Leadership Lens: Company culture: cost or contributor

If you are honest and ask the question: is the culture in your organisation costing the company money or is it contributing to the bottom line? What would be your answer?

“Company culture: cost or contributor?” makes senior executives rethink organisational culture in their business strategy. It challenges the idea that a healthy, inclusive, and dynamic business culture is just a cost and instead suggests that in fact it can help an organisation succeed. By viewing culture as a resource rather than a liability, the statement urges us to consider how good cultural practices may indeed increase innovation, employee engagement, and competitiveness.

It’s a little like investing in one’s education. It can be costly and time-consuming, but the knowledge, skills, and networks acquired can significantly enhance one’s performance and earning potential. Similarly, investing in company culture develops team members in ways that promote innovation, collaboration, and loyalty, consequently contributing to the organization’s performance and financial success.

Take care of your employees, and they’ll take care of your business. It’s as simple as that.

Gallup’s Meta-Analysis on Employee Engagement is widely acknowledged as one of the most influential studies on the impact of workplace culture. It demonstrates that without a strong company culture, organisations might lose money. Employee engagement has been acknowledged as a key driver of growth for some years. The study examines the relationship between engagement and outcomes.

It compiles data from 112,312 business/work units and more than 2.7 million employees in 54 industries and 96 countries. Gallup discovered that units in the top quartile of employee engagement outperformed units in the lowest quartile by 23% in profitability, 18% in sales productivity, and notably lower turnover rates.

This study emphasises the direct link between a positive, engaging corporate culture and important financial outcomes.

The relationship between Engagement at Work and Organisational Outcomes

  • 100k business/work units
  • Over 2.7 million employees
  • 54 industries
  • 96 countries

Top quartile of employee engagement:

23% high profitability

18% high sales productivity

Up to 54% lower turnover

I spoke about this research at a webcast this week. Click here to watch the recording.

A famous success story

Zappos, an online shoe and clothes shop bought by Amazon, has become a standout case study for using company culture as a primary driver of revenue and business growth. Tony Hsieh, the firm’s creator, believed that having an extraordinary company culture may provide a competitive edge, thus he focused on developing a culture that prioritised customer care over all else.

Zappos’ Key Strategies and Outcomes:

  1. Customer-Centric Culture: Zappos built its company culture around the goal of providing the best customer service possible. This included offering free shipping both ways, a 365-day return policy, and a call center where employees are encouraged to go above and beyond to make customers happy.
  2. Employee Engagement: Zappos invested heavily in employee satisfaction, believing happy employees would lead to happy customers. This included creating a fun and inclusive work environment and providing extensive training and development opportunities.
  3. Financial Success: This focus on culture and customer service has paid off financially. Zappos grew from almost no sales to over $1 billion in gross merchandise sales in less than ten years, a milestone reached before its acquisition by Amazon in 2009.

Company Culture can cost or contribute.
it’s up to you.

Jessica Schubert

Jessica Schubert is a Leadership Expert, Executive Coach, Facilitator, Author and Speaker. She is obsessed with helping people realise their potential and unlock their inner genius.

Born in Cologne, Germany, Jessica has travelled the world and has spent more than 20 years leading cross-cultural teams in competitive markets throughout Europe and the Asia Pacific. As she worked with and coached her own diverse, cross-cultural teams, she came to realise that learning about yourself and developing interpersonal skills is the most powerful tool to lead and influence people around you.

In 2013 she launched Intact Teams, where she and her team have worked with thousands of leaders in organisations worldwide, delivering custom-designed leadership programs and workshops. These interactive and engaging programs are offered both virtually and in-person, helping leaders and their teams succeed in a complex and ever-changing business environment.

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Jessica Schubert