85% of the employees are not engaged globally. Tony Hsieh former Zappos CEO who recently died, would say to CFOs: if your culture isn’t engaging and empowering your team, you’re losing money.
Amid his achievements as an entrepreneur, his most significant one was to humanize the workplace, focusing on “Delivering Happiness” – The name of his book – to increase company ROI. While in my recent article, I mentioned five of his more essential leadership lessons, today, I would like to highlight his passion as a company culture master. His recipe for building a brand for the long term was culture, plain and simple.
Team members choose to be part of a company based on the purpose, brand and culture. Compared with all other workers, disengaged employees report more days of work missed (3.5 more days per person per year) and more days of work missed for illness (0.55 days per person). The lower productivity of actively disengaged workers penalizes U.S. economic performance by about $300 billion.
The ROI of investing in company culture
Tony would always highlight that their employee’s number one priority at Zappos was culture. A company survey for example would ask employees if they agree that the company had a higher purpose beyond just profits. One of Tony’s famous quotes is, “Just because you can’t measure the ROI of something doesn’t mean you shouldn’t do it. What’s the ROI of hugging your mom?” Still, investing in company culture has proved to be extremely profitable.
As per a Gallup research 33% of global employees strongly agree with the statement, “The mission and purpose of my organization make me feel my job is important.” By moving that ratio to 80%, business units have realized a 51% reduction in absenteeism, a 64% drop in safety incidents and a 29% improvement in quality.
When companies think in terms of scarcity, there aren’t enough managerial positions for everyone, rankings where only the high potentials win, there is not enough time or money for all the ideas. So employees learn to keep the status quo and avoid exposing what can be improved due to fear. They lose the spark to innovate. When this is the case, employees become disengaged because they cannot change what’s wrong.
The impact of remote work and connectivity
Most companies have been over-focusing on customer experience as a profit driver. But now, during the Covid-19 crisis, organizations are discovering that employees have become workplace customers, and the new priority should be to improve the employee experience. In the past, companies would spend money on advertising to tell people about their brand. Nowadays, an unhappy employee can talk about a bad experience on Glassdoor, or a customer can spread a complaint to millions in only seconds through a YouTube video. And working remotely, in particular, has made it even more apparent when the employee experience fails to be considered and employee engagement gets to impact company outcomes.
Companies are more exposed as the brand is embedded in every moment of truth with a potential customer, online or face-to-face. And employees are the ones that have the power to drive this perception the right way.
Get the culture right and the money will follow
In his book Delivering Happiness, Tony wrote, “Once you have a culture, invest in it. The return you get from passionate people vouching for your company and culture, and the word of mouth that generates, is going to be intangible at the beginning. But over time, as it did for Zappos, that investment will pay off manifold”. For him, customer service wasn’t just a department, but the entire company.
He would say that “if you get the culture right, most of the other stuff, like great customer service, or passionate employees and customers, will happen naturally on its own.” He affirmed that most companies don’t focus as much on company culture because the ROI is usually 2-3 years down the line. Thinking long term, companies can get the culture to drive customer service, engaged employees and a great brand.
Purpose, brand and culture are essential to boost the employee experience. That is why many companies are now, thanks to Tony’s legacy, re-directing their efforts to use their culture as a branding strategy. He will be missed greatly.
