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Is working on your culture just about making your company a nice place to work, or is it really a financial issue? Can your culture actually make you money? You bet it can! Let's take a closer look at how and why this is true.

Here's a simple way to think of it: If you were to rate your people on a 1-10 scale in terms of how productive they were given their current level of talent and training, where would you put the average of your people? When I ask this question of most CEOs, I'll typically hear them say that the average might be a 6 or 7. Of course, some employees might be 10's and others 4's, but on average, they're probably in that 6 or 7 range.

Moving People Up The Scale

Now, if you had a way that you could somehow move everyone up a couple of notches on that scale, taking the 5's and getting them to 7, and taking the 7's and getting them to 9's, the difference would almost all drop to the bottom line. Your expenses wouldn't change, and so nearly all the increased productivity would translate into more profit! So what is it that most influences whether most people are working at a level of 5 or most are working at a level of 8?

Clearly there are lots of factors that influence their productivity - from their attitude, to their relationship with their supervisor, to how appreciated they feel, to how connected they feel, to their level of engagement, and more. Ultimately, I suggest that these are all aspects of your culture. Put those same employees into different cultures and they'll undoubtedly perform at different levels. So if you could intentionally create the culture that was more likely to cause your people to perform at higher levels, and with greater productivity, you'd be more likely to reach your goals and, ultimately, to make more money.

Other Financial Impacts

Of course there are many other ways in which your culture has financial impact as well. For example, how much money does it save to reduce unwanted employee turnover? There's recruiting cost, training cost, reduced productivity, etc. Highly engaged employees working in a high performing culture are more likely to sell more, deliver better customer service, produce higher quality work, and solve problems faster and more effectively.

All of these factors directly impact the bottom line.

In my experience, too many companies see culture as largely the domain of the HR department rather than seeing it as a strategic and financial topic. World-class companies, though, are different. They understand just how critical their culture is to their success and so they're incredibly intentional, purposeful, and systematic about how they author, create, and drive their cultures.


Larry Hart

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