Culture is one of those things that can be hard to put a finger on. Some describe it as a warm and fuzzy, others describe it as sociability and solidarity, while others simply call it ‘the way things are done around here’. Whatever you call it, one can’t deny the impact culture can have an organisational performance
Culture is one of those things that can be hard to put a finger on. Some describe it as a warm and fuzzy, others describe it as sociability and solidarity, while others simply call it ‘the way things are done around here’. Whatever you call it, one can’t deny the impact culture can have on organisational performance. Culture is notoriously amorphous and one of the most intangible of measures, but it can have a profound impact upon the bottom line.
There has been much research into the link between financial performance and the intangible of culture. Culture is a key ingredient in how well regarded companies are to work for by their people. Research from Hewitt Associates has found that those organisations named in their Best Employers study record nearly double digit growth compared to other organisations. Not only that, but they also boast average profit growth of 21 per cent, compared to just 12 per cent for other organisations.
Over the past few years I’ve had many opportunities to visit organisations considered employers of choice and which stand out in the area of culture. It’s always interesting to get an inside look at how people feel working for these organisations and measure that against the ‘vibe’ as one walks the floor. There’s inevitably a link between the two, and consequently organisational performance. So why is it so hard for management to get it?
As Yahoo!’s chief of people, Libby Sartain has observed, a company’s culture is born out of a business founder’s own personal set of values, beliefs and behaviours, which shape the initial work environment. A culture evolves out of this rather than being a deliberate creation.
This is why many of those in the Best Employers study are often small to medium size firms – it’s much easier to pin down culture when organisations are at this size. However, big employers are beginning to cotton on. Lion Nathan is one notable company at the forefront that has proven a demonstrable link between culture change and profit, and other companies such as ANZ at St.George Bank have also been making a concerted effort to initiate culture change over the past few years.
Yes, it does takes time and leadership from the top to effect culture change, but as those with great cultures have shown, the results are well and truly worth it.
