When it comes to company culture, the bottom line is that it directly affects an organization’s bottom line in at least three very expensive ways.
According to the Harvard Business Review, health care expenditures at high-pressure companies accrue nearly 50% more in health care costs than their more relaxed competitors. That adds up to an American Psychological Association-estimated $500 billion – and 550 million workdays – lost to workplace stress. If that’s not enough, 60%-80% of workplace accidents are also attributed to stress.
In addition to illness, poor company culture often results in disengaged employees – with costly consequences. Harvard Business Review cites studies proving that disengaged workers had 37% higher absenteeism, 49% more accidents, and 60% more errors and defects. Those grim statistics led to even grimmer ones: 18% lower productivity, 16% lower profitability, 37% lower job growth, and 65% lower share price over time. Finally, workplace stress causes a nearly 50% increase in employee turnover – at a cost of approximately 20% of the employee’s salary.
So how healthy is your company culture? And if you need a re-boot how can your get started? Take our Stout Culture Check and if your results need some polishing check our Stout Strategies for improvement below to see how you can improve your company’s environment and your bottom line.
:: Stout Culture Check ::
Run through the checklist below to see how many of the traits most associated with a positive company culture your company exhibits.
- Does your company:
- ▢ Focus On A Mission or Purpose
- A focused journey requires a destination. For organizations, a clearly defined and communicated purpose is that destination. That mission, if honored from the top down, becomes a compass point for a company’s strategy, capability and of course, culture.
- ▢ Communicate Effectively
- Dr. Michelle Rozen defines three distinct parts of effective communication. Clarity means that the message is succinct and easily understood. Courtesy means that the message is likely to be much better-received. And proactivity means positivity – by their very nature, proactive communications are focused on looking forward, not on things that have happened in the past.
- ▢ Operate With Transparency & Trust
- Secrets are the enemy of trust, and trust is the foundation for all healthy relationships. When management operates with maximum transparency, employees feel more confident in company leadership, and in return, perform at higher levels.
- ▢ Promote Teamwork
- Nothing poisons a culture more quickly that siloed departments who compete with each other for every resource and accolade. Organizations that take a “we not me” approach to work have a healthier company culture.
- ▢ Offer Support
- Giving – and receiving – clear, sensitive, productive feedback helps foster the ability to take risks and try new things. Management creating that kind of environment intrinsically encourages their employees to reach even greater levels of achievement.
- ▢ Encourage Engagement
- How much of themselves are your employees willing to invest in their jobs? As the research cited above indicates, organizations whose employees are fully engaged in their work boost their productivity, profits and safety.
- ▢ Invest In People
- Companies with a healthy culture have management that believes that employee growth means company growth. Investments can be in the form of time – engaging with employees at retreats, mentoring, etc. Monetary investment – in continuing education, raises, bonuses, paid sabbaticals and more – is the other half of the equation.
- ▢ Embrace diversity
- An environment truly welcome of diversity requires both tolerance and acceptance of differences. In healthy company cultures, those traits translate into openness to new ideas, procedures, structure and goals.
- ▢ Have Fun
- This doesn’t necessarily mean a 24-hour beer keg and flashy game room. But companies with strong positive cultures work and play well together.
:: Stout Strategies to improve any company culture ::
Step up your culture game with five Stout Strategies top companies use to create great work environments.
- Give your employees meaningful work by developing a clear organizational purpose
- Be clear and transparent in both word and deed.
- Encourage departmental and employee collaboration, not competition.
- Earn loyalty by providing opportunities for professional and financial growth.
- Provide timely, constructive feedback and honor ideas from all viewpoints.
To summarize, company culture counts. Investing in your organization’s culture is an investment in your organization itself. For another take on company culture, check out our article on analyzing a company’s culture and finding your best fit.