How Much Does Creating A Great Culture Cost?
Updated: Jul 19
When I talk with people about their organization's culture, there's usually a point in the conversation that goes something like this:
"...of course I would like to have a great culture at (insert organization name here) so - bottom line - what's it going to cost me?"
That's a great question and it has a good news answer - a great culture doesn't cost anything. Actually, if you think a great culture can be purchased - through bonuses, events, giveaways, parties, etc., you will find out that there is negative relationship to this type of behavior... the more you try to "purchase" culture, the greater the distance your culture will move in the wrong direction.
Most people are puzzled by this fact. Isn't it true that if you ask your people what the company could do to improve the culture, they will answer with "What about a company Holiday Party?" or "Couldn't we have pizza brought in once a month?" If that's what your staff is saying they want, why won't it work to improve your culture?
To answer this question, it's important to understand that any organization's culture is actually something that was formed over time as people have observed - in the moment - how "things work around here". Consider this (rather clinical) definition:
"Organizational culture is the collection of values, expectations, and practices that guide and inform the actions of all team members."
Creating a culture isn't something that you have a meeting about and then launch; a culture accumulates over time. You do have a culture today in your business - good, bad or indifferent - and it is what has accumulated up until this very moment as you have gone about doing whatever it is that your business does.
Think of it this way: your organization's culture is like a sedimentary rock formation. It has accumulated gradually over time, layer-by-layer, until today and your entire team is now standing on top of that cultural sediment, working with that culture as their foundation.
Culture is being formed as your staff observes what works and what doesn't work to get ahead in your organization. What behaviors are rewarded and what behaviors are punished? How is conflict addressed? What happens when someone makes a mistake? How does the company leadership respond to issues like quality, customer satisfaction or equality of opportunity? Culture is created by the consistent, observable patterns of behavior within organizations. The philosopher Will Durant said, “We are what we repeatedly do.” In your world is that fact good news or bad news?
So - the good news is culture doesn't have an explicit cost in dollars and cents. And that's also the bad news... For your organization's culture to be something that contributes to its success it has to be consistent with what is happening in the everyday operational reality of the business. Do you want employees to turn their expense reports in on time and properly completed? They need to see that is how leadership does their expense reports. Do you want your front line staff to treat your customers properly? Then you will need to make sure they don't hear customers spoken of derisively by leadership. Do people get rewarded for getting to work early and staying late or for producing results? Is negative feedback from your staff met with suspicion or anger or (worst of all) retribution? If it is, your culture will skew towards hiding errors or silencing anything that isn't "the norm" - rocking the boat only creates problems and who needs more problems?
It shouldn't be a surprise that it's the day-to-day behavior of leadership that sets the culture up for success or failure. When there is inconsistency between the values espoused by an organization and the way leadership acts, the "values" will be discarded in favor of "what really works". "Do as I say, not as I do" never succeeds...
At one point in my career, I was "parachuted" into an organization that was having a lot of difficulties and needed to be turned around. One area on my things-to-do list was to understand how well our location was implementing the overarching quality system the entire corporation was using to improve results. When I met with my new staff, I was told everyone was "on board" with our efforts to bring a greater awareness of quality at our location; I was assured that we had a culture that was focused on improving our quality. I remember thinking "What a relief - one less thing to focus on!" Unfortunately during my initial week in the facility I found a plaque acknowledging the shop had achieved a specific step in the quality system implementation laying in a pile of dust behind the door to the break room. Finding that plaque - and knowing no one on my leadership team had even noticed it was missing - told me everything I needed to know about the actual culture of this facility. Quality went back on my "to do list" and (eventually) actions consistent with a quality focused culture become the norm within my leadership team and then the rest of the organization.
It's not uncommon for an organization to say one thing on their list of company values and do something completely different in the course of "doing business". Your culture will never rise above the things your staff observes leadership doing. If your leadership operates with openness and fair play, your culture will reflect that. If your leadership holds their cards close and refuses to be transparent, your staff will mirror those values. If leadership shows trust and respect to each other your culture will become one of mutual trust and respect.
Do you want to know how you're doing in this area? In a Core Beliefs and Culture survey by the consulting firm Deloitte, the following statements were offered for consideration:
How would your staff respond to those statements? Deloitt found that staff who could answer "Yes" to them (especially the last one) identified themselves as "happy at work" and as "valued at work" and were significantly more engaged than those who responded with a negative answer. If you need a refresher on being explicit about the culture you intend to create, you can review "Does Your Culture Stink?" for details...
Don't have a big budget but want a great culture? I have good news for you - there's no upfront cost to get out there and model the things you believe are important to making your business successful - culture is contagious.
Culture can't be bought, it can only be caught!
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