Your business culture is where you need to focus boardroom attention to achieve significant productivity improvement, as Fiona Anderson of valuingYOU – a member of Hennik Edge’s networked expert advisory team – explains.
Improving productivity is always important, but in the UK it is especially urgent. The ONS (Office for National Statistics) states that UK workers produce 16% less compared to the average of the other G7 countries.
There are many reasons for this but the widely acknowledged issues of manufacturing struggling to attract and retain skilled and diverse talent, and the failure to implement and reap the rewards of Industry 4.0, play an important role.
It was evident at November’s The Manufacturer Leaders Summit that ‘culture change’ will be key to solving these (and other) problems that bedevil UK manufacturing.
Business culture can be your Achilles heel or your competitive advantage. In their Annual Review, Totaljobs.com estimate that, ‘Two in three workers are planning to quit in 2018, with just 12% saying they enjoy their current job’, and TLNT.com point out that, ‘Engaged Employees are 87% less likely to leave their organisations than disengaged employees’.
So, remember, it is your culture’s DNA that attracts and retains highly committed staff. Likewise, it attracts and retains loyal customers.
Loyal customers and staff are much more profitable; they tell others about you, and in fact they do your marketing and recruitment for you.
What exactly is culture?
Culture describes ‘how things are done around here’. It is the DNA of your business and it is unique. Considered one of the softer aspects of business, culture is the hardest aspect to shape and change.
Ignored, it festers in the ‘too difficult box’, manifesting its own unmanageable characteristics and unproductive, toxic behaviours. Highly successful businesses thrive on their culture, attracting and retaining talented staff and loyal customers.
The first step in seeking productivity improvement is to examine whether your business culture is fit for purpose; a good place to start is by considering the following questions.
How clear are our expectations for each employee regarding:
- How clear are our expectations for each employee regarding: Our mission, vision and values? The behaviours expected and what they can expect from others? Their role, measures of success and development? Our business performance and how they individually contribute to our plans and vision? How do we attract and recruit the emerging skills needed to support our vision?
- How do we give feedback to staff to motivate, develop and retain them?
- How do we know how engaged our staff are?
- How do we as leaders inspire all the above?
These questions start with ‘how’ to encourage you to reflect on your behaviours and business culture. Read your answers. Do they describe tasks and processes – i.e., what you do – or do they describe your behaviours?
If your answers describe tasks and processes, our experience suggests a change in culture will be key to increasing productivity.
Building your business case for culture change
Next, you need to persuade others of your findings and start to build a case for change; areas to consider include the following.
Employee Engagement – What does your staff survey tell you about what your staff is thinking and feeling? In Nailing the Evidence, Engage for Success demonstrate a correlation between employee engagement and high productivity.
Furthermore, our experience at Hennik Edge confirms Gallup Research data:
- Only 17% of the UK workforce is engaged – prepared to go beyond what is expected of them
- 26% are actively disengaged – their mood adversely affects the productivity of others
- The remaining 57% feel no meaningful attachment to their job or company – they are doing the minimum.
In their white paper, The Cost of Disengagement, Achievers estimate disengagement costs approximately £3,400 per £10,000 annual salary. In the same paperm Achievers also estimate that 65% of employees leave because of lack of recognition.
In What Workers Want, the Hay Group found that senior replacement costs range from 50% to 150% of salary, and ACAS noted in their report Replacing an Employee that the average staff replacement cost is greater than £25,000 due to loss of productivity.
So, to calculate the real but hidden cost of your business culture, you need to combine your staff survey results and staff turnover.
Attracting and retaining talent
Employers generally compete on salary and benefits. Again, in What Workers Want, the Hay Group found that culture is the ‘second most influential factor after pay and benefits, when an engineering professional decides to stay or accept a new role.’
Honestly reflect on how many times have you failed to recruit the right people? What is this truly costing you in in terms of loss of productivity and HR and management hours?
Changing culture: the key to improving productivity
Engaging leaders develop a contagious culture threading through everything they do. They build and encourage a culture creating an emotional engagement for both staff and customers.
The valuingYOU ‘Highly Productive Culture’ model (opposite) identifies the components, accountability and consistency that are needed to achieve a highly productive, business-wide culture.
Here are some key principles for you to consider – try and identify the characteristics that exist or are absent within your business.
Brand is not a logo – Thriving businesses have a powerful brand, exuding personality, promise and consistency in everything that the business does. They build an emotional attachment through the experience they create.
A successful brand attracts and retains talented people and loyal customers. For example, award-winning Dura Automotive is known to customers, employees and potential recruits for its strong teamwork and the quality of its products.
Leaders – High-performing leaders clearly define their brand and entwine it through everything they do, from mission, vision and strategy, to values, behaviours, systems, processes and the working environment. The brand ‘lives’ throughout their decision making, through their actions and provides guiding principles for every crisis they face. Dyson claim that they don’t have a brand. Their brand is James Dyson himself, his personality and ethos is threaded through everything they do.
Values/behaviours – Through clearly defined values and behaviours, staff understand what is expected of them. They know what is acceptable and what to do when something goes wrong. The recruitment process attracts the right people, induction and development build on initial expectations, and managers inspire and encourage performance to improve productivity.
Monthly one to ones – Two-way conversations, for manager and staff to reflect on what they do (tasks) and how they do it (behaviours). They reflect and share what is going well, receive feedback and encouragement to progress.
That’s it – you are now in an informed position to start addressing your business culture. Here are the next six steps for you to put theory into practice.
- Circulate this article in advance of your next executive meeting.
- Invest 60 minutes at your meeting to explore all your colleagues’ responses.
- Identify your strengths and your weaknesses.
- Develop an action plan.
- Clarify if you have the capability and capacity to develop a highly productive culture.
- Contact Fiona Anderson to explore how working with Hennik Edge can help increase productivity through business culture change.
Fiona Anderson is a specialist in culture change and Director of valuingYOU. She is a member of Hennik Edge, The Manufacturer’s networked expert advisory team.
She was named as an Exemplar Driver of Culture Change in The Manufacturer Top 100 2015 report, is the founder of the Greater Birmingham Engage for Success Network, and is a regular writer for CIPD (Chartered Institute of Personnel and Development).
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