It’s the culture economy, stupid

It’s the culture economy, stupid

Filter tag: Culture & Organisational Effectiveness

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.


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