How does Your Company Culture Impact Your Overall Business?
When you want your business profits to grow, if you are like many businesses you probably re-evaluate your strategy and cut expenses where you can. When it comes to delivering for your stakeholders there is one critical element that can trump all others: company culture. Contrary to what some business owners may believe, company culture is more than just a buzzword. Your team is your business, and so serving those you have the previlige to lead by creating and supporting a great company culture must be the priority. Not convinced? Companies that focus on creating a positive culture tend to earn more than their competitors. No doubt why Peter Drucker is known for this famous quote, “culture eats strategy for breakfast”.
Here’s how prioritizing a positive company culture can help your business grow.
Positive Company Culture Increases Employee Retention and Decreases Turnover
Simply put, employees who are happier at work are less likely to quit. While you can find replacement employees, running a business with a high turnover rate can quickly become expensive. Each time you need to hire someone new, your business must invest in advertising; spend time interviewing and evaluating applicants…not to mention the high cost of training. When an employee quits, there’s always the question of how other workers will make up for their absence. More often than not, being understaffed negatively impacts the productivity of your remaining employees. This can decrease company morale. Depending on your industry, you also may need to pay overtime to make sure your company stays on track. The result of high turnover is a combination of overworked, less productive employees, and increased operational costs — two things any business wants to avoid.
Great Culture Makes Employees More Productive
Employees who feel appreciated aren’t just less likely to quit — they also are more likely to be more productive at work. One study even found that workers who are unhappy at work are, on average, 10 percent less productive than happy employees. It’s a logical conclusion; when employees feel their company doesn’t care about them, they’re less likely to go the extra mile for their company.
Of course, culture isn’t the only thing that impacts employee happiness. Adequate pay, health benefits, having a worthwhile cause, sense of community, development opportunities and the ability to achieve work-life balance are important factors as well. But if you want to make sure you’re running a productive company, taking steps to ensure a welcoming environment and overall employee satisfaction is a vital place to start.
Great Culture Facilitates Development
In a company environment that emphasizes the negative, employees may feel defensive and closed off when it comes time to review performance. However, if your company has adopted a supportive culture of coaching, your employees are more likely to be open. It’s important for your team to know how much you care. A healthy company culture leverages and praises strengths while offering a framework for employee development and growth. If employees sense that you’re willing to invest in them (rather than criticize their weaknesses), they’re more likely to react positively to constructive feedback. A growth-focused work environment also facilitates employee engagement, which usually results in a focused workforce of people who are self-motivated to respond to coaching and improve impacting your bottom line.
Great Culture Supports Unity and Brand Recognition
A clearly defined company culture has a host of benefits for your employees. Still, it also has the potential to positively shape the way your company appears to customers and clients. When your employees feel your company values are present and know they are more than just words on a wall, they’re more likely to live them. This translates to a focused, unified community that inspires confidence in your customers, making them more likely to want to grow with you.
Great Culture Fosters Open Communication
While a positive company culture makes it easier for your employees to improve, it also offers opportunities for you to improve the working environment. For instance, many businesses have begun adopting an open office style. In some cases, this is a good thing — it makes collaboration more comfortable, and it helps employees feel like part of a team. It also makes it easier for employees to get to know one another, which can improve morale.
On the other hand, open offices also can compromise focus and productivity as they increase distraction risk. Ultimately, the personalities of your employees and the nature of the work they do should dictate which environment is best. If your company has adopted a healthy and communicative culture, you can talk to your employees to determine which setting they prefer. In a culture that’s more closed off, it can be not very easy to get honest answers from those who work for you. When you and your employees can communicate honestly, it leads to better working conditions for everyone, which almost always translates to improved culture, results and profits.
The Bottom Line
In a business world where many owners and managers value profit above all, it’s easy to disregard the importance of company culture. However, with 20 years of experience in focusing on servant leadership and creating a great company culture at Etech, we have seen the tangible benefits of a motivated, more engaged and happier workforce. When you take meaningful steps towards creating a positive company culture, you’ll come closer to creating a working environment your employees look forward to coming to, as well as a business they’re proud to work for.
Find out more about what it takes to create a positive culture in your company today.
This blog was earlier published on LinkedIn.