Here is a scenario.
Company A is dominating their respective markets, employees work 12+ hours daily, make great salaries, but have high turnover rates.
At Company B, employees work just as hard, make less money, but have very low turnover.
Here is the reality.
Company A is suffering from bad organizational culture. By sacrificing a healthy company culture for productivity and profit, which is highlighted by the high turnover rate, this company has a false pretense of success. Nonetheless, the greater issue is that this management style is commonly used in business. The notion that a taskmaster environment will lead to greater performance is intrinsically flawed. Instead of increasing performance, this methodology of “leading” undermines the organizational mission, destroys morale, and results in a weakened bottom line long-term.
What is Organizational Culture?
Most people make the mistake of relegating organizational culture to the atmosphere of the office. However, organizational culture is much broader. It is the general pattern of how people think and act within an organization. Organizational culture at its core is a blend of beliefs, company values, and behaviors that contribute to the overall atmosphere of a company. The biggest thing to keep in mind about organizational culture is how those patterns of thought and actions work together to create an experience. Is the employee experience a positive one? This should be a focal question of every CEO and HR executive because of its vast implications. Miserable employees pass their misery over to customers through the customer experience. Bad customer experience transfers to a weak bottom line.
It Starts With the Head
In reality, organizational culture starts at the very top and trickles down in levels. The beliefs, values, and behaviors of direct supervisory leadership affect every aspect of a company; right down to the office environment that you have come to either love or hate.
This trickle down effect is seen most clearly in the ethics of a company. When an employee acts unethically, there has usually been some prior instance of such behavior being carried on by his or her direct superior. More importantly it has been encouraged or fostered to achieve a goal. As such, a lack of integrity is being reinforced. Why? The answer stems from upper management that enforces the “profit at all costs” motto, spurred onward by a leader who believes that the end always justifies the means. Don’t believe me, ask anybody who isn’t in prison from the Enron scandal.
Turning It Around
The most crucial step that managers must take to change a failing organizational culture is to get in touch with the employee and customer experience. For example, a person who owns a manufacturing company should spend a day on the factory floor. One of the best examples of this concept is Undercover Boss. The corporate executives on the show find that getting first-hand knowledge of the employee experience informs their policy decisions. The same applies to the customer experience. Managers should use the products and services they sell to see what type of experience customers are really getting. Once managers have a clear picture of the company experience, they can reshape policies and retool products to create a culture that yields a healthy working environment and a healthy profit margin.
It’s not lavish bonuses and trips to Cancún that turns an organization’s culture around, even though that might help. It’s buying a pizza if your team needs to work late, or calling a snow day because you realize your employees have kids. If your employees feel valued, their gratitude will show in their work and in their dedication to your company.