How important is company culture to employee productivity?

Research seems to suggest that those companies who invest in “companyculture” tend to do better than their competitors in the productivity stakes.But sometimes the noise surrounding the whole concept of corporate culture canmask what it’s really about.

Here, we look beyond the gimmicks to try and pin down what areas seniormanagers should be focusing on if they are serious about making theirorganisations more productive.

Company culture: what are we talking about?

We’ve all seen job advertisements where potential recruits are told that“X firm prides itself on a strong company culture” followed by a list ofbenefits: “free breakfast, subsidised canteen, pool table, gym membership,away-days, social fund…

But introducing a long list of perks is not necessarily the same thingas building a strong company culture. A formaldefinition of theconcept refers to “the beliefs and behaviors that determine how a company’semployees and management interact and handle outside business transactions”.You could frame this more simply by asking the big question going through theminds of potential recruits: “What’s it really like to work here?”

Among other studies that look at the relationship between culture andproductivity, Prof. James L.Heskett’s book The Culture Cycle: How to Shape theUnseen Force that Transforms Performance suggests that a company with aneffective culture can boost performance by 20-30% compared to “culturallyunremarkable” competitors.

Communication, decision making, personal and professional development,wellbeing: if boosting productivity is a priority, these are the specific areasof company culture to consider closely…

More effective communication

How are your employees expected to interact with each other? Arehead-to-head conversations part of your company culture or are they frowned upon?Your attitude to this can have a direct bearing on productivity.

For instance, research indicates that businesses rely too much on emailas a form of internal communication, with one study suggesting that as much as 80% of business is ‘waste’. Much of this traffic concerned conversationsthat would be more effectively dealt with face-to-face.

Picking up and following text threads can be a time-consuming process.Creating a culture where employees are encouraged to actually speak toeach other to resolve issues could slash the time it takes for those issues tobe resolved.

Engagement: getting your staff involved…

Research from Gallupsuggests that just 13% of employees describe themselves as ‘engaged’ in theirjobs, while 26% class themselves as ‘actively disengaged’. There’s more atstake here than simply making your employees feel “more involved” just for thesake of it. Engaged employees, it seems, make for more a more productiveworkforce, with studies showing that highly engaged employees are 38% more likely tohave above average productivity.

So how do you avoid paying mere lip service to the idea of employeeengagement and integrate it into your company culture? Keeping staff ‘in theloop’ and actively involving them in the decision making process, providingregular feedback and encouraging innovation: these are all areas to focus on tokeep engagement levels high.

A culture of upskilling

Why should your company culture feature a commitment to continuingprofessional development? Are you at risk of upskilling individuals only forthem to move elsewhere, enabling other employers to reap the benefits of yourinvestment?

It seems not. Having the right employee development programme in placecan be a significant driver for attracting and retaining top talent. What’smore, a commitment to workplace learning tends to be associated with anincrease both in productivity and in profit generated per employee.     

Promoting wellbeing

There’s no shortage of research showing the links between work-relatedstress and absenteeism – and the knock-on effects this can have onproductivity.

It’s the norm for companies to claim to be committed to staff wellbeingin their corporate literature. But sometimes it’s hard to reconcile theseclaims with reality. For instance, do you claim to promote a healthy work-lifebalance but then laden employees with workloads that are impossible to getthrough in normal working hours? Do you in theory allow working from home butfail to give employees the tools to stay connected remotely?

Goldman Sachs hit the headlines when it told employeesin no uncertain terms that its office was to be considered out of bounds atweekends in an attempt to address burnout. Consider what practical steps youcan take to make a difference in this area.

There’s a strong link between company culture and productivity. Toencourage the right culture, think less in terms of gimmicks and focus more onchanges to behaviour and practice that are likely to make a real difference.