Getting a good return on any investment is hard, but I’ve found that senior leaders really struggle when it comes to investments in their organization’s culture. According to a recent report by Gartner, only 30% feel that they have the right culture, despite spending an average of $2,200 per employee. When we look at the big picture, this means that almost $230 billion is spent in the US, and a further £55 billion in the UK. That’s a lot to spend on ‘struggle’, and only a ‘maybe’ to show for it.
This shows us two things: the first is that people recognize that culture is enormously important to companies now (yay!). It also shows that more companies recognize that the right culture increases productivity and reduces the spending on recruitment.
But when we look at how senior leaders are spending the money, it shows the mindset behind the investment. Because businesses are used to linear thinking, investment in recruitment is easier to justify because the result is a new person physically joining the organization.
The equation is simple: $ spent = new employee.
But with creating the “right culture” the equation becomes vastly more complicated. Suddenly throwing money at one-off remedies like consultants, or annual surveys seems to yield ambiguous results.
What I’ve found is that it’s not so much about money, it’s about embedding good practices into people’s regular working lives. As one our clients likes to say, “It isn’t magic. It’s about consistency.”
And that’s the real secret behind improving culture — consistency of leadership and messaging.
It doesn’t help if senior leaders say on the one hand that their people’s wellbeing is important to them and on the other hand drive projects through with fierce deadlines and overwhelming pressure. Their employees simply won’t believe them — the Gartner report is further proof of it, suggesting that 69% of employees do not believe in their organization’s definition of their culture.
There is a massive gap between the idea (and ideal) of culture and the experience of it.
So how does a company close this gap and invest its money more wisely in company culture?
I like to think of it in three ways:
- Recognize that a good culture is built by consistently applying good practice at all levels of the organization.
- Define what good practice looks like and set up processes that support everyone in the organization to consistently put it into practice.
- It all starts at the team level — they are the vehicle for positive change.
I founded Friday Pulse because I believe a good culture is positive and productive. The foundations are built upon happy high-performing teams – where people work well together. There will inevitably be ups and downs, but in this environment, teams are able to bounce back very quickly from any setbacks.
Changing culture starts at the team level. One mistake that senior leaders often make is thinking that their organisation has just one culture — one that they can define from the top. But culture can be malleable, the by-product of actions and behaviours. Our data has shown that an organisation is, in fact, made up of lots of micro-cultures. If you think about your own workplace, this isn’t too surprising. Each team reacts differently to its challenges and is made of different personalities.
Team leaders need to be able to have authentic and honest conversations with their team members on a regular basis. At Friday Pulse, we suggest that they take time every week to recognise each other’s successes and achievements as well as appreciating the support that they give each other. Too often in a fast-moving world of work we lurch from one challenge to the next without taking a moment to recognise our achievements.
Just as important as celebrating is allowing employees to voice any concerns or frustrations that they have. If these are caught early, then they can often be addressed straight away and not be allowed to fester and grow into a resentment – as my grandmother used to say, “A stich in time saves nine (and million pounds in engagement surveys and consultant fees).” Again, this is a question of consistency and regular conversations.
The real investment is just 15-20 minutes a week that can pay huge dividends. For example, we know from longitudinal client data (gathered over several years) that a small increase in team happiness can lead to a 17% fall in staff turnover and a 7% increase in productivity. Just these two tangible benefits translate into an immediate 6x return on investment.
So, yes, your organisation’s culture does matter.
But it doesn’t need to be hard or cost prohibitive to make a positive change – you just need to be consistent and make improving culture everyone’s goal.