Why Not Obsessing Over the Bottom Line May Get You Better Results
Look under the hood at any high performing company of any size and you'll find they all have at least one thing in common--they're great places to work. In fact, the Fortune 100 Best Companies to Work For have performed nearly twice as well as the Russell 6000 since 1997, provided twice the return on investment to their shareholders, and had less than half the employee turnover during that time.
My friend Jim, was a senior leader at a mid-sized health insurance company, saw firsthand how a positive culture led to a more profitable business. Under his leadership, the company managers fostered communication, teamwork, and togetherness. It was a fantastic place to work. They had an activities committee, wellness committees and managers were encouraged to take their departments bowling occasionally for teambuilding exercises. The company-wide putt-putt golf tournament was the highlight of the year. The CEO held monthly all-staff meetings, when company financials and strategic plans were shared so that all felt involved in the success of the company. Meanwhile, the company experienced years of sustained success and growth.
How did they do it?
Prioritize Culture. Having a great culture is achievable, but it has to be a priority. Survey employee engagement and act on the results; pay attention to turnover rates, and get reports from leadership on department-specific culture.
Maintain a Positive Tone at the Top. To be a great place to work, there must be leaders who are great to work for. Developing a leadership toolkit built on empowerment will go a long way to creating dedicated, hardworking employees.
Celebrate Your People. People drive the business. The first step is having the right people in place, but so many companies stop there. Take it to the next level by tapping into their talents. People thrive when allowed to contribute in a way that honors their strengths. Encourage everyone to share ideas.
Provide Focus to Your Team. Former Alcoa CEO Paul O'Neill turned around the stagnant aluminum giant by making Alcoa into the safest company to work for in the United States. He instituted training sessions, company policies, and benchmarks, while managers talking safety day in and day out. Not surprisingly, Alcoa, in a short time, became one of the safest places to work in the world. At the same time, morale reached an all-time high, the company started growing again, and profits hit a record high.
Once you have that all important culture in place, protect it, because just as a good culture can grow a business, a poor culture can destroy it. My friend Jim saw it. After years of sustained success, sudden regulatory changes in the health care industry resulted in the company being sold and a new management team was put in place by the new owners. People were no longer called by name and office doors were closed for meetings. The extra perks were nixed.
Staff, managers, and upper-level directors who had been part of the success began leaving in droves, and within a year the company was out of business. The new owners had focused entirely on the bottom line and put none on the people. As Jim put it, "It took years to build that rich culture, and only months to tear it down."
The fact is that no matter what the industry, size or location, every business can strive to be a good place to work. You can't flip a switch and turn on organizational chemistry--it takes a dedicated effort. But it's a worthwhile cause and a better way to get results than focusing on results.