Does Corporate Culture Pay?
Culture: It's a word that often makes CFOs cringe because of the perception that it's expensive. From my experience, it's far more costly to do business without it. As CEO of The Beryl Cos., which specializes in managing patient interactions for hospitals, I've found that employee engagement through our unique corporate culture is what allowed us to move from a commodity to a business that doesn't need to compete based upon price.
From the very start, my brothers and I built our company from a foundation of respecting and treating our employees well. It was the only way that we knew how to operate. Only later did we realize that it was not only the right thing to do, but also the right way to do business.
Our corporate culture has resulted in extremely low turnover and engaged employees who deliver exceptional customer service, which results in loyal customers who allow us to continue to grow our business. We re-invest those profits in our people. At Beryl, we call it The Circle of Growth. In fact, the term was coined by our CFO, who was initially skeptical, but became a convert when he realized that culture paid dividends.
Perhaps you think you are ready to transform your workplace culture, but are concerned about being able to justify costs with hard numbers. Consider this: Beryl is four to six times more profitable than our typical competitor and we attribute that to our ability to engage employees. Certainly, we are not the only company that has benefited from investing in their employees. The 2007 book Firms of Endearment found that companies focused on culture returned 1,025 percent to their investors over a 10-year period, compared to only 122 percent for the S&P 500 and 316 percent for the companies profiled in the bestselling book Good to Great.
As the U.S. lurches out of the recession, this ROI isn't as readily visible. It is challenging to be culture-focused in a sluggish economy, but arguably this is the most important time to embrace corporate culture. Cutting out culture and people as "soft" benefits eliminates your strategy to rebound. With customers under similar financial duress, it's the wrong time to allow a customer relationship to become tenuous. Passionate people, focused on customers instead of layoffs, are essential to a company's survival and success.
The Container Store provides a great illustration of how culture can actually help you succeed in tough economic times. Instead of laying off employees, The Container Store asked them to help find a solution. Employees decided that they would all take a lower salary to preserve jobs. This put the decision in employees' hands, building loyalty through an ugly situation. They weathered the recession together.
The Container Store made a big ask. Luckily, most CEOs can begin improving company culture with a smaller ask. Once you decide to turn the culture tide, and it's a sincere desire, the next step is to ask your employees how to improve life at your organization. You can do this by:
• Identifying guiding values, sourced from employees and reiterated as a constant in a sea of change.
• Constructing a clear mission and vision that everyone can own. Paint the big picture and discuss how workers can contribute to success.
• Working together to develop processes and systems that support transparency and encourage sharing opinions and ideas, such as an open-door policy with no fear of retribution.
• Identifying a leader. At Beryl, we have an executive whose title is Queen of Fun and Laughter. She is responsible for helping us to stay true to our unique culture and keep co-workers lives in balance. We also have a group of employees who volunteer as part of the Better Beryl Bureau, a committee that comprises of a cross-section of Beryl co-workers who plan events as well as provide input on policies, change management, rumors, concerns and more.
Once these systems are in place, you are ready for the fun. However, it's not just one big thing, but rather a series of many little things that matter. Between 30 and 45 seconds of your time can impact someone's life in a very significant way. Whether it's a handwritten note to congratulate an employee who just purchased his or her first home, a family field day, or a pizza party to celebrate a company milestone, it's the steady drumbeat that shows you're committed. If you're genuine, this is the beginning of a collaborative journey with employees that doesn't end.
Cultural transformation may seem daunting, but please understand that you don't have to go at it alone. Each month, I will focus on a new topic related to this journey. Together, perhaps we can make putting people first the standard in business, rather than the exception.