Every day we are faced with decisions at work about making investments or limiting expenses. Should I invest in this marketing campaign in the hopes that it will drive increased revenues? Should I downsize my workforce to reduce my payroll costs? Should I invest in training or should I cut the training budget?
When you consider your strategic plan, are you focused on investment or on expenses? Is your culture viewed as an asset or a liability?
The Cost of Dis-engagement
There are any number of research reports about the state of employee engagement. Most peg actively disengaged employees at approximately 20%. Gallup has done extensive research in this area and has found that the productivity loss due to this lack of engagement equates to 34% of their annual salary.
According to a recent Statistics Canada report the average Canadian salary in 2017 was just below $60,000. Now those of you who know that I come from an accounting background, will not be surprised that I love to play with numbers. So, if you have an organization of 250 employees with 20% of actively disengaged employees earning an average of $60,000 – this is costing you $1,000,000 a year. And this doesn’t even take into account those employees who are somewhere between actively engaged and actively disengaged.
What successful leaders are doing
When it comes to the math, companies who are managing their cultures are reaping the higher bottom line results. They get the numbers and they’re investing in their people. Instead of tweaking the various expense line items, they’re digging into the barriers in the way work gets done. They’re creating conditions that allow their people to do their very best work.
Tony Hsieh the founder of Zappo’s, Richard Branson of Virgin fame, Tobias Lutke at Shopify are just a few examples of leaders who are obsessed with the culture of their organizations. Do you need to be a Hsieh, Barnson or Lutke to deliver similar results? No. We can all follow along the path they’ve charted and still find benefits within our own organizations.
Making your intangible culture tangible
Demystifying culture is one of the top issues for leaders who get that culture is important, but don’t know how to address it. Just recently I heard the CEO of a wildly successful company present to his local Chamber of Commerce about how he’s achieving these great results. They are on a record streak of 69 profitable quarters. He attributed a large part of the success to the leadership team’s attention to culture. He also called out that one thing that eluded him was a way to actively measure it.
A values based culture assessment can deliver incredible insights into what’s going on in an organization. When your employees report that they are experiencing confusion, information hoarding or bureaucracy you can unearth ways to patch the leaks in your productivity pipelines. And when you find out that your espoused values of teamwork, accountability and respect don’t even make the top 10, well, it’s time to take a look in the mirror and decide whether these truly are the core values needed for success or not. To learn more contact us for a free discovery session about how our assessments can help you get a handle on your culture.
Human capital investment
Many leaders are taking the lessons learned from their customer experience strategies and applying them to employee experience. Reducing the number of actively disengaged employees and increasing the engaged bucket can reap significant financial gains. It starts by making a commitment to invest in your people. It’s time to stop seeing them as an expense line item in your P&L and to start appreciating them as human beings.
If we want our organizations to be truly successful, it’s critical to move people from being passive passengers to really energized employees so they can impact the business, but also, just be happier when they show up to work every day. And that happiness is priceless.