How to Convince Leaders to Invest in Company Culture

In addition to my leadership role at CultureIQ, I’m an adjunct professor teaching Entrepreneurship 2.0 at New York University Stern School of Business.  Believe me, starting a company is not easy, and there is a lot of material to cover in this class. Yet, every semester I dedicate an entire section to discussing company culture.

Why? Because I truly believe you cannot have a successful company without having a strong, positive company culture.

Thankfully, due to the shifting demographics of the workforce, company culture is getting more and more attention. In fact, according to Deloitte’s Global Human Capital Trends 2016 report, 82% of survey respondents believe that “culture is a potential competitive advantage.”

However, I still notice that culture is often dismissed as a “soft topic,” or people confuse it for the fun, nice-to-have perks in a company. If you’re reading this, you probably agree with me that culture deserves a seat at the strategy table, because it has real, tangible results.

The challenge, then, is closing the gap between what you know to be true and what happens in your organization.

I see three steps to this process:

  1. Define company culture in relatable terms
  2. Understand the potential ROI of company culture
  3. Build a unique case for investing in culture at YOUR company

Define culture in relatable terms

Company culture has a pretty simple definition: it is how things get done in an organization. What makes this topic hard to grasp is that it encompasses so much. Therefore, at CultureIQ, we have identified ten qualities common to high-performance cultures, and I’ve found that using this explanation makes the topic of culture more digestible to business leaders. The qualities are: agility, collaboration, communication, innovation, mission and value alignment, performance focus, responsibility, support, wellness, and work environment.

I have also found it helpful to link company culture to employee engagement. If culture is how things get done, employee engagement is how employees react to and feel about your culture. It is one outcome of having a high-performance company culture.

Understand the potential ROI of company culture

Luckily, there has been a lot of research in this area recently, so you have plenty of data points to choose from. I’ll share a few of my favorite examples, and I encourage you to compile a few stats that would resonate with your leaders.

  1. In a study of 100 organizations, Northwestern University researchers found that companies with satisfied employees also had a higher percentage of satisfied customers. These customers purchased the company’s products more frequently, maintained higher levels of loyalty, and reported greater satisfaction, which directly contributed to higher gross margins, higher repeat business, and reduced acquisition costs for each company. As someone who has always been passionate about customer service, this stood out to me.
  2. A meta-analysis by the UK’s National Institute of Healthcare Research found consistent links between employee engagement and individual performance, and engagement and discretionary effort. The more connected an employee feels to the organization’s culture, the more likely an employee will be to go above their job description and work harder, longer, or more creatively on a project.
  3. According to a recent study in the Journal of Organizational Behavior, a positive culture boosts performance, but strong performance alone isn’t enough to create a positive culture. This is another reason why it’s never too early to think about culture.

Build a unique case for YOUR company

Business executives tend to overestimate the state of engagement in their company, so one of the most effective things you can do is paint an accurate picture of your company’s culture.

To do this, collect systematic employee feedback and report on it in quantifiable terms as much as possible. It’s hard to argue with data. If possible, I encourage you to also dig into some of the other data you have at your disposal, such as retention statistics, performance metrics, or participation rates in trainings. Focus specifically on business metrics that your leaders care about, such as customer satisfaction ratings or operating costs.

As you work through the data, a few themes will start to stand out, and you’ll want to pursue those storylines. The result of these efforts will be two or three key cultural opportunities worthy of investment, and the data to back it.

Whether or not you follow these steps (or even need to), the secret to this process is translating company culture into a language any business executive can understand — data and metrics. This is how you’ll be able to align your company culture with your business strategy.

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