Gone are the days of long work hours isolated in cubicles, creating reports for distant managers. Instead, with the unemployment rate at 3.7%, employees have the power to demand more fulfilling conditions.
With employees in power, many businesses are now catering to their workers with the same attention that they afford to their customers. As they do, organizations hope to attract the best hires, as well as increase employee happiness, engagement, and tenure.
Although some business leaders may find focusing on employees instead of customers to be counter-intuitive, in fact, there are plenty of compelling reasons to develop a company’s culture. But, before getting to those, let’s first understand what corporate culture is.
Defining Corporate Culture
When thinking of corporate culture, many imagine an office with modern furnishings, stocked kitchens, and employee happy hours. While these can be important elements, the concept runs deeper than that.
Put simply, corporate culture refers to the overall personality of a company, which consists of the values, attitudes, norms, and beliefs that employees share. Corporate culture is also rooted in the organization’s mission, vision, strategies, and structure, as well as its customers, investors, and community.
Overall, it directly informs how open, creative, and engaged employees feel while at work. Are they free to decorate their own desks like at Zappos, or explore their own interests like at Google? Or do they feel apathetic, fearful, and insignificant, like a small cog in a much larger machine?
While this is all great to consider from an ethics point of view, you’re probably wondering how it affects the bottom line.
The Case for Corporate Culture
As the great leadership guru, Simon Sinek, once said, “Customers will never love a company until the employees love it first.”
Recent research reveals just how true this statement is. Studies show that disengaged workers reduce total U.S. economic performance by about $550 billion each year.
In contrast, happy workers are 31% more productive and make 37% more sales than average, leading to greater profitability and less job turnover. For these reasons, it’s clear why companies with happier employees consistently rank above industry benchmarks.
With all these statistics in mind, it’s easy to see how important corporate culture is. Unfortunately, though, many businesses are quite far behind in this area.
The Current State of Employee Engagement
Did you know that about two-thirds of the world’s workforce is disengaged at work? Beyond that only 13% report being actively engaged with what they do. In addition to this, two thirds of workers are burned out, and one third are highly stressed.
These stress levels will lead many employees to leave their job if a better offer arises. This is illustrated by the fact that many people who are actively looking for new positions say that company culture is the main reason.
Despite these troubling numbers, through proper investment and leadership, it is possible to turn a company’s culture around.
Improving Corporate Culture: A Top-Down Approach
Strong leaders build strong cultures. From Bill Gates to Steve Jobs to Jeff Bezos, we can see how the spirit of a leader is imbued into their followers, creating solid companies on all levels. Because of this, when it comes to improving corporate culture, a top-down approach is essential.
We can see this axiom ringing true across many examples of corporate cultures. For instance, in the infamous case of the accounting firm Arthur Andersen, capricious leadership took the company from prosperity to bankruptcy as greed infected the entire organization. However, on the other hand, Zappos, a business with a CEO who prioritizes culture, has enjoyed sustained success over the years.
In addition to this, Google, a company that invested more in employee support, enjoyed a 37% increase in employee satisfaction.
Putting Everything Into Practice
In order to mirror these successes, leaders must first consider the traits that would define their ideal corporate culture. Some of these traits might include encouraging openness, creativity, flexibility, and self-starting. After that, they must work to imbibe those traits themselves. If done correctly, the qualities of the leader will permeate through the entire company.
If the CEO is too busy to develop culture, bringing on a Chief Culture Officer can be key in this endeavor. They will create a long-term cultural plan for the organization that aligns seamlessly with its mission and customers. After that, they will work with all levels of the company in order to implement it.
Another important tip for improving corporate culture is hiring individuals who will add value to your culture. All too often do companies bring on people who fit into their existing status-quo, rather than looking for those who will add important new dimensions. In doing so, their office dynamics remain stagnant rather than naturally evolving.
Finally, when developing your company’s culture, it’s important to always have an eye on new benefits or work-life arrangements that will attract top employees.
The Future of Corporate Culture
Millennials often get a bad reputation for shaking up the status quo. However, having grown up with events such as 9/11, the Great Recession, and climate change, it’s no surprise why they don’t seem to trust traditional social structures. So, as this group steadily grows to dominate the workforce, we can certainly expect their ideas to shape the future of corporate culture.
One of the major shifts that millennials are pushing for is flexible work options. In fact, almost 80% of millennials say that they would be more loyal to their employer if they were given flexible work hours. With so much new technology being developed to streamline remote work, it’s clear that this will become a norm in the future.
Furthermore, it’s also easy to see that millennials won’t tolerate stagnation in their careers, so another key cultural change we can expect this generation to champion is increased opportunities for self-improvement and career advancement. This may come in the form of increased feedback from higher-ups or from career training opportunities.
Other advents that will likely characterize the future of corporate culture are increased transparency, a better work-life balance, and more focus on diversity and inclusion. However, beyond these, culture will likely continue to evolve in ways that nobody can predict.
So, for now, it’s best to make a plan and hit the ground running. After that, rather than getting lost in the disruption, your company will be in a much better position to adapt to the changing tides of culture.
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This blog was originally drafted by Executives Unlimited.
Executives Unlimited serves a global roster of clients ranging from entrepreneurial middle market companies to billion-dollar multinational corporations, both publicly and privately held, as well as nonprofits.
With offices in California, Utah, New Jersey and Connecticut, Executives Unlimited provides clients with a nationwide perspective of well-qualified candidates for upper management positions including Presidents, Vice Presidents, Chief Executive Officers, Chief Financial Officers, Chief Operational Officers, Directors, General Managers, and Interim Executives.