Why company culture matters

By Simon D’Arcy

Many improvements have already been made in other areas of corporations to improve profits (technology, finance, supply chain management, strategy development, organizational structure). Company culture is the final frontier.

For most companies, optimizing culture remains an untapped domain, rich with potential breakthroughs in performance and fulfillment. Investing in improving your culture pays off in four ways:

• It’s good for business
• It’s good for your people
• It’s good for the world
• It makes work more fun.

Improving your company culture is good for business

The most intelligent business plan or marketing strategy doesn’t stand a chance if your organization is not properly aligned to execute it. Do you have a culture that is a barrier to performance, or a performance multiplier?

Here are some indicators that your culture is hurting performance:

• Poor or failed execution
• Lack of clarity about priorities
• Low morale
• Absence of debate
• Inability to take ownership or follow through
• Reactivity and drama
• Indirect, incomplete and withheld communications

Multiple studies over the last 20 years have confirmed that a strong and effective company culture is highly correlated with better financial performance. When comparing high culture-focused organizations with low culture-focused organizations, studies show an average Return on Assets (ROA) difference of over 40% and a sales growth difference averaging 51%.

Improving your culture is good for your people

These metrics can help you gauge the effectiveness of your culture:

• Is your firm the employer of choice for the brightest and the best?
• Do your people feel a sense of loyalty to your firm?
• Are your senior leaders widely respected and looked up to?
• Do your people like coming to work?
• Are your people proactive in solving problems between each other or across departments?

If you answered “no” to any of these questions, you’ll need to focus on that area to make it a “yes.” Companies with stellar cultures can answer “yes” to all of the questions above.

Most people spend over 50% of their waking lives at work. In our parents’ generation, having a good job that paid well and offered security for your family was good enough. However, for many people today, their job is not just a source of income, but also an expression of who they are. Potential employees, particularly the brightest and the best, are becoming much more discerning about where they spend their time.

Potential employees are asking questions like:

• What kind of job is it?
• How will it help me grow?
• Can I bring all of myself to work?
• Is this a place where my creativity, ideas and feelings are valued?

Thriving cultures supports employees to:

• Grow into their potential
• Increase their confidence
• Feel more fulfilled
• Learn and grow–through professional AND personal development
• Live healthier lives—physically, emotionally, mentally and spiritually

Improving your culture is good for the world

When you leave work feeling depleted from a hard day, how does that affect the way you show up at home?

The more fulfilled you are at work, the more you have to give to your family. Happier, more fulfilled employees lead to more fulfilled mothers, fathers and members of their community, which in turn leads to happier families.

A virtuous cycle is created that contributes to each person it touches. People who feel more energized and fulfilled will be more generous with the people in their lives and contribute more time and energy to giving back to the world around them. Next Level Cultures create meaning and fulfillment for the people who are part of them.

Improving your culture is more fun

Think back to a time when you were on a team or were part of a group that really jelled.  Did you look forward to your time with that group?  Most people answer yes.

• Learning together is more fun than everyone trying to prove how right they are or how wrong someone else is.
• Freely and fully expressing yourself is more fun than feeling like you have to be guarded and careful about what you say.
• Caring about people is more fun than feeling burdened or threatened by them.
• In dealing with office drama, feeling resourceful and empowered is more fun than feeling reactive.
• More energy  = more fun.
• Being part of a winning team on which everyone cares about each other and contributes something meaningful to the world is WAY MORE FUN than the status quo.

Simon D’Arcy   Curator @ Culture-Builder.com Partner at Evolution.  Champion of the Culture Builders Manifesto.