The ROI of a people first culture
Wednesday, September 18, 2024 - Joe Kiedinger
The correlation between culture and success
A common myth is that building a positive company culture stands disconnected from or even in contrast to maximizing bottom-line performance. Some call it a waste of time and resources
From my 20+ years of experience in this field, I can tell you that this couldn’t be further from the truth. Having worked with people across many industries and at all levels of the corporate ladder, few things have become clearer to me than the correlation between a positive workplace culture and positive bottom-line performance.
You don’t have to take it from me – the statistics don’t lie! Organizations with a positive company culture outperform their competition by over 20%, and so do their employees, who report being 12% more productive on average. They are both more effective and more efficient problem solvers and are more likely to display creativity in what they do. Meanwhile, unhappy employees are 10% less productive on average. Those percentages may seem marginal, but they add up fast.
Toyota: a living example
There are countless examples to be found with a quick Google search of some of the biggest organizations in the whole world finding success precisely because of something they implemented into their culture. One example that comes to my mind right away is Toyota.
We all know Toyota, the Japanese auto company known for making the most reliable cars you’ll ever find. They had to break into an already established automobile market and carve out their place in the industry. Companies like Ford were stunned and stumped as to how Toyota was finding so much success.
There was even a time when Ford requested to send people into a Toyota plant to figure out if there was any piece of technology or material that they weren’t using. Surprisingly, Toyota granted that request. To many, it was an insane idea to let people from a major competitor into a plant, but the Toyota executives let it happen. Ford’s people inspected their plant and found many of the same materials, technologies, and techniques were being used to produce vehicles. They left the plant stumped.
The secret to Toyota’s meteoric rise wasn’t what they had, but rather how they were using it. Some of you may be familiar with lean manufacturing – that came from Toyota! Lean manufacturing is much more than just a process – it’s a way of business, and culture is a massive part of it.
Lean culture systemically promotes mutual respect, collaboration, and cohesion, alongside a constant pursuit of improvement in internal practices to better satisfy the customer. It’s this synergy of culture and process that enabled Toyota to take the automobile industry by storm, and by their own account, a large part of what makes them continuously successful up to today.
Sure-Dry: against the odds
We don’t have to look at the top to see this in action, you can find it in your community too. Just recently, I had the honor of interviewing Jamie Budiac, General Manager of Sure-Dry, a basement repair company in Northeast Wisconsin. Under his leadership, the company went from $5.5 million to $17 million dollars in revenue in the span of 7 years. A remarkable growth rate, which he attributes in large part to the culture they built at the company in that timeframe.
He explained that the Sure-Dry’s industry is generally a high-turnover industry. It’s difficult, physically intensive blue-collar work. In order to keep people around, he explained, you need to show that you care. One of my favorite quotes of his was, “It’s people before profits. If you invest in the people, and you take care of them, they will walk through walls for you, and profits will come from it.”
Jamie talked a lot about his methodology of making sure employees know that they are cared for and appreciated, which you can hear more about in our podcast episode. You won’t likely find a better example of how a great culture can make for great performance, even in industries where it’s inherently more difficult like Sure-Dry’s.
The bottom line
Success in business is never guaranteed. However, one thing that is guaranteed in business, is that if your employees are cared for, they will care for your business. People in a positive company culture where they are cared for, listened to, and enabled to collaborate, are statistically more likely to perform better and forward your bottom line more. There’s no time to wait – get invested in your culture as soon as you can.
JOE KIEDINGER
ACTION PLAN: Organize a trackable, sustainable plan to add or modify elements of your culture to put your people first. Show them that they matter by encouraging growth, enabling collaboration, demonstrating appreciation, and more.