Monday, February 22, 2010

Benefits of a Good Company Culture

Because the company culture influences everything and everyone in it, a well-developed company culture creates positive changes across the board. Managers who have developed their company culture report improvements in many areas, including:


A well developed culture gives dramatic, sustained increases in productivity and performance. A 10% increase is minimal. I had one client where productivity doubled in 18 months. While you can expect productivity to rise to somewhere between these two points, continuous improvement is the norm. Theoretically there is no limit—if you keep working on the culture.


High morale is a key to success. It is closley connected to trust, purpose, team loyalty, pride, and faith in the leadership—all qualities that improve as the culture develops. See Morale


Employees know cost control is important. As the culture builds, people take responsibility for costs. With widespread focus, administrative and operating costs drop well below industry norms.


Often the underlying reason for improving the company culture is profits. Because the developing culture creates across-the-board improvements, increased profits are inevitable.

Supply Chain

Supply chain efficiencies depend very much on cooperation between multiple functions and levels. As the culture develops, relationships, cooperation and communications improve. The supply chain becomes more efficient and streamlined.

Injuries and Claims

This is a complex area, closely related to attitudes and relationships. As people see each other in new ways, lost-time injuries and worker’s compensation claims drop. Sometimes this is quite sudden and dramatic. See the million hours without a lost time injury described in Example—A Plant Turnaround.

Insurance Rates

Along with a safer workplace, with fewer injuries and claims, come lower insurance rates.

Customer Service

As the culture builds, managers learn to better manage the quality of everyone's experience, inside the company, and with outsiders such as customers, clients, suppliers, and other corporate entities. Customers who like you, return more often, buy more, and recommend you to others.


When you have a great place to work—where people can satisfy their needs—they just don't want to leave. See Turnover


It is common sense that there will be less absenteeism when people like their jobs. They also develop a new attitude towards their fellow workers and to the problems that their absenteeism creates for them.


A well-developed company culture, clearly stated in promotional materials, is a powerful recruiting point. Companies with an open, participative workplace, where people enjoy working, and have broad opportunities for growth and creativity, attract top candidates.

Employee Morale

At the root of morale are trust, a clear purpose, team loyalty and support, and faith in leadership and the success of the organization. These increase as the culture develops. See Morale.

Employee Motivation

When people can fulfill their desires around work they are highly motivated.

Union-Management Relations

You will see a move away from adversarial relationships and towards cooperation. You will have few grievances and low workers compensation costs. I have clients where grievances dropped to zero.

Openness to Change

A striking increased openness to change and the desire to make things work. As trust and responsibility increases, employees initiate significant improvements in operations.


When the leaders show that they want everyone involved, people step forward in creative and productive ways.


Developing the culture trains managers in people leadership skills and gives them a clearer sense of their role. Many managers say that the culture development process was the most important experience in their career.


With improved openness and trust, people participate more in meetings so they become more energetic, focused, and creative.


Smoother mergers and acquisitions, with higher success rates. People get involved and make them work. See Mergers.


By definition, a developed culture increases cooperation, collaboration, and motivation.


Expect improved teamwork and communication between people, divisions, and levels.


The culture change process improves relationships between people, levels, and departments.


Problems are solved where they happen, or by those affected. They are not passed up to management.

Satisfaction, Happiness, Joy and Pleasure

Last but perhaps most important, there are few things more satisfying than being part of a well-developed company culture. It is a real pleasure working in an organization where people enjoy each other. Satisfaction and happiness go hand-in-hand with improved performance.

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