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Internal Clients, Culture and Catastrophe Oh My!

We love it when the research we do for our clients applies to more than just that one client. And we really love it when we can use that research to help people we haven’t even met yet (maybe that’s you!), because we believe that stronger businesses make for a stronger economy, and that makes for more opportunities all around, which in the end, leads to a much better world.

Badda bing badda boom!

The research we did for one company, whose goal is to improve internal business culture by improving communication, is definitely information you need to know.

During their Impact Assessment we discovered what a catastrophe it can be when your culture clashes with your employees – who are your internal clients – because it affects your company in a big way, and on a number of levels.

But let’s back up the bus a bit first….and start by defining what a positive work culture actually is, because there can be a lot of definitions. Culture is the character and personality of your organization. It’s what makes your business unique and is the sum of its values, traditions, beliefs, interactions, behaviors, and attitudes.

A good definition, we think.

Now a positive culture holds values of respect, support, collaboration, cooperation, inclusion, and so on; and those values have to go beyond lip service to be effective. Your actions count.

We’ve all been in a place, or know a person, who says one thing and does another. Do you trust them? Noooo!

When you work in a place where you can’t trust the environment, or the people in it, that causes stress. A lot of it.

Work stress alone has astronomical costs to a company. In Canada, absenteeism due to stress is up 300%, at a cost of $3,550 per employee per year, according to Watson Wyatt Canadian Staying @ Work Survey.

Then add in the hidden costs of errors, turnover, and poor customer service because your employees are stressed out and money is flying out the window!

There’s nothing like an employee having a bad day that turns into losing a customer for life.

You can probably think of a business right now that you wouldn’t step foot in again because of the crappy customer service. That business, guaranteed, is suffering because of bad culture and a management team that most likely isn’t doing anything about it, or worse, are perpetuating it, which leads to catastrophic losses for the company.

Eventually, that business will have to shut its doors. [Enter EXTINCTION, stage left.]

Employees that don’t like where they work become disengaged and that directly impacts your bottom line in a BIG way.

The statistics on disengagement in Canadian workplaces are shocking.

75% of people are disengaged! That’s disastrous.

When a company has a poor culture, it lacks a sense of team and support, and with that, productivity takes a big nosedive. In North America, that lack of productivity costs $350 billion a year.

How much might your company be losing in productivity alone? No need to think abstractly about it, we’ve got the goods for you:

According to Gallup, the hard cost of disengagement is 34% of the employees salary.

SALARY X 34% = NET LOSS PER EMPLOYEE/YEAR

So, at $60,000/year, a disengaged employee costs the company $20,400 per person. For a manager at $100,000, the company loses $34,000.

Want to calculate the specific disengagement loss to your company? Here’s the formula:

# OF EMPLOYEES X 75% X (SALARY X 34%) = COMBINED NET LOSS FOR EMPLOYEES

# OF MANAGERS X 75% X (SALARY X 34%) = COMBINED NET LOSS FOR MANAGERS

COMBINED NET LOSS FOR EMPLOYEES + COMBINED NET LOSS FOR MANAGERS = TOTAL LOSS

Let’s try out an example:

A company with 50 employees, at an average salary of $50,000/year, and 5 managers with an average salary of $80,000/year, is losing up to:

$739,500/YEAR!

That’s a WHOPPING hit on the bottom line. What could your business do with that kind of cash infusion? Every year!?

This is why controlling your culture is so important, and not just to your employees.

Of course, to do that effectively, you need to have a plan…and that’s something we’d love to help you with.
Let’s have a coffee and chat about your work culture and how you can effectively evolve your business!
[Enter WINNING STRATEGY, stage right. 😉]