While I was waiting on a delayed flight at the airport last week, a stranger sitting next to me made things more interesting by starting up a conversation with an intriguing question. His question to me went like this:
I busted my ass this week checking out installations for my company all over town, and I even drove to one place I heard about that wasn’t even on the list they gave me. The problem is that while I was at this place, I was in a hurry and accidentally locked the keys in the rental car, and they charged me an extra $100 to come unlock it. Do you think that I should submit this extra charge as a business expense to my company or cover it myself?
A number of responses came to mind, including, why are you asking me—a stranger—for my opinion. But, here is a summary of some of the thoughts that I shared with him.
This is a good question and the answer depends on what your company values more – corporate profits or corporate culture.
A profit-driven company might not want to reimburse this expense because it could have been avoided. A company more focused on building a strong culture and loyalty among its employees, however,might agree to reimburse the expense and praise you for going the extra mile to check out an installation that was not on your list.
This airport conversation brought home the importance of company culture, and we are going to devote the next three posts to this subject. This post, Part 1, considers the the extent to which a company’s culture contributes to its success or plays a role in its struggles. Part 2 reviews some specific steps that business owners can take to develop a positive culture that will enhance the company both internally and externally. Part 3 will identify a number of companies noted for their positive culture and discuss how their culture contributed to their success.
Generating Profits Does Not Equal Successful Culture
By nature, successful business owners are creative, motivated, and focused on how to make their companies profitable. Reaching profitability is a laudable business achievement, but profitability does not guarantee sustainability. It is one thing for a company to be in the black, but quite another to govern the company in a way that transforms profits into long-term success.Visionary business owners need to generate profits and also create an enduring culture if they want their companies to thrive rather than merely survive.
A useful metaphor here is to think of profits like food and water. Without these basics of life, we cannot survive. Yet, if we only have enough of the basics to sustain ourselves, there is no quality of life. When we add purpose, community, and culture to our existence, we make for ourselves a life that is worth living.
Company Culture – A Critical Building Block to Long-Term Success
Company owners who focus solely on business metrics such as cost structure, R&D, and beating the competition will become distressed when investors turn away from the business, key employees depart, and customers leave due to a flawed corporate culture that is too late to change. The benefits to establishing a positive company culture are many – a strong culture impacts employee morale, helps attract new employees and reduce turnover; it contributes to enhanced productivity and innovation; and it enables the company to foster and maintain relationships with business partners. As the business leaders and consultants quoted below emphasize, developing a positive company culture is an “off balance sheet asset” that has the potential to pay sizable dividends to company owners and stakeholders.
“Great workplaces with great corporate culture are more financially successful than their peers . . . our research has shown that great workplaces have lower voluntary turnover than their competitors, are able to find the best employees to fit their culture and needs, provide top quality customer service and create innovative products and services – all activities that contribute to their overall financial success.”
Michael Burchell, author of The Great Workplace – How to Build It, How to Keep it and Why it Matters, writing on Monster.com
“Building a strong culture may not guarantee business success, but neglecting it hinders a company’s chance for long-term sustainability. While ‘culture’ most likely won’t appear in your annual report, or as a line item on your balance sheet, it’s the glue that holds a great firm together. In reality, it’s one of the most impactful ‘hidden’ assets a business can hold.”
Marty Fukuda, Chief Operating Officer of N2 Publishing
“Company culture is more important than ever . . . . For the first time in history, millennials have become the largest generational cohort in the U.S. workplace with almost 54 million making up the labor force . . . HR leaders consider culture and engagement their number one challenge . . . it’s clear that in order to attract, retain and engage the modern work force, we need to focus on company culture.
Greg Besner, Founder and CEO of CultureIQ
“There is nothing more important than the culture of a business. A strong culture is not only a powerful magnet for talent, it is the single biggest driver of long-term business relationships.
Christoph Becker, CEO at gyro
In this new millennial age, fostering a positive culture has become critical to achieve and maintain business success. In our next Post, we will look at some of the building blocks that company owners have relied on to create powerful cultures that align with their business vision.