Study finds that culture isn’t a soft option but has clear impact not only on business success, but on the economy
Corporate culture has made the shift from a rather nebulous concept to something that is recognised as having a significant impact on the bottom line. Indeed, a new study puts the cost of a bad company culture at a staggering £23.6bn a year for the UK economy.
The Culture Economy report by software company breatheHR finds that one third of British employees (34 per cent) quit their jobs due to bad workplace culture. The survey focused on the SME market but should resonate with leaders of companies of all sizes, large-, medium- and small.
Decision-makers surveyed stated that positive culture led to improved morale and relationships (50 per cent); employees going the extra mile (44 per cent); better customer service and satisfaction (43 per cent); improved individual performance and productivity (43 per cent) and reduced employee turnover (35 per cent). Worryingly, it also indicated a lack of trust exists in many organisations with one fifth of workers saying they don’t trust their senior management. Of these, the main reasons for distrust was because: they don’t feel supported by them (59 per cent); they don’t appear to know what they’re doing (53 per cent); they’re not transparent (45 per cent); and are self-centred (41 per cent).
Jonathan Richards, CEO and founder at breatheHR, is right to point out that culture isn’t a soft option and can impact productivity. “It has a clear impact not just on business success, but on the economy and our society. This includes productivity, an area many SMEs struggle with and don’t have the time to dedicate to it,” he says. “However, one way to boost productivity levels is improving management quality and giving employees autonomy and purpose, as our report reveals. All of which validates the fact that businesses are now operating in a culture economy, and small businesses [which] fail to realise this won’t last long.”
As we know from other research and regular news reports, productivity remains an issue for many businesses and the UK economy as a whole. Those leaders who have failed to respond to the clarion call on culture previously must take it seriously. Company culture is an extremely powerful thing and improving it has the benefit of addressing a range of issues in a single go.
In the most part, employees want to enjoy coming to work, they want to enjoy their jobs, they want to like and trust their managers and employers. But they are unlikely to experience any of these if an organisation’s culture is toxic. In Rialto’s experience, get the culture right and so many other things will fall into place. Individuals who feel more aligned with an organisation and its mission are more likely to release discretionary effort and this, in turn, will lead to improved performance and increased productivity.
Put simply, to improve company culture is to directly treat the cause of many workplace problems rather than the symptoms and we all know from other walks of life that the benefits of this are far greater and more long-lasting.
As the global economic crisis rumbles on with continuing uncertainty and no light at the end of the tunnel, many employees are weary, worn down, battered and bruised.
They may no longer be inspired by their job but trapped by the economic environment, creating mixed feelings towards their employer resulting in them operating below their potential.
The motivation they feel is negative – pushing themselves out of a fear of what might happen, terrified of losing their job if they do not achieve targets and results. This type of motivation is unsustainable and leads to under performance, burnout and eventually the loss of skilled workers.
The challenge facing leaders is how not only how to engage workforces and get the best out but how to keep them focused, motivated and, ultimately, in the right mindset.
The culture of an organisation ultimately manifests itself as behaviours – whether conscious or not.
The problem with culture change however, is that the focus too often takes place at a behavioural level alone. The key to shifting behaviours genuinely and sustainably actually lies at a much deeper level.
Why do we behave the way that we do? Why do we find it difficult to change? What feeds those behaviours?
If we can understand and make changes at this level, then the behaviours will change naturally and authentically. This is the same issue that organisations have in developing their people. Too often we are ‘told’ what to do differently, without any attention paid to ‘how’ to shift those behaviours authentically and willingly.
The culture of an organisation is driven by the behaviours that exist within it. Improving performance requires change. All change is derived from individuals and teams within an organisation changing some element of their behaviour – which therefore automatically shifts the culture.
The speed and traction of change (and therefore any improvement) is driven in large part by how willing and able people are to execute upon it. Improving performance is therefore made easier, more effective and more sustainable the stronger the level of employee engagement. Performance can be directly correlated to the level of engagement that exists within that organisation.
Engagement is NOT something that is simply ‘DONE’ to people from on high. Sure, Leadership must work hard at it, but engagement by its very nature needs to be seen as something integral to the business rather than a strategy to deliver performance. Engagement is something that is driven and grasped at all levels in the business.
