Monday, February 22, 2010

The Cost of Culture Development

The costs of building a more productive culture are quite small, mostly time. Here are the elements of culture change, their costs, and a quiz on your existing culture related expenses.

Monthly Meetings

There will be one additional monthly management meeting, first at the top-level and then at other levels. There managers discuss people and cultural issues. These discussions soon solve long-standing inter-departmental, relationship, and communication issues.

Involving Employees

The Golden Rule of culture is, "If People are Affected by a Decision, Involve Them". This takes time. Few managers complain because they enjoy it, and the benefits are immediate and obvious.

Building Relationships

Strong relationships are the foundation for improved communications, better decisions, and improved overall performance. I recommend that managers take one hour a week to sit quietly one-on-one with another person in the organization and get to know them better. We call this process The Cultural Interview. It takes approximately 60 to 90 minutes per week and is the most powerful action a leader can take to develop the culture.The ROI on culture development is high because the people area is largely untapped territory, with large potential.

Executive Coaching

If you bring on board an outside culture expert you can expect their fees to be from around $125 to $300 per hour, plus travel expenses. In a company with 200 to 800 people, there might be a two-person consulting team on-site for two or three days a month. This is about $30 per employee per month, a minimal cost relative to the gains.

Nationally, the Cost of Underdeveloped Cultures Is Enormous

Nationwide the greatest loss to American business is the withheld energy and creativity of employees at all levels. If you assume even a minimal lost productivity of 5%, the annual cost is many billions, probably in the trillions of dollars. Developing a powerful workplace culture—where people bring more of themselves to work—saves you your share of this national waste.

In many companies, reallocating a small part of the money now spend on absenteeism, worker's compensation, high turnover, low productivity, and time consuming disciplinary procedures, would more than cover the costs of getting their people involved in a positive way.

Estimate Your Current Culture Related Expenses

Approximately what do spend on?

Excessive worker's compensation ......

Recruitment, retention, training.......

Low productivity ...............................

Time consuming discipline ..................

Problems from miscommunications ....

Absenteeism........................... ....

Other _______________________


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