How Workplace Culture Effects Business Success

How workplace culture affects business success

Companies succeed in the short run just by having good products, even with unethical practices and abusive employee behavior.  The problem is, things change. A competitor comes into the market offering your products but has better workplace conditions.  Now your employees want to work there. Or, one of your employees becomes disgruntled over how they are treated by an abusive employee or supervisor and decides to hire an attorney.  You settle with them to avoid having your poor management practices publicized $10,000 to 50,000 from the bottom line. Another change scenario is that you begin to hire generation X and Y employees.  They will quickly tire of your poor practices. When word gets around that you pay little attention to this Gen X and Gen Y will not apply.  Finally, if you operate without a code of ethics or values your workplace is driven by supervisor and employee personal values.  Add aggressive goals and tactics and you have News of the World and ENRON.

Best workplace culture example

Well known examples where a sustained company culture has clearly served financial success are Google, Zappos and Netflix. Zappos CEO, Tony Hsieh tells of both the company hiring practices aimed at finding candidates who fit with the company values and a new employee orientation process that quickly identifies workers who are a poor fit. In a key-note at this year’s SHRM annual conference that Company culture is the “number one priority.” His most recent blog post says it all Your Culture Is Your Brand.

Zappos has cultivated standards for workplace atmosphere that support staff efforts towards company goals, encouraged the atmosphere with company mechanisms (meetings, communication, compensation and performance evaluation), controlled that new employees coming in fit well with the desired culture and then, when employees demonstrate that they don’t fit well, they are moved out of the organization. The theory is that employees working there thrive in the culture.  They are happy, satisfied and fulfilled. As HR folks say, less bad turnover, only good turnover.

It’s in the literature

There are a number of excellent books on the subject of Culture – discussing what it is; how to get it; and why it supports success.  Here’s just what I have on my own bookshelf:

1964 (Blake & Mouton) The Managerial Grid that urged managers to focus on both people and results – used to acculturate me at UNUM in the mid 70s;

1982 (Peters & Waterman) In Search of Excellence in which the principles of “Back to the Basics” reinforces the simultaneous priorities that must be balanced;

2001 (Collins) Good to Great describing the “culture of discipline” in order to avoid creativity-killing bureaucracy;

2001 (Ashby & Pell) Embracing Excellence chapter two: The “qualities and characteristics of a great corporate culture;”

2002 Hesselbein & Johnston) On High Performance Organizations in which the authors discuss the power of mindfulness, a passion for the business and strategic generosity;

2011 (Rhoades) Built on Values: success stories of three companies who had purposeful workplace culture and values;

It’s what employees want and need to be healthy and productive at work

Happy, satisfied employees are less distracted and more focused on company goals.  It happens that the characteristics employees find supportive, collectively represent the kind of environment in which company financial goals are more likely to be met.  This would be where employees are treated with respect; given clear direction about  their work; compensated fairly, etc.  Finally, why in the world would anyone choose to create or work in a company where everyone is burned out, unhappy and disrespectful to each other? It stands to reason that employees who feel a passion for their work; who are rewarded for both results and demonstrating company values; and treated respectfully by supervisors and co-workers would reach a higher level of functioning.

Good employees want goals to meet and welcome being held accountable. Further, they want others to be held to an equitable standard.  Nothing irritates employees more than watching poor performers hanging around, making mistakes, failing to plan and generally making more work for others with no apparent consequences.  Thoughtful, respectful feedback to employees by capable supervisors greatly increase the chances that most employees are performing at their highest functioning level.

Unrealized, disorganized or person-centered culture

When the company’s culture is not unified/strong or it’s tied too closely to one leader’s own style the workplace can be buffeted by CEO or COO turnover.  Companies who don’t pay attention to defining a desired culture end up depending too much upon the personal style and philosophy of a particular person.  When this leader leaves and a new leader comes on board, the values and philosophies of the new leader challenges long-standing company assumptions. A period of confusion commences. Employees are distracted trying to understand the new landscape.  And again, employees are not necessarily focused on the bottom line. A strong, positive and institutionalized workplace culture can help an organization weather many storms, including the loss of a beloved leader or changes in the external environment because strong positive culture takes on a power and force of its own.

One of today’s growing employee relations issues is stress.  Workplace characteristics of lean staffing, financial pressure and high demands result in employee fatigue and stress. These in turn cause absenteeism (missing work) and presenteeism (workers present but not mentally at work).  Rates of depression (or rates of its diagnosis) among employees are on the rise.  Interestingly, employees report inattentive and poor quality management at work as a key reason for both stress and eventually leaving their position.  These problems develop over time and the only way to reverse this is to assess your culture and decide to do things differently – culture improvement project.

Honesty, Ethics and Integrity

A discussion of ethics and integrity is important enough to mention it more than once. Most superb, financially successful companies who are well-respected in their community, the U.S. or the world promote honesty, integrity or lawfulness as one of their core values.  Without a stated value which is reinforced by company structures, it is difficult to get large numbers of employees to approach their work consistently with these values. Most experts feel that it was the absence of this particular set of values that sunk ENRON and pulled its accounting firm, employees and the local economy down with it. It also sent a few folks to jail.

Next steps

After realizing that you have no stated culture or workplace brand attention turns to articulating a desired brand.  This starts with understanding what your good performers want and need. Recruitment, Workplace Branding and Employee Satisfaction

Contact the author with questions or comments.
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