The impact that organizational culture can have on a brand and on business profitability extend much further than employee satisfaction or employee turnover. In other words, the proof is in the pudding.
Business professionals across the globe have been talking about the importance of employee culture in the wake of the New York Times article describing Amazon culture and employee working conditions in less-than-stellar terms. While experts, ex-employees and current Amazon workers continue to weigh in on organizational culture there specifically, it’s a topic that every brand should explore. Problems in the organizational culture can create problems in many other areas of an organization. On the other hand, when you get it right, a positive employee culture can make many other parts of a business better.
Organizational Culture: The Proof is in the Pudding
Have you ever wondered about the origin of the phrase, “The proof is in the pudding?” It’s not talking about physical evidence; rather, it refers to the results. A more accurate rendering would probably be, “the proof is in the eating.” Meaning, whether or not the dish contains good ingredients and has been properly prepared will be evident when it is sampled and consumed.
The proof is in the pudding is a great analogy for organizational culture!
When it comes to organizational culture, it’s more than just having the right recipe and the right ingredients. It’s also about whether the recipe is actually followed correctly, whether it’s served up at the right temperature, at the right time, to people who are hungry for it – and a host of other variables. Perhaps that’s why actually producing a buzz-worthy, talent-attracting, customer-retaining organizational culture is so very, very difficult to achieve.
5 Areas Organizational Culture Shows Up to Help or Hurt a Brand
Few things are more important to sustaining and growing a business than the customer experience. One bad experience gone viral can influence hundreds – or thousands – of buyers to take their business elsewhere. On the other hand, a customer experience that is unique and positive in a way that surpasses expectations could help a business attract new customers it might not ever have been able to reach.
A bad organizational culture cannot sustain a pattern of good customer experiences. Sooner or later (and probably sooner) the negativity felt behind the curtain will show up on the buyer’s side of the equation.
If more organizations took the time to tally up the true cost of high employee turnover, they would surely begin to realize that organizational culture may play a much bigger role in employee satisfaction than they ever realized. Talented employees usually know that they have the ability to work somewhere else if they aren’t happy, and for most employees, good pay is not going to compensate for the angst, stress and unhappiness experienced in a bad employee culture.
Not only will employees quit a poor culture, they’ll leave reviews about it on sites like Glassdoor that will steer other quality hires away.
As Amazon just found out, even merely the accusation that your corporate culture is suspect can be enough to cast doubt on a good brand reputation. Once the word gets out that the values on the inside might not match up to what the public thought was true, it will be an uphill battle to convince them that your brand has an admirable company culture.
Customer retention and loyalty are highly dependent on whether customers feel good about doing business with you. If they have a bad experience with your company or public damage to your brand undermines the pride they felt about doing business with you, their loyalty and patronage may be up for grabs.
Profits and Profitability
If you have a subpar organizational culture, you can plan to spend more on nearly every facet of human resources and marketing. You will have to spend more on marketing and advertising to attract an adequate number of customers. You will have to invest more time and resources on recruiting, hiring and training due to high employee turnover. You will have to spend time and money on marketing and PR to correct misunderstandings or improve the way people perceive your brand, and you might have to spend a lot more on philanthropic and community efforts to repair your brand image once it’s been damaged.
Elizabeth Kraus is the author of the 2015 Small Business Marketing Calendar, featuring 12 Marketing Ideas Your Mom Would Hate with hundreds of ideas that can help better lead and grow your own small business.