There is much talk currently about culture in companies. Whether culture is done by design or simply allowed to evolve, it will have an impact on the engagement, behaviors and norms followed by people working at the company.
Company culture – a set of behaviors expected and adhered to by most of the people working there most of the time – will either help or hinder the success of the enterprise in one way or another. There is plenty of good research out there regarding this topic; unfortunately, much of it is ignored or dismissed by leaders who see culture as “soft” or irrelevant to business goals or too difficult to manage.
Company culture can in fact be communicated, managed, taught, learned, encouraged, reinforced, and demonstrated. It can be designed to be a catalyst for the enterprise to succeed and to engage the workforce in the business of the enterprise. There is also plenty of research and data out there that identifies cultures that are more likely to result in engaged workers. Those workers produce better quality outcomes and financial results than unengaged workers.
In a Gallop Meta Study, they found that companies with highly engaged workers were 21% more profitable, had 41% lower absenteeism, better retention, lower costs on rehiring for the same roles over and over with an average cost of $6k per new hire. So, what kind of culture can help workers be more engaged?
Here are some aspects of company culture that is likely to lead to engaged workers:
Transparency and Communication
Leaders, managers and teams communicate frequently and candidly about what is happening in the business, workplace and the work. How is the company doing, what are the key priorities, what changes may be coming, how can we do our work more efficiently and effectively, what problems do the team face in doing the work. The cultural aspect here is open and candid communication. Rather than them and us, the mantra is we are all in this enterprise together.
Empowerment, Ownership and Support
Encourage and expect the teams to identify opportunities and problems in the work process. Expect them to address them without instruction and own their work and their processes. Provide the resources and training to encourage teams to act and innovate. Recognize and reward the teams as they improve the process or product through this process. The cultural aspect here is that the team feel they own the work – TRUST – and can innovate and address the work. No need for a “font of all knowledge” manager to instruct every single aspect, rather one that can support, take part and provide resources.
Experiments, Errors and Success
Working in concert with the above, allowance for experiments and failures has to be part of an empowered culture. If there is no tolerance of failures, there will be no innovations and workers who are unlikely to step out to try new solutions. Intolerance of errors or failures lead to very bureaucratic and punitive cultures where things move very slowly and are triple checked in case mistakes are made. The cultural aspect is to encourage experiments and see failures as the path to success, all within the scope of the work.
Structured On-the-Job Training and ongoing Learning and Development
Companies that invest in training and development do much better than companies who fail to invest. According to industry research, 42% of hired employees, when choosing a job, perceive the opportunity to learn and develop within the company as a convincing advantage. According to the Association for
Talent Development (ATD), companies that offer comprehensive training programs have 218% higher income per employee than companies without formalized training. But it doesn’t stop there. These companies also enjoy a 24% higher profit margin than those who spend less on training. It would seem that continuing to invest in training and development, even when there are economic downturns, is the smart play. The cultural aspect here is continuous learning and development – learning to develop oneself and the company results at the same time.
Leadership together with input from workers and other stakeholders craft a strategy, as well as a business and culture vision for the enterprise. The role of the leader is to execute the strategy and grow the enterprise while managing and encouraging a culture of meeting business goals, transparency and
communication, empowerment, experimentation and continuous learning and improvement. Providing frameworks for action, emphasizing what is important, providing resources, making investments in people, lean process and equipment and recognizing by referring to current research and data are the ingredients needed to make the enterprise continuously successful. Leadership is critical to establishing and maintaining an empowered culture where people can own the work, innovate the work and be accountable for the work that will ultimately delight clients and bring them back to buy more.
My own experience of building a culture for success, in three different companies in three different industries, was that it worked very well. We moved from command and control to empowered and accountable, silos and fiefdoms to collegiate, low training investment to realistic training investments, optimizing poor process to leaning processes and providing culture of encouragement and trust with tools to underpin that, avoiding accusatory and punitive practices so often built into how companies operate. There are a raft of research and data, some mentioned here, that validates the empowering culture approach. At VMEC, we can help with aligning business strategy with company culture and working to have culture as a catalyst for business success.
Author: Patrick Boyle is the VMEC Center Director and CEO. Before joining VMEC, his most recent role was that of Senior Vice President and Chief Learning Officer at Underwriters Laboratories (UL) and prior to that, Patrick was President of the UL Knowledge Services Business, providing knowledge, education, training and advisory services to manufacturers around the world.