Understanding the art and science of business culture is the key to success. Business culture is unique to every organization and can be seen in the actions and behaviors of every employee; it incorporates all of an organization’s attitudes and attributes. Investing in business culture is the key to success. John Kotter conducted a decade-long study that focused on firms that had a strong focus on corporate culture. By the end of the study, there was a 685% increase in revenue, 901% increase in stock price, 756% increase in net income, and a 282% increase in job growth.
Focusing on cultural transformation can bring big rewards. After just five years of centering efforts on company culture, an 85% net profit increase was reported, and after just 3 years, a 25% increase in workforce growth was reported as well. Cultural transformation can also bring a 50-point increase in employee engagement, which brings its own rewards. In 2020 alone, 85% of employees are not engaged, creating $7 trillion in lost productivity. Increased engagement brings higher productivity, higher customer ratings, higher profitability, and higher sales.
In the current day and age, employees care about culture, meaning, and motivation. Millennials and Gen Z expect their work to help meet societal needs, and 1 in 3 employees say the primary reason they stay at their current job is that they find the work meaningful. When work is tied to a person’s values it incites inspiration and innovation, raises motivation and productivity, and increases employee engagement. Employing meaningful work is the difference between an employee who actively erodes company culture and one who works hard to improve the organization.
Cultural transformation means a variety of things. Aligning employee desires and business strategy, instilling a compelling vision for the future, and rallying support through active communication are all important in cultural transformation. While a positive outcome is expected from all digital transformation efforts, barely 1 in 8 are successful. A poor corporate culture can make employees unwilling to buy into their organization’s transformation efforts.
Employees resist culture change for a variety of reasons. A few important reasons include lack of trust, feeling overburdened, rules and roadblocks, skills gaps, and the fear of job loss. If past efforts to modify company culture have failed, this can compromise employee trust and morale. Additionally, change often brings a slew of new responsibilities, which can spark worries that employees will face more work with no reward. Employees are unlikely to embrace changes to rules and procedures, especially if they have been reprimanded for them in the past. New technology can expose employees who lack the necessary skills, prompting the fear of job loss, and a history of failed projects that have resulted in restructuring and job losses may make employees feel at risk as well.
Give your employees the tools to invest in business and culture transformation. Cultural transformation investments that matter include defining a single strategic imperative to focus your efforts, establishing a compelling vision for the future, equipping your workforce with the skills needed to meet your vision, aligning organization and job functions to the vision, and ensuring reward systems align with your vision. It’s time to level up your culture and create value.