THE IMPACT OF CULTURE ON EMPLOYEE ENGAGEMENT, RETENTION AND INSPIRATION
by Mona Mitchell, President and CEO ACHIEVEBLUE Corporation

When your employees come to work, do they really come to work? Do they look forward to their business day with a high degree of enthusiasm, commitment and engagement? Do they recommend your organization as a great place to work among their business colleagues and friends? As a business leader, are you paying as much attention to “what is it like to work here” as “how are things done around here”?
The answers to these questions are not trivial. Employee engagement studies consistently link the engagement and retention of talent to bottom line business performance. Beyond the reality that it takes between 18-24 months to recover the costs of recruitment, turnover costs are estimated at $5 trillion annually. A recent study of 85,000 employees stated that only 14% of the worldwide workforce is fully engaged and the majority are moderately engaged at best while a quarter of them are actively disengaged and waiting for the economy to turn around. ¹

It Starts With Vision

Here’s a little envisioning exercise to get started.
Imagine your people:

• sustaining alignment to a common vision and values
• demonstrating self leadership consistently
• feeling motivated to help the organization succeed
• being inspired and reenergized
• promoting trust, passion, integrity for the organizations and its leaders
• putting your customers first
• promoting and delivering innovative solutions
• approaching their work with passion
so that you can:
• provide a strong consistent internal and external brand across the entire enterprise
• reduce turn over and the costs associated with it
• define and deliver on your value proposition based on the unique needs of your clients
• inspire employees to help you execute your strategies year after year – doing the right things right
• engage and retain top talent
• be a leader in your market
• achieve sustainable profitability and growth.

All of this must align to your organizational strategy. And the fact is that, as the means to achieve your strategy, your people must be willing and eager to do a lot more than “letter of the law” compliance to job descriptions and functions. In other words, they must be strongly engaged, rationally and emotionally. This links directly to the employee’s attitudinal attachment to their job and organization, behaviours that are aligned to the best interest of the organization, and the willingness to invest in discretionary effort to do so. ²
Significantly, employee engagement has far less to do with investment in infrastructure, titles and salaries, and much more to do with organizational culture.

Culture Trumps Strategy Every Time

Lou Gerstner, former CEO of IBM Corporation said "Underneath all the sophisticated processes, there is always the company's sense of values and identity. It took me to age fifty-five to figure that out. I always viewed culture as one of those things you talked about, like marketing and advertising. It was one of the tools that a manager had at his or her disposal when you think about an enterprise. The thing I have learned at IBM is that culture is everything."
Organizational culture provides the underpinnings for the success or failure of an organization in achieving its strategic goals. As a critical component for success, organizational culture speaks to the very real issue of “what is it like to work here, and what are the attitudes and behaviours I need to fit in and succeed?”. Either due to non-awareness or conscious discounting of its impact, many organizations fail to invest in creating and sustaining an organizational culture that aligns human capital energies with immediate and strategic organizational direction and goals. Instead, massive investment in policy, technical competency and reporting structures is pursued, with less than expected results. By identifying and correcting the gaps between current culture and one that enables achievement, innovation, talent attraction, development and retention and positive collaboration, organizations will be better equipped to realize their objectives and proactively shape their market space.
Research indicates that organizations may drive the following benefits from investing in the development of cultures that are constructive, robust and productive:

• High levels of employee motivation and loyalty to the organization
• Increased team cohesiveness and effectiveness
• Increased efficiencies resulting from more productive employee behaviour. ⁵

Organizations that most effectively motivate their employees to pursue future growth and concentrate on current performance use incentive structures supplemented with constructive corporate cultures. The result: employees see a close fit between the organization’s long term interests and their own. By combining empowerment, line of sight to organizational goals, the decision making authority to positively impact goals, and tangible rewards (monetary and other), organizations can more than double the level of engagement in their employees. ⁴

Walk The Talk on Your Values, and Walk There With Your Employees

A company's cultural traits may impact an individual’s performance and engagement by more than 30%. In 1987 the late Jack Kemp, former Secretary, U.S. Department of Housing and Urban Development and former Member of Congress said “there are no limits on our future if we don’t put limits on our people”.
To a very great extent, the day to day experience of corporate culture involves tangible and consistent evidence that the organization addresses and leverages their stated corporate values in everything they do internally and with others, including partners, suppliers, regulators and customers. The trickle-down of what is actually going on at the C-Suite level to the attitudes and behaviours at the tactical and operational levels of the organization will have either a positive or negative impact on business performance.
Leader attitudes and behaviours play the most important role in employee engagement, retention and inspiration. A Corporate Leadership Council study of 50,000 employees in 59 countries reveals that of the 160 drivers of engagement and retention, 22 of the top 25 drivers of employees’ intention to stay are leader-led. Leaders are a key conduit to how an employee connects with the organization. When considering leadership development a huge focus should be on drivers that are proven to impact employee retention and engagement.
Toyota Motor Manufacturing in Kentucky, Toyota’s largest US plant is cited by experts as consistently having levels of employee engagement at 10% higher than US average. The VP of Administration explains this is a result of the company’s guiding principles, including a corporate culture that supports individual creativity as well as the value of teamwork.
SAS Institute leverages its corporate culture of respect for employees, as conveyed through its extensive employee-friendly benefit offerings and ingrained sense of employee accountability as a competitive advantage in employee attraction and retention. This has impacted their turnover rate and has stayed below the 10% mark.

Action Plan for Creating and Maintaining a Culture of Engagement and Retention

Employee engagement empowers strategy execution through the creation of an organizational culture that reinforces achievement aligned to strategy, innovation in thinking and doing, professional development on an individual, team and enterprise levels, and a focus on collaboration. Getting there requires the following key actions:

• Ensure employee buy-in by involving employees in
  • identifying the current culture
  • developing cultural goals
  • Implementing action plans to achieving the goals
• Establish a link between employee’s work and company’s strategic objectives and its values
• Reward employees to support culture change
• Employees should be held accountable for helping the organization achieve its cultural goals
• Management should articulate the key roles of employees in culture change success.
• Assess Leaders and Employees regarding the Ideal and Current culture
• Assess Leadership Impact on culture along with employee engagement, retention and inspiration
• Share culture results with all employees
• Develop Leadership commitments to drive a culture with a focus on engagement, retention and inspiration – People and Business
• Engage employees to develop action plans for culture transformation
• Develop and share the culture strategies that will bridge the gap between Ideal and Current culture profiles across the organization
• Encourage and support the development of a culture team whose mandate is to hold the leaders accountable for their commitments
• Re-measure periodically to ensure sustainability of the transformation strategies.

A passionate engaged workforce working within an inspiring culture enables breakthrough performance. Beliefs drive business.
Sources

Citations

1. Corporate Leadership Council.
2. Ravin Jesuthasan, “Business Performance Management”, WorldAtWork Journal, October 1, 2003.
3. Victor Tan, “Benefits of Corporate Culture”, New Straits Times, July 20 2002.
4. Ravin Jesuthasan, “Business Performance Management”, WorldAtWork Journal, 4th Quarter 2003.
5. Victor Tan, “Benefits of Corporate Culture”, New Straits Times, July 20 2002.
General

• Defining Employee Engagement, Corporate Leadership Council, March 2004.

Mona Mitchell, President and CEO, ACHIEVEBLUE Corporation, www.achieveblue.com. Email mmitchell@achieveblue.com. ACHIEVEBLUE Corporation works with organizations to align leaders and employees with the required culture to drive business strategies.

We assess, design and deliver the processes and tools required by organizations to implement the culture change that will bridge the gap between an organization’s Ideal culture profile and its Current operating culture.

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