Scott Johnson is the Founder and CEO of a leading employee engagement and recognition software, Motivosity.
When you look at the research conducted on the most successful workplaces, here’s what you’ll learn: Investing in culture is a no-brainer. Studies have consistently shown that a strong culture can help build resilient teams, bring in top talent and even boost revenue.
I can’t imagine a world where a CEO doesn’t want to see that type of growth happening in their organization. But, as with any investment, building a successful workplace culture requires a solid strategy.
In fact, I find that taking the wrong approach to building culture can be worse than doing nothing at all. CEOs looking for a healthy ROI will likely be more successful if they consider these core concepts:
1. Shift from cutting back to building up.
While CEOs are often laser-focused on encouraging growth in their organizations, their approach to building culture can often be driven by a desire to cut back. Rather than make authentic investments in culture, I see how CEOs (and CFOs) often look at this as an excuse to reduce expenses.
For example, by providing a wellness program, the company can reduce insurance premiums while pretending to care about the team. This type of “investment” has nothing to do with company culture or employee experience. I believe that employees can see right through this facade and such initiatives will then have little impact on how top talent feels about the work environment.
The problem is that you’re trying to take a shortcut; it’s an inauthentic catalyst for building a great culture. Rather than building morale and engagement, it can instead lead to skepticism and mistrust. In more extreme circumstances, it can even tip the scales toward toxicity, potentially costing companies a lot of money.
A better approach for a CEO is to consider the things that a strong culture can grow—like employee loyalty. A recent study found that pay is the top reason people leave their job, but the second reason? Workplace culture. In that same study, 33% of employees said culture was their primary reason for leaving.
Along with employee loyalty, a strong culture can also increase customer loyalty. One source reported that in companies where culture drives strong engagement experience, customer loyalty rates are 233% higher than those without. Whether your greatest need is better talent or better revenue, I believe that investing in culture is the best way to fulfill it.
2. Invest in the right elements.
Company picnics, holiday events and retirement parties are all great, but they’re not cornerstones for building a great culture. In fact, it’s not even the CEO who is responsible for building that culture.
Companies that mistakenly think the CEO drives culture top-down usually fail at building a great one. Rather, the CEO is responsible for investing in a framework that empowers every employee to amplify their unique culture. But they are not going to do this top-down. The CEO can promote a culture of gratitude and public recognition and then empower everyone to participate. When this happens, things really change.
Establishing a great culture involves inspiring strong connections between employees. Engagement grows when employees feel connected to their peers and the organizations. A powerful way to create connections between team members is to be intentional about and leverage corporate values.
Values are a central building block of culture. Your organization’s shared values determine how people engage, how decisions are made and what is seen as a priority. Putting resources behind initiatives that promote company values helps strengthen the culture and solidifies the employees’ connection with the mission and with each other.
Make sure you’re also intentional about the relationship between manager and employees. I find this to be a key part of a work culture that includes high engagement and low turnover. Investing in culture means giving managers the tools they need to support their team members’ development. When managers are equipped to maintain an environment of accountability, motivate team members and build meaningful relationships, they can better contribute to the development of an outstanding culture.
It’s also important to keep in mind that, like most investments, consistency is key to effectively investing in company culture. Once you start working on company culture, you can’t stop in the middle; the only authentic commitment is a long-term one.
3. Identify meaningful metrics.
In the end, you’ll want some proof that your investment in culture has paid off. There are many metrics you can look to for confirmation, such as employee engagement, customer loyalty and revenue growth.
One important metric in today’s business world that reveals the value of culture is the employee retention rate. As culture deteriorates, employees are quick to look elsewhere for jobs. In fact, one study found that employees are even willing to take a pay cut to work at a company with a better culture.
If you really want to know if you have developed a culture that pays dividends, ask yourself questions like, “Did any of my employees take a pay cut to come and work for me?” If you can answer yes, then you are seeing a healthy ROI. If not, you can probably do better.
There’s no single tactic that will completely solve the culture within an organization. But if leaders make a commitment and pull the right levers—authenticity, gratitude, values, connection and manager development—then I think you’re likely to see the impact in the numbers. More importantly, you’ll feel the impact this has on your employees’ efforts and attitudes.
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