In short, great company culture will give you:
high levels of creativity and innovation
improved customer service
a great workplace that customers like too.
Once people hear what an exciting workplace you have, they will flock to join you. Those companies that made it into the Sunday Times 100 Best Companies to Work For list have proved this in spades. Timpson is a perfect example of this.
In 2001, prior to the publication of the 50 Best Companies to Work For list, Timpson had 80 per cent employment. After publication this increased to 100 per cent. And by 2002, when named again as one of the 100 Best Companies to Work For, Timpson had a waiting list and was attracting women and graduates for the first time. The end result is a jump in profits from £3 million in 2001 to £6.5 million in 2003.
Such is the power of great company culture - energetic, dynamic people want to work with you, knowing they will enjoy their work and develop their career into the bargain. The business can choose the best person for the job, providing the very best option for success.
Once people realise they are in a good workplace, they want to stay. Great companies develop careers in house - growing their own to make sure they keep all the expertise and experience. They also involve colleagues in seeking the best way to run the business, listening to their ideas and concerns from the front line. What young high-potential person can resist that? From the moment they walk through the door, management are paying attention, listening well and looking to three jobs down the line - it is a compelling argument for commitment. Especially when linked to a challenging and honest workplace.
Claridges demonstrate this well. They instigated a major culture change, including consulting colleagues on what changes were necessary in the business, and daily staff briefings. The end result was that staff turnover reduced from 73 per cent to 16 per cent in five years.
Imagine the bottom-line impact when recruitment costs fall and less time is lost as the outgoing person shifts his or her attention away from the work and the incoming arrival strives to grasp the intricacies of a new job.
Provide challenge and support in appropriate balance and you will stimulate the creative juices. Couple this with a strong feeling of belonging so that people speak of the workplace as ‘their company' and ‘like family' and you have a heady mix for any growing business. Everyone in the organisation takes responsibility and focuses on what will serve the business best. People who feel an attachment to the community watch for pitfalls and have great ideas about how to deal with them.
Hiscox are a prime example. They were part of the syndicate that insured the World Trade Centre, so business took a major hit in 2001. Because their commitment to colleagues includes appreciating the wisdom of experience, they were able to ride the storm and bring the business to a better position within the year.
The very best customer service operations have excellent people cultures. We can give only as much as we receive. Just like money: if we have it, we can enjoy spending it; when we are broke, we get depressed or borrow - which costs us dear in the long run. It is the same with customer relationships: people cannot give what they do not have, and if they try to give what is not real for them, it will cost everyone dear in the long run.
Take Flight Centre. Strong working relationships encourage colleagues to build equally strong relationships with customers, who then return to them time and again for help. The end result is 23 new shops and businesses opened in 2002, giving a jump in turnover of 36 per cent, leading to a 100 per cent increase in profits.
People who feel cared for, respected and valued give high-quality customer service, building loyal and committed relationships that are more effective than the very best marketing and PR.
In this day and age, ethics in business has a high profile. People will take their custom away from organisations that do not live up to expected standards, so being known as a great workplace will help differentiate you from competitors. When faced with a choice of provider, people are more likely to go for the company that is known as a fantastic employer. Supporting an organisation that exploits colleagues is not a good option.
TD Industries are known for high trust and integrity by partners (employees), suppliers and customers. To quote Jack Lowe Jnr, the CEO:
I am convinced that high trust has allowed us to be agile and aggressive during these difficult economic times and continue to outperform our industry. TD always emerges from difficult times with a strengthened position in our marketplace.
To test his judgement on this, look at the graph on slide number 9 in the business case/evidence (Appendix 3) - it speaks volumes.