For years, consultants have told us that culture is a strategic weapon. As long ago as 2006, Peter Drucker famously said, “Culture eats strategy for breakfast.”
He didn’t mean we should ignore strategy and focus purely on culture. However, he believed that many companies were ignoring the power of culture and the strategic advantage it can provide.
By “culture,” he meant much more than bean bag chairs, free drinks, and pinball machines in the office. He meant the patterns of human behavior among your employees and how these patterns can contribute to success.
Virtually every CEO now understands that culture is essential, but many don’t yet understand it from a competitive standpoint. Times have changed. Culture is finally truly a competitive advantage. Leaders who do not understand this will make expensive mistakes. In a strong economy, culture can be overlooked when everyone has tailwinds driving their growth engine. However, when an economic downturn sets in, culture becomes magnified as a true competitive advantage in attracting the best talent and—most importantly—retaining the talent you need to achieve your following key milestones.
A company’s culture defines how people work together and relate to each other. It’s a mix of expectations, rules, traditions, and norms. These elements can be brought together intentionally, or a culture can emerge. The culture of a workplace is defined by mindsets and core values that produce specific behaviors. Culture determines how your employees will feel about coming to work.
In the current post-COVID environment, more employees are interested in working remotely, creating a culture that transcends the physical office. This has added a new dimension to how every company must think about its culture.
People can love or hate a company’s culture or be neutral about it. If they love it, they’ll become engaged and inspired. To me, that sounds like the ideal employee. If they hate it, they will either endure it or leave. Enduring it is even worse than leaving. Who wants to work with a dispassionate team member who is enduring their time at work? Those are the people who bring down morale and who will eventually become obstacles to other people’s efforts.
If they’re neutral, you might see passive-aggressive behavior, where employees express their disdain or discomfort indirectly. The return on payroll for people in this mood is pretty poor. They’re likely to do only what they’re asked to and no more. Furthermore, teammates who are neutral about a company culture will not be additive in advancing the culture. Over time, their neutrality erodes the positive elements of the culture.
The culture of a workplace determines if your employees will enjoy being there, and in turn, that defines whether the company will get the best from them.
The economy will go up and down, but when jobs are available, people won’t be afraid to move on because they won’t enjoy the culture in which they work. This means that your team needs to like coming to work, and that’s all about building a culture they enjoy
Employee career trends
In the last 20 years, there have been considerable changes in how employees choose where to spend their careers. Some emerging trends:
- Passion and interests: The younger generation of workers are courageous enough to follow their passions and interests instead of being funneled into jobs they’re “expected” to do. Focusing on the joy of the work itself, rather than maximizing their compensation package, means they’re less willing to work in unpleasant environments or do work they do not enjoy. They are even less willing to tolerate toxic colleagues.
- Flexibility to work from home: The COVID-19 pandemic caused many people to re-think why they go to work and to gain a new appreciation for working from home, flexibility, and the preciousness of life itself.
- Prioritizing life over work: A new prioritization seems to be taking hold. People see work as just one element of their lives and think very intentionally about the work they want to do. It’s less common for employees to consider sacrificing their personal preferences— family, hobbies, travel—to secure their desired job. Rather than the outdated idea of “work-life balance,” employees are beginning to design their lives intentionally.
- Empowered decision-making: Employees are becoming more empowered, better informed, and motivated to make good moral choices that enhance their communities. They want to be part of something bigger than themselves. They do not want to choose between a good job or an impactful life. They are beginning to realize that they can have both.
- Making a difference: Employees have become increasingly interested in finding the company that fits them best. They want to connect to the company’s mission and purpose and contribute to the firm’s success using their skill set. It’s not just about a paycheck; it’s about making a difference in the world and having the ability to grow their careers.
- Compensation beyond salary: While still important, salary is only one part of the compensation system. We need to view compensation more holistically. Time off, flexibility, and contributing to social causes can also be considered compensation. Michael has found that employees are searching for more sustainable kinds of satisfaction. That’s where corporate culture comes in. Understand me—you still must pay people fairly. Pay is still an important part of the compensation equation, but not the only part.
The importance of culture
Studies show that a firm’s culture is significant when employees decide whether to stay or move on. When someone leaves, it’s not necessarily a judgment but a statement of preference. It’s not about the company, necessarily – it’s about them. The working environment you’ve created might be ideal for someone else. Employees are making that call with greater confidence and intentionality than ever before.
As we’ve navigated through economic fluctuations and a post-COVID work environment, it has become evident that culture is not just a buzzword or a nice-to-have element but a critical strategic asset. A thriving culture attracts and retains top talent, fosters engagement and innovation, and ultimately drives long-term success. Leaders who recognize and invest in building a robust culture will be better positioned to navigate challenges and seize opportunities in the ever-evolving business landscape.
Now is the time to take action. Evaluate your company’s culture with a fresh perspective. Identify areas for improvement and actively work to cultivate an environment where employees feel valued, engaged, and inspired. Remember, your culture is a living, breathing entity that requires ongoing attention and nurturing.
Don’t wait for an economic downturn to reveal the gaps in your cultural foundation. Start today by fostering a culture that supports and propels your strategic goals forward. Your organization’s future depends on it.
