I read this great blog by Ken Reda on the Profit Advisory Group site. The blog “Is Your Company Culture Costing You Money?” is fascinating. Those of you who regularly read my blogs (thanks!) know I’m all about company culture; I am a huge believer in the influence a positive company culture can have on the productivity of employees. I know this from experience because I’ve worked in some companies with great cultures and I’ve worked in some companies with, shall we say… less-than-great cultures. (Don’t go to my LinkedIn profile and try to guess which ones are which!)
And of course, working in the ethics and compliance industry, I’ve learned a thing or two about how to help create and maintain ethical company cultures.
Why Culture Matters
Ken writes that Howard Stevenson, Public Admin Professor and writer for Harvard Business Review has said that while factors like location, quality, price, marketing, etc, are all very important differentiators for companies, “maintaining an effective culture is so important that it, in fact, trumps even strategy.”
That’s a pretty huge statement. But we’ve seen other evidence that culture is correlated with success. We’ve written before about the correlation between ethical culture, employee retention and customer loyalty. While culture is not always easy to measure, one measurement of ethical cultures is Ethiphere’s annual World’s Most Ethical list. While it hasn’t been updated in a while, this chart shows how the World’s Most Ethical list consistently outperforms the S&P 500. So culture isn’t just a nice-to-have from a productivity standpoint or a good-to-have from a compliance standpoint. It’s plain necessary from a financial standpoint.
How Employee Feedback Fits In
What got me thinking after reading Ken’s blog, though, was a paragraph he wrote about employee FEEDBACK: “This takes us back to the original question; does your culture cost you money? The quickest way to answer that question may be to pose a different question – How comfortable are your employees giving and receiving feedback? When employees aren’t empowered enough to give feedback they eventually end up with a CYA mindset.”
A CYA mindset is so damaging. It’s crucial your employees feel empowered to speak. The best cultures breed openness. We’ve written many times about how ethical cultures encourage people to speak-up. Cultures that discourage open communication lead to fear, which is a breeding ground for misconduct.
There are many ways to establish open communications and cultures. But I’ve often felt that we miss a key opportunity to get feedback during ethics training. Yes, ethics training, sexual harassment training, compliance training, anti-bribery training… is all about delivering a message to learners. Yes we give people a chance to ask questions. But I think we have a great opportunity to solicit information FROM those learners during training as well.
For instance, at the end of a sexual harassment training course there may be a short quiz that asks the learner a few questions to ensure he or she understood the content. Why not ask one more question along the lines of “how comfortable would you be, on a scale of 1-5, coming forward if you witnessed a co-worker engaging in behavior you felt was in violation of our sexual harassment policy?” Or “how would you rate our company culture, on a scale of 1-5, in terms of our ability to provide a harassment-free workplace? Do you have any suggestions for areas we can improve?”
Giving employees the opportunity to give input and help shape your culture does three things for you:
It gives you a solid measurement by which to gauge your culture; ask the same question consistently and you can measure the trend.
It helps establish a collaborative, open and honest tone for communication.
It shows, even subtly, that the company cares about the employees’ perception of the culture.
Ken points out in the blog that SAS CEO Jim Goodnight recognizes the importance of company culture when he states: “My chief assets drive out of the gate everyday; my job is to make sure they come back.” He attributes their 2% turnover rate (which is insanely low – it’s typically 22% in their industry) to the culture… so the culture saves them a ton of money on recruiting and training. And let me tell you, you don’t get a 2% turnover rate without encouraging open communications and inviting employees to help you build an open, ethical culture.
Look for Opportunities for Dialogue
Employees are our biggest asset and we invest a lot of time and money on ethics training, so why not make that training a two-way street? Anti-bribery training is a great way to open up a dialogue about ethical behavior and decision-making; sexual harassment training is a perfect topic for a conversation about how we should treat each other and create a safe and respectful work environment. We tend to think of training events as one-way communications – either computer-based courses or in person lectures. If we look at them as two-way communications we can take advantage of that time and attention and get some valuable employee feedback.
Ethics training and culture are closely tied together, anyway. And, as Ken points out in his blog, in cultures where employees are scared to give feedback, mistakes get covered up, not fixed – that is the “CYA mindset” mentioned earlier rearing its ugly head again. Of course, I tend to look at things through the ethics and compliance lens given what I do, but beyond that, think of how damaging a CYA culture is to innovation or creativity, let alone to recruiting or growth or any other company success indicators.
I found Ken’s blog inspiring and suggest you give it a read. I’d love to hear your thoughts in the comments.