By Aniruddha Bhagwat, CEO and Co-Founder
Culture Means Business. We have all been exposed to extensive discourses on building a strong work culture within organizational structures. It is important to understand that every culture is different, and the key is consistency in the shared sense of purpose, personality and character an organization showcases. Evaluating an organizational culture has to do more with ensuring an alignment of vision and likeminded professionals than whether it is a good or bad. As with life, culture is not an element to pass judgment upon, but rather identify as boundaries of who gets in and who stays out.
Culture has to be defined not by taking inspiration from the market, but by looking within, to identify the organizational goals, mission and vision. With this retrospection, it is clear that culture is very closely coupled with business, and while it may be difficult to directly correlate with profitability, it does influencer several levers that enable a strong business bottom line.
It is easy to understand the people are at the core of your culture, and thereby, your business. A consistent, well-defined culture can help companies to attract great talent and more importantly, retain them. It is the basis of employee engagement and job satisfaction. Multiple reports suggest that companies with highly engaged resources consistently perform better than peers lacking regular collaboration. All of these lead to the most important lever for business: Trust.
Engaged teams not only believe in each other, but they exercise faith in each other’s abilities and can depend on each other. Processes are closely linked with culture, as processes are only as good as their adoption. Culture ensures the organizational strategy is interspersed within the way the organization defines its uniqueness, values, behaviors and attitudes. These processes also build discipline within an organization, and are further fueled by ensuring accountability at an individual, team and organizational level. Discipline and adoption of standardized processes linked with organizational strategy ensure quality of delivery and customer satisfaction. Both of which can be directly correlated with the growth trajectory of a business.
While profits are the common scoreboard for any business, it is the revenue efficiency that enables business to grow well and fast together. This leads to a sustained business flight path, and one a company can replicate, enhance and refine as it grows in size. Studies show that great work culture leads to superior employee engagement, and engaged companies have shown operating income increases of 28-30% and earnings growth by close to 20%. Moving past to absolute earnings, well engaged companies have been able to consistently show a 4-5 multiple return over their disengaged peers.
Our balance sheets reward us for putting people and culture over short-term business opportunities. As business are infinite by definition, it is more important to create an environment for long term, consistent success than just tomorrow’s gains. The impact and efficiency of culture is largely dependent on leadership. Culture is all about showing, and very little about telling. Leaders showing and demonstrating great culture often yield the best results. A 2018 AON report suggests that even a 5-point bump in culture and engagement can impact revenue by 3%. These are the rewards of doing good business, and prove that as businesses continue to fight over sales, revenue and opportunities; it is the people and environments that decide the winner. And that’s why, culture absolutely means business.