Culture is clashing with bad management.
You already know that the world has gone crazy and that competition is fiercer than ever before. There are two ways to compete in today’s environment:
One is to offer ridiculously low prices by cutting your costs to the bone. Oh, and tomorrow, you have to cut prices again because someone on the other side of the planet can beat your prices… further sending your team in chaos.
The other is to offer more value – delivered from a team of people that care.
The problem I keep running into is managers (not leaders) that just aren’t getting it. They ignore the values of the organization by saying something uniformed such as: “Values, Mission and Vision are corporate ‘Brain Washing.’ This is the real world here.” Wow! I would hate to be involved in a business like that. I guarantee they have high employee churn, low customer satisfaction and increasing margin pressure and… a crap culture!
Keller and Price, in their book Organizational Healthy; The ultimate competitive advantage show how organizations that lead with values, purpose and a direction that is clear and compelling routinely outperform businesses where the team is disengaged. And get this – by a 2 to 1 ration in EBITDA and Growth in Net Book Value, and 1.5 times better in Profit Growth to Sales! I guess ‘Brain Washing’ works after all…???
Additionally, bottom cultures are on average seeing as much as 69% of the team disengaged or actively disengaged. Scary! With only 31% of the team engaged, customers have a 3 in 10 chance of getting service from someone that cares. No wonder customers are voting with their wallets and looking for better prices instead of consistent value delivery.
‘Managers’ that are searching to cut costs continuously in a disengaged organization are spending about 2X a team member’s salary to replace them when an employee churns away from the business. With employee churn in some bottom culture organizations approaching 50% annually (in an organization of 500 people where the average salary is $30,000 per year as an example), the business could be spending as much as $15,000,000 each year to replace the employees that have left. What would saving that spend do to the bottom line?
Instead of wasting the $15M by hiring more disengaged employees, why not spend half of that amount on development and engagement programs that build a team of people that care and serve customers better than anyone else? $7.5M would flow directly to the bottom line and I guarantee an engaged culture will deliver more top line performance.
I guess, great cultures built on values, purpose and vision is ‘Brain Washing’ though, right?
