Company Culture, Strengthen Performance

strengthening company cultures strengthens performance

Strategy sessions were held, the marketing firm consulted, posters were hung on the walls, and new backgrounds were posted on virtual platforms. Leaders attended a culture training, and “Voila!”  A brilliant, positive, and thriving culture is established, right?

Not exactly.

 “Culture eats strategy for breakfast.”

Peter Drucker’s famous quote illustrates that no matter how brilliant the strategy, company culture will influence virtually every element of business performance. Culture has widely been described as “how we do things around here,” a simple description of something as powerful and ubiquitous as organizational culture.  Organizational culture can be described as the routine experiences of employees, the behaviors of leaders, and others around them that (should be) in the alignment of goals, beliefs, and values held by the organization. Discord occurs when the company’s espoused culture is not reflected in the lived reality of employees.

If a healthy culture is so important, why is it difficult to define and build? Creating a desirable organizational culture is not a project to be completed or a destination. Creating a healthy culture is analogous to cultivating a garden. Culture is not static; it is living, evolving, and ever-present in the work environment. Culture exists, like gravity and oxygen, whether or not we pay attention to it. Therefore, culture must be consistently monitored, evaluated, and reinforced. At times, toxic individuals, structures, or processes may need to be rehabilitated or removed for the health of the overall ecosystem.

Small But Mighty EVP – Culture is Critical in Small Organizations.

The culture of your organization defines your Employer Value Proposition (EVP.)  Another way to think of EVP is, “why would someone want to work here?”  This is an important question, whether the company consists of 15, 500, or 100,000 employees

In a current highly competitive labor market, smaller organizations may be challenged to compete in the War for Talent. Elements of EVP relating to compensation, benefits, PTO, educational reimbursement, and flexibility may seem insurmountable. Smaller organizations that focus on a positive culture may offset other challenges in EVP.  They must deliver on their healthy culture promise to achieve market differentiation.1e

The Vault Consulting 50 annual ranking is a resource closely monitored by soon-to-graduate MBAs from top tier universities and those exploring career opportunities in various consulting practices, large & small. The recently published results found that 40% of consultants ranked culture as the most principal factor in choosing a firm, displacing firm prestige as the top consideration.

What Can a Company Do to Enhance Company Culture?

A resilient and vibrant company culture is both the aspiration of most leaders and a business imperative. The impact of company culture is far reaching, affecting all measures of business performance on and beyond the balance sheet. It is important to be aware that ESG Ratings (Environmental, Social, and Governance) are increasingly a factor in raising capital. Company culture is reflected in multiple scales of ESG, which may influence individual, institutional, and private equity investment decisions.

Consider recommendations to assess company culture and address any deficits revealed on these three fronts.

  1. Attract New Talent and Retain Top Performers

Despite a cooling economy in specific sectors, job seekers are still in the driver’s seat with elevated expectations of employers. When experiencing a negative culture, employees will vote with their feet. An inclusive and respectful culture is now table stakes. Employers also need to monitor the external EVP. Company culture is visible in social media posts, surveys, and work-related technology platforms.

Internal culture monitoring can be conducted by:

  • Leveraging feedback from employee engagement surveys, using focused analytics to highlight bright spots and areas for improvement that may vary across different work groups or demographics.
  • Conducting stay interviews, who better to ask “why would someone work here” than current employees? Do not wait for the exit interview to discover what was not working well in the culture.
  • Pulse checks to monitor progress and proactively identify culture shifts.
  • Hold focus groups to solicit feedback and generate ideas. An external partner often facilitates these to ensure objectivity and anonymity.

External perception can be monitored by:

  • Checking Glassdoor ratings and reviews of the company, culture, and leadership. If you see the theme “Run! Do not work here,” you have work to do.
  • Establish a retiree and/or employee alumni community group on LinkedIn. These can become an excellent source of referrals and sometimes result in great employees returning to the organization.
  • Partner with a market provider to conduct an external survey, gathering data and external perspective on the company culture.
  1. Productivity & Performance

A healthy culture accounts for at least 20% of the variability of a firm’s productivity, as cited by a recent study.

  • Regular open one-on-one discussions with employees, with a standing question around barriers they are experiencing, will uncover workplace cultural obstacles and identify individual behaviors that may be impeding personal or group productivity.
  • Get specific. Understand the scenarios or recurring situations where the employee feels either overwhelmed or under-challenged. Common examples that emerge are frequent interruptions, lack of respect, and unrealistic deadlines.
  • Stay alert for issues relating to personal time boundaries. There is no quicker way to damage a great culture than to have employees receiving texts, emails, or calls after hours or to be overloaded to the point of working excessive time after hours to keep up.
  1. Cultural Aspects of Employee Health & Wellbeing
  • Monitor leading indicators of individual health and well-being by leveraging one-on-one employee check-ins. Actively listen and address concerns in a timely manner.
  • Engage HR and/or refer to the company Employee Assistance Program as needed.
  • From a broader standpoint, monitor the cost of health and welfare benefits, absenteeism, and stress-related illness.

There is a saying that “few things worth doing well are easy.” Creating a positive, healthy, and resilient company culture may feel overwhelming. However, it is a journey worth taking for your employees’ well-being, engagement, and productivity and the organization’s long-term success.  Remember that culture is not static and, like a garden, requires ongoing care to thrive.

Karen DeLise
Vice President, Consulting