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Culture as a Strategic Investment

By Rob Wolff, Senior Consultant

Although the economy is, by most measures robust and healthy right now, organizations of every size continue to struggle with managing capital budgets and investment strategies. A healthy economy doesn’t always mean an abundance of available capital; therefore, businesses owners and CEO’s continue to face the challenge of deciding where the biggest impact and return is likely to come from.

A recent survey of small and midsize business owners showed that Productivity Improvement, Recruiting and Retention, and Marketing are among the top areas vying for investment. This should come as no surprise, as these are always among the top areas under consideration during any economic period. In fact, you could argue that in times of economic challenge, these areas assume an even greater level of importance as a result of their impact on sales growth and operational expenses.

So how and where does an investment in culture fit as it relates to internal investment strategy?  Often it falls to the back end of the list when in fact it should be at the front of the list.  Let’s break this down by category:

Productivity Improvement

In most organizations, teams are of course focused on achieving organizational objectives.  The sales team wants to drive higher sales and improved margins, the operational teams want to deliver great service at a lower cost, and support services want to keep things running smoothly. Too often, these teams work in silos and work from their own perspectives, leading to inefficiencies and a lack of alignment.  The sales team makes promises and commitments to a new prospect that, unintentionally, creates more work (and added expense) for the operations team.

In organizations with high performing cultures, there is a strong sense of clarity and alignment regarding how teams not only work together internally, but across the organization at large.  The result is an environment in which teams look to support one another, with greater accuracy and efficiency.  By fully aligning the entire organization to “pull the rope in the same direction”, errors and waste are reduced, and productivity rises. To use the same example, in a high performing culture, the sales and operations teams would be more closely aligned and would be sensitive to and supportive of the impact to each other’s performance and would most likely work together in advance to create a win-win proposal for that new prospect.

Recruiting and Retention

For the past year, US employment levels have been at a level that is higher than what the Bureau of Labor Statistics calls “full employment”. As a result, it’s harder than ever to both attract new, top-level talent, and to retain the quality employees that you have today.  As recently as 2016, a report by the Gallup Organization highlighted the fact that 51% of employees in the US were actively looking for or open to new job opportunities. The strong job market since then has likely pushed that figure even higher.

A strong culture leads to enhanced employee satisfaction and engagement.  When considering new employment, referrals from employees in the current organization are a top factor in drawing new candidates. An investment in your culture is an investment in your “employer brand”, and that drives who and how many people look to join your team.


With very few exceptions, the business climate in almost every industry can been described as “rapidly commoditizing”. Whatever new product or service that you develop or introduce today will be matched by competitors in a very short period of time, and typically at a much lower cost of development.  Your culture, your organizational DNA, is one of the very few things that is and will remain a distinct competitive advantage for your organization.  Your culture—how your employees work with each other, with clients, and with vendors and suppliers—is unique to your business and can’t be readily copied.

When we work with clients, part of the work that we do is to help them articulate and describe their culture very clearly. What better way to differentiate yourself from your competition than to describe in detail who you are and what that potential new client can expect from working with you.  In a world where it’s common to hear that “what makes us special is our people”, your culture is the key to that discussion. 

As a business leader, you’re tasked with driving the greatest return from the limited funding that you have available to reinvest in the business.  Culture touches nearly every portion of your business, and an investment today continues to drive returns for 10, 20, or even 30 years into the future.  Far from being a “soft” portion of your business, your culture can and should be a strategic and competitive investment in your future.

If you’d like to learn more about how your organization can benefit from becoming a high-performing culture, just click the Let’s Connect box below.  You can also learn plenty from David Friedman\’s book, Culture by Design, or by attending our annual Culture Summit.

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