Company culture is the personality of the organization. It goes beyond what’s written in the company values and what’s sold to employees and customers at the front door. It’s what actually takes place behind the scenes, it’s the unspoken. The culture of an organization consists of what behaviors are accepted and rewarded, how decisions are made, how progress happens, who has authority, what actually transpires in the day to day activities including how team collaboration (or lack thereof) goes down. It’s what’s discussed around the water cooler and it’s in the air that everyone in the company breathes.
Great company culture is pleasant, energizing, high-performing, rewarding, positive, light and fun. In a great culture, employees, managers and owners have a sense of purpose and drive to accomplish great things, together as a team. The business and everyone in it celebrates wins and strives to do what's best for the company as a whole. Employees are not engaging in drama, and the operation is not bogged down by excessive issues or internal conflict. Everyone is focused on the clients, customers, products and services. Walking into a great company culture leaves you feeling like the people there are in it to win it.
Poor Company Culture is the opposite. Tensions are high and the air feels like you could cut it with a knife. There is turnover, gossip, underperformance, absenteeism, tardiness and other issues bogging down the daily operations. Owners, managers and clients are frustrated and lack confidence that things will change.
Poor company culture costs businesses thousands of dollars per person when it results in turnover and more when poor behavior and performance stays and lingers. One in five Americans leaves a workplace due to poor company culture, costing American businesses over $223 Billion in turnover costs according to SHRM. Many business owners and employees complain of a toxic culture but don’t think it can be fixed. In most cases, it can be, if the leaders are ready.
“Customers will never love a company until the employees love it first.”- Simon Sinek
Poor company culture is insidious and costly, and to turn it around, important shifts need to occur. A toxic or underperforming company culture needs transformational change. Transformational change is the process of creating significant change, a 180 degree turn that results in positive, long lasting behavior and performance improvement. This type of change is necessary to tackle the big issues that impede you or your organization from achieving the desired results. Transformational change can produce significant improvement in performance but requires intentional action with clear direction.
The kind of change needed for true transformation requires attentiveness and transformational Leadership- the guidance through change that creates sustainable, positive, long-lasting results.
“Growth is painful. Change is painful. But nothing is as painful as staying stuck somewhere you don't belong.” ― Mandy Hale
We are all inhabitants of a changing world. We have the choice to embrace the need to change, avoid the need for change, or actively turn our backs and run from it. Transformational change re-structures the pattern of how things previously were - the things that weren’t working - and changes the trajectory for improved outcomes.
The 5 Stages of Transformational Change
1. The first stage in transformational change of company culture is having awareness that there is an issue.
What are the signs of poor company culture?
● High rate of turnover
● Managers or employees not acting in accordance to the company’s values
● Unfriendly competition between employees
● Absenteeism and tardiness
● Communication breakdown
● Unhappy customers
● Excessive requests for time off, compensation increase or other personal needs
● Productivity decline and operations interruptions
If the signs are clear, and there’s acceptance that something needs to change, this is the first stage of awareness.
2. Secondly, there needs to be a desire and commitment to making a change. Commitment is defined as the state or quality of being dedicated to a cause, activity, etc. In order to make a true transformational change in the company’s culture it requires deep commitment.
3. Awareness and commitment simply aren't enough, leaders must do the work to address the culture issues and face them head-on.
Here are just some steps to do the work and transform the culture:
● Defining the company’s values and reinforcing them
● Creating an employee handbook and re-training on company policies
● Strong operations leadership committed to setting and holding the standard
● Ensuring the right systems and people are in place to carry out the mission
● Getting feedback from employees and managers through a third party
● Creating a transformation plan from feedback, and carrying it out phase by phase
● Conducting evaluations to recognize great performance and correct underperformance
● Celebrating wins and announcing milestones throughout the company
4. True, transformational (long-lasting) change requires developing better habits. Habits require practice.
Practice means consistently reinforcing the expectations through discussion, celebrating small wins, correcting issues in real time and recalibrating as needed.
5. Repeated long-term cycling through awareness, commitment, doing the work, and practice will eventually result in mastery.
Mastery feels like second nature. It no longer requires the type of effort put forth in the first 4 stages. It can now be an ingrained part of the company culture.
Real, significant change is difficult because it’s a matter of breaking poor habits. As humans, we’re so used to running on autopilot that something major usually has to happen or some outside force has to get our attention creating awareness around the ongoing issues.
Until leaders have awareness that poor culture is affecting their organization, commit to making a transformational change, practice enforcing the positive changes, do the work to make those positive changes stick and continue to pursue mastery of excellent culture they will be stuck in the same patterns of turnover, misalignment in values, unfriendly internal competition, absenteeism, tardiness, gossip, communication issues, unhappy customers, and excessive interruptions to daily operations.
If you’re aware something needs to change in your company culture, and you’d like to discuss what it would be like to work with a partner to guide you through the process, contact SCG Consulting Group at systemsculturegrowth.com/contact.
About the Author
Jessica Holsapple has been leading, growing, and transforming organizations around the globe across almost every industry for over 10 years. With a background in operations leadership, staffing, and recruiting Jessica has hired, trained, and managed thousands on the systems she’s developed, guiding teams through transition when the stakes are high. With the belief that building a business from start to finish should be simple and fun, and the passion for working with entrepreneurial ventures, Jessica started SCG Consulting Group in 2015 and developed THE SCG SYSTEM™. Jessica studied Organizational Leadership in an MBA program at the University of Arizona, earned a Bachelor’s Degree in Management from Northern Arizona University, and holds certifications in Project Management and Non-Profit Administration. When she’s not working alongside visionary leaders and their teams, she enjoys the gym, traveling, and being active outdoors. Above all, Jessica is committed to helping leaders get out from under their business and back into the driver’s seat.