Happy People, Happy Bottom Line

If Your Culture Is Bad, Your Business Is Bad

Happy People, Happy Bottom Line“If your culture is bad, your business is bad.”

Adrian Gostick, best-selling author and business consultant, is explaining the correlation between a company’s corporate culture and its bottom line – and he has some very clear advice for anybody running a company today. “Listen, you can come up with all the great sales strategies you want and all the clever marketing campaigns possible, and even devise the most creative new products,” he says. “But your company won’t perform well unless you have engaged employees who want to do a good job every day. That drives everything your company does.”

Gostick, the head of The Culture Works, a global training and consulting firm, has seen firsthand through the clients he works with that there’s a clear link between positive corporate cultures and high-performing companies. “The key is that companies that consistently grow their revenues and profits also have cultures that employees want to work in,” Gostick said, in an interview with Counselor. “These companies have highly engaged employees who are also empowered and energized. Oh, and they also happen to do really well financially.”

Indeed, according to Gostick, who’s the author of The New York Times bestselling business book The Carrot Principal: How the Best Managers Use Recognition to Engage Their People, Retain Talent, and Accelerate Performance, there’s no better way to ensure success today than to increase employee engagement. “It’s the holy grail in business today,” he says.

Gostick spoke to Counselor about how leaders in the ad specialty market can increase their employee engagement, improve their corporate culture, and ultimately make their companies grow because of it.

Counselor: You’ve done a lot of research into high-performing companies? What do you think makes them that way?
Gostick: Over the last few years, we’ve done a major study of 300,000 global companies, and we’ve been able to make a link between financial performance and corporate culture. It seems like the companies that perform the best – both top and bottom lines – also have corporate cultures that allow employees to flourish. These employees aren’t dictated to all the time, and they’re given the freedom to make decisions.

Counselor: They’re engaged in their work?
Gostick: Absolutely. We found that in high-performing companies, employees tend to be enabled and energized, which is a level beyond even engagement. They’re empowered to do their jobs and they have the motivation to do it well.

Counselor: And even though that link exists, you’re finding that many companies today aren’t focused enough on their cultures?
Gostick: That’s correct. There is a lack of focus today on making sure employees are engaged in their work, but I’d make the argument that if your corporate culture is bad, then your business is probably bad, as well. Unfortunately, I see a lot of companies that just don’t have a high level of truly engaged employees.

Counselor: Why is that?
Gostick: Well, you can’t ignore the effects of the economy over the past five years on employees today. Companies have been pushing their people harder and faster. They’re really asking a lot of their people and employees aren’t necessarily benefiting from the increased expectations and workloads. As the economy continues to improve, though, I’d hope that we’ll see a resurgence in employee engagement.

Counselor:What do good leaders do to ensure they have engaged employees?
Gostick: First of all, they create a transparent culture that breeds trust throughout the whole organization. And, they see it as part of their job and their mission to make people feel great about working at that company. Ultimately, they know it is their responsibility to ensure that their people are happy coming to work every day.

Counselor: That sounds like a relatively simple thing, but clearly it’s not.
Gostick: It’s really not. There are many factors that can go into why somebody is happy at work. We’ve found that people are happiest at workplaces where the mission is clear, where management shares information with employees, where there’s an agility to the operations because everything isn’t micromanaged, and where there’s accountability. Employees want to know that they’ll be rewarded for a job well done, and people will be held accountable if they’re not doing their jobs. The worst thing managers can do is allow some employees to subsist if they’re not doing their jobs well. That becomes really demotivating for all the other employees of the company who are doing their jobs well.

Counselor: As far as recognition goes, what do managers need to do to ensure they’re keeping employees motivated?
Gostick: They need to use the sociology of the five-to-one ratio. Great managers offer five times more positive comments than negative ones. Every single day, leaders of high-performing teams are consistently recognizing their people for a job well done. Sometimes it’s with tangible rewards and other times it’s just thanking people for working extra hard on a project. Companies that work on offering five times more praise than criticism tend to have more motivated and engaged workforces.

Counselor: That kind of approach must really show up when employees describe the culture of their companies.
Gostick: It absolutely does, and we talk to employees all the time about this. The companies that grasp this and really are implementing it are usually the places that people just like coming to every day. Those that think of recognition as an afterthought are sure to have cultures that are lacking. And, if your corporate culture isn’t working, nothing will work. Sales, marketing, R&D, customer service. It will all be lacking if your corporate culture doesn’t make people feel great about working there.

Counselor: Like you said earlier, the recent economic environment has made it difficult on many companies. Employees are being asked to do more with less today, so how can you motivate people under those circumstances?
Gostick: You can’t manage every person the exact same way because everyone is motivated differently. Good leaders figure out ways to provide individualized motivation. They understand what motivates different people on their staffs, and they ask questions of their employees. What drives you? What are you passionate about? Where do you want to be in five years? The answers to those questions are different for everybody – good leaders really understand that and can manage to those different individual needs.

Counselor: Do most employees think their companies are doing a good job at all of this?
Gostick: Not really. Our survey found that 67% of employees feel their moms could run their businesses better than their bosses.

Counselor: How can they do better?
Gostick: Good leaders do a great job of explaining the ‘why’ of their employees’ work, as opposed to just the ‘how.’ Ineffective leaders are always talking about how to get stuff done, but leaders of high-performing companies thoroughly explain the why – how their work fits in with bigger goals, and why what they’re doing is important to the overall company’s mission.

Counselor: Is that they key to real engagement?
Gostick: It is. When employees know why they’re doing what they’re doing, then they’re connected to a bigger purpose and not just showing up every day. They’ll be more invested in the company’s overall goals because they know how they fit into that, and they’ll be energized and motivated to do their jobs. That’s how you get people engaged.

Counselor: There’s a big focus in business today on innovation. How does corporate culture fit into that?
Gostick: Culture and people drive everything, so without those two headed in the same, positive direction, there can’t be any real innovation for a company. Innovation is driven by culture, because the company has to really encourage risk-taking and out-of-the-box thinking. If those things aren’t encouraged regularly by the company’s leaders, then how can employees really innovate? They can’t. Effective leaders are open to their people’s ideas and they’re interested in implementing them. If that culture exists, then everybody in the company will be focused on innovation.