Company culture is the key to performance. 72% of company executives agree with this statement, yet only 32% believe their company culture is aligned with its business strategies. Investing in your organization’s culture can lead to a lot of rewards. According to a decade-long study conducted by John Kotter, firms that had a strong focus on corporate culture saw massive increases in job growth, net income, stock price, and revenue. Additionally, companies that focused on cultural transformation saw an 85% net profit increase after 5 years and a 25% increase in workforce growth in 3.
[soros]Q1 2021 hedge fund letters, conferences and more
Increase Employee Engagement By Transforming Your Company Culture
Focusing on cultural transformation can also lead to a 50-point increase in employee engagement. Increased engagement brings higher productivity, sales, customer ratings, and profitability. In the year 2020 alone, $7 trillion was generated in lost productivity because 85% of employees were not engaged. Employees care about culture and meaning; meaningful work is the difference between an employee who wears down company culture and one who works to better the organization.
Company culture includes all of an organization’s attitudes, ideas, and attributes and is shown in the actions and behaviors of every employee. Culture transformation for a business means aligning employee desires with business goals, instilling a compelling vision for the future, and garnering support through active communication. While a positive outcome is expected from all digital transformation efforts, less than 15% are successful.
Cultural Issues Hinder Value Creation
Why do employees resist culture change? Poor corporate culture can make employees unwilling to buy into transformation efforts. 57% of private equity dealmakers say cultural issues hinder value creation. If past efforts to change have failed, this can have unintended consequences, compromising employee trust. A new technology that exposes employees who lack the necessary skills can also prompt the fear of job loss. Additionally, rules and procedure changes, fear of job loss, and feeling overburdened are all other reasons why employees may be wary of culture change.
Before investing in culture change, it is important to ask whether there is a leadership program that fosters the right values and whether the company’s culture unleashes employees’ passions. Additionally, asking whether rewards align with vision fulfillment and if communication systems foster effective collaboration is important information to know. Culture transformations that matter include defining a single strategic imperative to focus company efforts, establishing a compelling vision, equipping your workforce with the necessary skills, and aligning job functions to the company vision. Go forward and provide companies with the tools necessary to invest in a business and cultural transformation.
Infographic source: Ascensionts
