How Company Culture is Killing Business Growth
Whenever I discuss company culture with people it’s typically seen as the ‘fluffy stuff’ that doesn’t truly make a significant impact on the overall business – there is rarely a connection made between culture and business growth, let alone profit.
Instead, many businesses prefer to look outward for growth, rather than having a good solid look on the inside.
I see it every time. When a leader decides they want to grow the business there’s a surge to gain more business and bring in bigger profits. Because surely, it’s the money that makes it all take-off?
But while money certainly makes the world go round, it doesn’t fix all the problems.
Research continues to show that company culture drives growth. In fact, Forbes reported that businesses with strong company culture saw a 4% increase in profits.
Don’t believe it? – Read the following references and you may be surprised to find how much company culture interlinks with growth.
Because the processes are impractical
It’s funny that when many people think of processes, they think of red tape and control.
This is definitely the case for most traditional business processes. They’re so entangled in control, and permission led, that even getting the smallest thing done can take hours.
Take for example, a customer complaint. On a recent culture audit, I watched as an employee took a customer complaint, but had to wait five hours to resolve it because she didn’t have the permission to do what was needed to make the customer happy.
This was processes gone mad.
Not only did the employee know how to resolve the issue, but due to the process that was in place she was not allowed to act, and had to wait for a manager to sign it off.
Five hours were lost that day due to impractical processes, and a customer complaint turned into a customer loss because they were shocked that something so simple could not be resolved quickly.
Processes are what defines the culture and enables employees to make the decisions necessary to carry out the company’s mission.
It shouldn’t be about restricting responsibility and governing, processes should allow employees to make the best decision for the business.
Because people are leaving
When an employee leaves the business it should be an ideal opportunity to learn more about the company culture and why it didn’t serve them?
According to Columbia University, when a company has a poor culture, 48.4% of employees begin looking for a new job.
I’m sure this doesn’t surprise many people, yet businesses are still reluctant to invest in their company culture? – The math doesn’t add up!
Do we lose our senses when we enter leadership, or does the ego blind us?
Any smart business leader will know that a company culture affects the way people feel, which in turn affects how productive and creative they are.
Your company culture could be the very thing that is pushing people out of the door.
Because it’s not attracting new talent
On the flip side of people leaving, is the worrying situation of not being able to attract great talent.
If your company has got a reputation of being a poor employer, it will not fare you well if you’re looking to grow.
In a recent study by Deloitte, 88% of employees believe a distinct workplace culture is important. Which means investing in a strong company culture has never been so paramount in being able to secure talent.
The workplace landscape has dramatically changed over the past decade, and you need to ensure that your company culture now aligns with a generation who value experience and lifestyle over money.