Culture’s Impact on the Bottom Line

In his book, The Culture Cycle, James L. Heskett wrote that effective culture can account for 20-30% of the differential in performance when compared to “culturally unremarkable” competitors.

Culture has a significant impact on the bottom line.

Burson-Marsteller and the Great Place to Work Institute asked senior executives from 20 of the top 25 “best multinational companies” for 2011 about the value of a positive work environment. Deidre Campbell highlighted the findings in this article on the HBR Blog Network:

• They invest more in their employees: 30% are investing more in work-life programs such as flex-time and health benefit while the other 70% are holding steady. None is cutting back.

• They provide stability: 75% of respondents valued most those programs that communicate brand mission and provide career development opportunities, compared to 15% who valued traditional benefits like health insurance and family leave and 5% who valued onsite benefits such as cafeterias and childcare.

• They value culture: “When asked which elements of workplace commitment most benefit daily operations, companies ranked culture at 80% and recruitment/retention at 70%,” writes Campbell. Competitiveness, customer loyalty, innovation, and productivity each garnered less than 20%.

• They share their story: 70% of respondents said customers are the most important external audience for understanding the company’s commitment to…

How Does Your Workplace Measure Up?

When, over a 20-year period, you work with organizations good enough to win a Baldrige Award, you observe several common attributes. Baldrige core values like visionary leadership and management by fact capture some of them, but there are other, less tangible attributes like treating everyone (customers, employees, suppliers, etc.) with respect, never being happy with “good enough,” and a willingness to share—and learn.

Simma Lieberman has made similar observations about excellent workplaces. She helps organizations create inclusive workplaces where employees love to do their best work and customers love to do business. In “Ten Indicators of Morale Level and Employee Involvement” (FastCompany, January 4, 2011), she lists ten “easy to observe behaviors of employees who feel good about their workplace”:

1. “There is visible interaction amongst employees in the office, hallways, and cafeteria. People actually smile and say hello to each other. You may even hear laughter.
2. You hear people speaking well of each other and their customers. Employees greet customers and stop what they are doing to provide customer service.
3. There is resource sharing across work functions, and work groups are not complaining about other departments, or work levels.
4. Employees know what other functions do, on a day-to-day level, and how each function impacts the others.
5. Employee…

Get Out of the Office

A recent post by Seth Godin got me thinking about a question in the Baldrige Criteria: How do you design and innovate your overall work system?

Godin’s post, Goodbye to the office, asks why people go to their office, plant, or factory. As he notes, “If we were starting this whole office thing today, it’s inconceivable we’d pay the rent/time/commuting cost to get what we get. I think in ten years the TV show ‘The Office’ will be seen as a quaint antique.”

I’m not so sure about that. True, we’ve already seen a trend toward more telecommuting, but the office mentality is so ingrained that it will take a few organizations revolutionizing the way we work—and making it fun, desirable, and profitable—to really get this ball rolling, and I don’t think that’s going to be widespread in ten years.

Having said that, the organizations that abandon the office concept in favor of something more efficient and relevant to today’s world will carve out an immediate competitive advantage. Young workers in particular will be attracted to the idea. They are already used to a more flexible environment with their phones and their friending and their connecting with friends through their phones. If they…

This Year’s Best Employer

According to Fortune magazine, SAS is the best company to work for. Here’s why:

• A 300-acre campus near Raleigh, North Carolina for 4,200 employees
• Average tenure for employees of ten years with annual turnover at 2%
• Typical work week is 35 hours with many employees setting their own schedules
• No sick day policy: If an employee is sick, he or she decides whether to stay home (the average taken annually is two days)
• A healthcare center with a staff of 56 including four physicians—and services are free to employees (last year 90% of employees and their families made 40,000 visits)
• An on-site 66,000-square-foot recreation and fitness center with gym, weight room, billiards hall, sauna, hair salon, manicurist, Olympic-size pool, and massage
• On-site workday sports leagues
• Two subsidized daycare centers for 600 children
• Dry cleaning, car detailing, a book exchange, a meditation garden, an in-season tax-prep vendor, and an orthotics store
• Three subsidized cafeterias (and they provide takeout for family dinners)
• Off-campus SAS family nights
• Two paid artists-in-residence
• Free M&Ms—22.5 tons a year or 11 pounds per employee

CEO Jim Goodnight explains the SAS approach this way: “My chief assets drive out the gate every day. My job is to make sure they come back.” (“SAS: A new no. 1 best employer,” David A. Kaplan, January 22,…