ROI of Company Culture - Why Workplace Sustainability Is Dependent On More Than Profit

ROI of Company Culture - Why Workplace Sustainability Is Dependent On More Than Profit
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The majority of today’s businesses focus on making as much money as they possibly can. I don’t blame them. Your business needs a steady flow of capital to ensure you can keep your days open, and money is a huge motivating factor that inspires employees. But there’s more to running your business than chasing profit, and sustaining your workplace depends more on culture than cash.

Google “company culture” and you’ll find thousands, if not hundreds of thousands, of articles detailing the importance of culture in the workplace. The problem many companies face is they often look to strengthen their company culture only after crisis strikes. When your company lacks the foundation of a solid culture, cracks will show and over time cause difficulty moving your business forward.

Take banking giants Wells Fargo and Bank of America as two examples of companies with struggling culture issues. Wells Fargo recently terminated thousands of employees after discovering millions of fake accounts had been opened in order to meet highly competitive sales goals each month. The bank’s culture was toxic - former and current employees shared the high-pressure sales culture that was nurtured within Wells Fargo and noted its foundation was focused all on cross-selling. Right from the start, Wells Fargo placed an emphasis on accumulating as much profit as possible and instead of nurturing a culture where employees and their well being are placed at the forefront.

The same could be said of Bank of America Merrill Lynch, which suffered an international scandal when an intern was found dead after working for three days straight. Interns and young associates detailed the need to impress senior executives, and the feeling around the company was everyone competed with one another for attention. The payoff of long hours and hard work? A hefty paycheck, but even money and perks can’t make up for years of exhaustion and stress.

When your culture is weak from the beginning, it shows signs of wear and tear as you try to accelerate the growth of your business. In the case of Wells Fargo and Bank of America, both banks focused on building profit and growing their bottom line, sacrificing culture in the process. When you treat your culture like any other business asset and take the time to strengthen it, culture acts as the backbone that keeps your company together through all the tough times.

On the complete flip side of the culture spectrum is an online shoe company that sets the bar for a happy, engaging workplace. Zappos is known for its outstanding company culture, which has helped the shoe company amass $1 billion in revenue year over year. Despite selling shoes, every member of the Zappos team is committed to “delivering wow” and the company is seriously devoted to serving their local communities too. Zappos also formalized their culture into 10 core values that a CEO or manager can align his company around.

With an established set of values in place, companies can look to hire the right people for your culture. Hiring employees who believe in your values increases retention rates and can help you scale your company as revenue pours in. When used properly, values can create opportunities for growth and differentiate your business from your competitors.

Building a business that lasts for years depends on more than just money - you need employees who are willing to stay and work for you in order to keep your company running. But measuring the ROI of your culture is difficult. Managers need to track intangibles like employee happiness and customer delight in order to determine if their investment is paying off. Finding strong indicators of things like employee engagement can be tough, but look at data surrounding participation rates, turnover percentages and benefits usage to determine if your employees are looking to leave or stay. The higher your turnover rate is, the more money you need to invest with every new employee you need to train. You also waste resources and time during the hiring process, when you could instead be using that capital to fuel new innovations.

Companies around the world are faced with low employee engagement, which in turn negatively impacts your team’s ability to perform. Only 13% of the global workforce considers themselves to be “highly engaged”, suggesting there exists a lack of interest on the employer’s part to be invested in their employees. Sure, money can motivate your employees - but even that only works to a certain extent. Money as a motivation tool failed for the big banks. Employees are looking for something extra that cash can’t buy.

A strong cultural foundation is a lot like a foundation of a house. When your foundation is solid, it can support whatever grows on top of it for decades but when the foundation is weak from the start, it will cost you more money to replace and fix. As you build up your organization and identify aspects of your company to invest in, it’s important to pay attention and invest in your culture to ensure long-term sustainability and growth.

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