The growth indicators banks consider when examining the health and progress of businesses tend to be quantifiable. They include industry financial ratios and how they’re moving; if there’s inventory, how it’s turning compared to national averages in the specific industry; the pace of hiring and turnover; revenue and profit; etc.
However, there is another factor that is hard to quantify but has an outsized impact on a company’s growth: culture.
“Culture is everything because culture drives the behaviors of the employees and the behaviors of the employees drive results,” says Wesley Gillespie, regional president at ERIEBANK. “Culture is oxygen to a business — you don’t see it, but you’ll know if it’s not there.”
Smart Business spoke with Gillespie about the role culture plays in company growth.
How does culture affect a company’s growth metrics and its ability to hit its growth goals?
Company cultures commonly fall short in one of four areas. They might not be able to:
- Clearly define their culture.
- Manage and shape their culture so that it fits their definition of culture.
- Align their culture with their market strategy.
- Leverage their culture in times of positive or negative change.
Culture is critical to the sustainable growth of any company. It’s possible to grow with a bad culture, but those looking for sustainable, long-lasting growth need a consistently good culture.
Strong cultures require a high degree of trust — both among employees and in the company leadership — and that’s critical to longevity and growth. Low-trust cultures typically have disengaged workers as well as higher operating costs that come from an inability to move definitively and efficiently in response to changes in the market or to new company initiatives. Those higher operating costs impede growth.
How well do area companies understand the state of their culture?
Companies typically wait for a triggering event to examine their culture. Often it’s after something goes wrong, when they want to position their company to sell or are having issues with high turnover. It’s rare that a company gives attention to its culture when things are going well. That can be explained in part because it’s difficult for leadership to asses or understand their culture while they’re in the weeds running the day-to-day operations. Many things become invisible and that makes assessing their organizational culture difficult.
One way to gauge the health of a company’s culture is with anonymous engagement and employee satisfaction surveys. These can be done internally by the company or an outside agency can issue them. In the results, companies should look to see if they’re getting similar responses about the culture at all levels of the employee population and across departments.
If there are similar responses from diverse employees and departments, that’s the culture. If they’re all saying something different, a company might have good workplace but the culture is lacking. The next question the company needs to ask itself is whether it has the culture it wants, or does it want change?
How can companies foster a culture that fosters company growth?
First, define the culture, then communicate those cultural ideals to employees. If there’s a gap in the culture and the cultural ideal, then identify the issues creating that gap and address them.
Once culture is defined and communicated, aligning the strategies of the business to the culture is the next step toward ensuring the organization is synchronized. This is how engaged employees impact company growth.
Culture shapes attitudes and behaviors in wide-ranging and tangible ways. Company leadership needs to lay the foundation and occasionally take the temperature to see if it’s where it should be. It’s more than just putting up a poster in breakroom. It’s living it every day, tracking employee behaviors and correcting when necessary. And that’s critically important because culture drives behavior and behavior drives results.
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