As an executive coaching provider we are privileged to obtain an insight into many different organisations and how they operate.
Of course it’s easy to observe when you are on the outside looking in, when you don’t have to survive in the organisation and your career does not depend on the benevolence of a few key stakeholders. (However, from this external perspective there appears to be themes which are common to many organisations regardless of sector or maturity. With the pace of business today there seems to be an inordinate pressure to make decisions quickly, professionals are paid to have a view, paid to take a positioned to propose a way forward almost “on demand”). When is the right time to pause to reflect? Are you in need of an executive coach?
Organisations urged to get past the hype and understand how to apply AI to become truly intelligent enterprises
Plans have been unveiled to establish a new university in the city of Milton Keynes that will focus on digital skills. The first undergraduate cohort is expected in 2023 and around 5,000 students will study for qualifications in areas such as digital, cyber, autonomy, robotics and artificial intelligence (AI).
It is being developed in partnership with business and plenty of major players are supporting the project. It was announced this week that the exclusively postgraduate Cranfield University has been chosen as the lead higher education provider and other partners include Grant Thornton, MK College, Microsoft and Indian IT and technology solutions provider, Tech Mahindra.
The aim is to design new educational models which will be responsive to the needs of the city’s businesses and its people and Ian Fordham, Microsoft UK director of education, reckons the MK:U vision closely aligns with the tech giant’s mission to empower “every person and every organisation on the planet” to achieve more. “We are confident that this new institution will help ensure students develop the skills they need to thrive in a digital economy.”
It is great to see the UK planning to deliver a ground-up and robust solution for what is potentially one of the biggest skills gaps organisations have ever faced. It should also confirm in leaders’ minds everywhere that digital really is the future and even if technologies such as AI and robotics don’t affect their organisation now, they will more than likely play a part in the future.
According to a report by Capgemini and LinkedIn, the digital skills gap is widening though, and worryingly, budgets for training digital talent have remained flat or decreased in more than half (52 per cent) of organisations. Meanwhile, half of organisations said they “keep talking” about the digital talent gap but are not doing much to bridge it. The Digital Talent Gap – Are Companies Doing Enough? also found that half of employees are investing their own money and additional time beyond office hours to develop digital skills on their own.
Where there is training being provided, more than half of today’s digital talent say training programmes aren’t hugely effective and close to half (45 per cent) describe their organisation’s programmes as “useless and boring”. It is laudable that some employees are investing in their own digital future but a failure on the part of senior leadership, especially given the research also found more than half of organisations (54 per cent) felt the digital talent gap is hampering their digital transformation programmes and that their organisation has lost competitive advantage because of this.
None of it makes sense given the opportunities digital is likely to bring. Indeed, the 11th edition of Capgemini’s flagship publication, the Digital Transformation Review: Artificial Intelligence Decoded, highlights how artificial intelligence will be the most debated, invested in and disruptive business technology trend over the coming years. Lanny Cohen, Capgemini’s chief innovation officer, urges organisations to get past the hype and “understand how to apply this innovation to become a truly intelligent enterprise”. The review tackles the AI talent gap as well as AI’s impact on jobs and the characteristics of AI leaders.
While “we are all technology companies now” is fast becoming an everyday expression, it sends out one of the clearest message yet to leaders that they must invest in digital skills for the future. After all, you wouldn’t head up a pharmaceutical company and not invest in computational biology and genomics or clinical research know-how would you?
Organisations are constantly seeking new ways to ensure their management and employees are more productive and their businesses are more profitable.
Many companies have created rigorous strategic plans that don’t come close to delivering the required outcomes. According to research, the average team achieves only 63% of the objectives of their strategic plans.(Source: Harvard Business Review 2005).
The key issues of a high performance team include, how well the team communicates, aligns itself around top initiatives, creates short term/long-term plans and holds themselves accountable to deliver the required results.
Rialto approaches team development and effectiveness in the context of an organisations vision, mission and business goals. We build leadership and management capability at all levels of the organisation ensuring that unique team attributes and skills are aligned towards achieving desired business results.
We utilise models and practices that successfully address teamwork, emotional intelligence, networking, influencing others, improving team performance and managing difficult conversations through effective coaching and talent assessment techniques.
