Most leaders today acknowledge culture is important to their organization.
However, what many leaders and managers don’t realize is just how much their results, outcomes and bottom line are built on culture.
In fact, the business case for culture isn’t only clear—it’s critical to survive in a competitive environment.
But don’t just take our word for it. Let’s look at the data.
What Changing Culture in the Workplace is Worth
Companies with healthy cultures outperform their peers in revenue and market share.
Companies on Forbes’ Best Places to Work earned almost 3x the cumulative stock market return of FTSE Russell 2000 and Russell 1000 over the last quarter century.
In fact, over six years, these organizations outperformed the Standard & Poor’s 500 by 84%. As we point out in Culture Works, one global leadership study concluded that a strong culture can increase 5-year revenue growth by 450%.
That’s no small edge–changing culture in the workplace can be everything for a business trying to thrive in uncertain times.
One key reason is that employees in strong cultures perform better, with not only 22% more productivity but also more creativity and greater innovation.
They make 26% fewer errors and provide 14% better customer service. They display more motivation and a greater willingness to go beyond their job descriptions.
And this, unsurprisingly, leads to increased customer loyalty and business growth.
Did you know?
It surprises many people to know that paying more does not deliver improved performance.
In fact, again and again studies have found no relationship between pay and results–or even a negative relationship (when paying more delivers worse performance).
It may be surprising to see, but it’s great for the bottom line, since it means you don’t need to increase business costs to improve your team’s performance.
Improving culture doesn’t only improve performance–it also decreases costs.
And culture reduces costs beyond just turnover.
What does this mean for you?
Culture Calculator
Here’s how the calculations work
You can check out the research and data that supports these estimated numbers here.
The calculations in a nutshell
Say you pay Dwight an annual salary of $40k. If Dwight is unhappy, he costs you an additional $38k in lost productivity, poor customer service, turnover, safety incidents, emotional impact on coworkers, and damage to your employment brand.
The bad news is you’re almost paying double to keep unhappy Dwight. Want some good news?
A happy employee not only saves you from paying those penalties–happy employees also contribute more to the bottom line. In this case, Dwight contributes $21k more through fewer absences and mistakes, as well as improved productivity, impact on coworkers, better customer service, and improved employer brand.
The total impact of Dwight’s happiness comes to $59k ($38k + $21k)–1.5x his salary. (And we kept these numbers on the conservative side.)
Even More Good News
Here at Choose People, we’ve shown over and over again it doesn’t have to be hard or take forever.
