Impacts Of A Bad Internal Culture


What is culture?

“Culture” is one of those buzz words than many people use however, don’t necessarily understand. This often means that leadership teams see their internal culture as being “fluffy” and not something that they should be prioritising. The purpose of this blog is to define what culture is to me, why it is important and some of the issues that may arise should organisations not create a fit for purpose internal culture.

To me personally, culture is…

The norms, values and purpose of an organisation, which employees adhere to through their behaviour.

Due to the fact that culture isn’t tangible and often hard to measure, it has a constant battle to prove its return on investment (ROI). Creating a positive internal culture can significantly transform your business, equally a negative culture can increase costs and cause performance related issues.

Examples of good cultures?

You just have to take a look at the likes of Google and Netflix who have what you could describe as a “progressive” approach to people management e.g. offering their employees as many holidays as they wish, flexible working etc. Of course this is something that needs to be managed and monitored however, both organisations ensure that they resource the right people into their business.
Manchester based organisation GradTouch would be a much better example for smaller businesses. Similar to Google and Netflix they have taken a progressive approach and are now one of the employers of choice in the North West.

Why is it important?

• Improved individual and business wide performance
• Transparent and honest communication – open door
• Reduced attrition costs
• Increased team collaboration
• Higher employee engagement

Impacts of a negative culture?

Impact 1: Attraction, retention and engagement; costly; difficult; time consuming

This may come as a surprise however, people talk to each other! Should you have a bad internal culture, then not only will your employees become disengaged with your business but external stakeholders will too. Whether that be potential candidates whose skills you require or even in some cases your customers and prospects.

In summary a negative culture naturally makes it difficult to attract, harder to retain and will make it almost impossible for you to engage your employees.

A wise person once said “Build good relationships and engage your employees, they will then build good relationships and engage your customers”

Impact 2: Performance related issues

Many companies struggle to gain consistency in relation to employee performance. Although this doesn’t always negatively impact overall business performance, it can often restrict both employees and businesses reaching their optimum level. All of which can impact: customer satisfaction, productivity, customer retention and more.

As we sit here in 2018 there’s a higher demand that ever for employers to create a positive experience for it’s employees. If you give your workforce the right reward, environment and wellbeing support, they will consistently perform to a high level.

Impact 3: Employer of choice

As a business leader, why do you own/lead your company? What is your purpose? As an outsider, how would you like people to view your business? Profit is 100% important however, in order to create a sustainable business, it is crucial that you put your people at the centre of it.

But what really are the benefits of being an employer of choice?
• Improved brand image
• Better reputation with prospects, customers and employees
• Easier attraction and improved retention
• Increased innovation

As we sit here today, far too many companies are focused on profit over people. Although this approach can work in the short term, it will come back to bite you. For example:
• Dishonest and closed communication
• Leadership and employee distance
• Higher attrition
• Higher disengagement

Conclusion and questions to ask yourself?

I hope that this blog has provided a small insight into the importance of creating a positive internal culture and why you should be looking to become an employer of choice – of course this is only a snapshot.

Here’s a couple of questions to ask yourself…
• When was the last time you ran a culture change project?
• Do you currently measure attrition/retention?
• Do you currently measure employee engagement?
• Have you defined your internal culture?
• What is your purpose?
• What are your values?
• Have you got a formalised people strategy?
• How do you want your business to be viewed by prospects, clients and employees?

As always keen to hear everyone’s thought on the issues that may arise with a poor internal culture. At the same time happy to answer any questions/receive some feedback on my blog.
Please do get in touch to learn more about our clients and how they’re taking steps to become an employer of choice.

Harry Wright
Client Delivery Consultant
Rencai Group
[email protected]
07341 662232