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Many people in Silicon Valley knew about Uber’s “hyper-masculine, hyper-aggressive” company culture, but looked the other way because the company was minting money. And probably just as many companies questioned whether they should be copying it.
But as revelations about Uber and companies like Signet Jewelers unspool almost daily — attended by stories of lawsuits, valuation drops and high-profile firings and resignations — we’re now second-guessing ourselves, wondering if “hyper-aggressive” culture is actually the best environment for success to thrive.
As it turns out, culture plays a giant role in business success, for better or worse.
Which begs the question: How does your company’s leadership measure success? Sales? ROI? That’s pretty typical. I don’t want to pick on Uber, but its issues should have leadership everywhere asking another question: “How healthy is our culture?”
It’s an important question. It’s also a key metric. A healthier culture multiplies company growth and enhances that company’s resilience against not only crises, but against the normal ups and downs of business life.
My take: Workplace culture should have a seat at the table and should be measured, just like sales or ROI. An organization’s culture and health is just as reliable a predictor of success as sales figures.
This isn’t just me talking. Study after study shows that healthy organizations — where employees feel valued and love coming to work — typically outperform companies where employees feel replaceable and pitted against each other.
Costco is a great example: The company has a well-documented thriving workplace culture. But there’s more — it’s a growth monster. If you invested in Costco 20 years ago, you would have a 1,200 percent return on your investment by now (compared to Nasdaq companies’ 600 percent return in the same period) while investing in a public company that makes no apologies for supporting its employees.
Sure, you say — but Costco is a giant public company. My own not-so-giant, not-public company, Fond, is in growth mode, and has to hit its sales or user metrics.
The truth is, even for an organization singularly focused on growth, a strong company culture quantifiably leads to growth. More than that, it is more likely to magnify growth over the long run.
It's a leadership team’s job to allocate time and effort into the health of an organization, because that leads to growth. And it pays off, whether you have five employees or 5,000.
A word about “culture” versus morale: Culture is a series of shared attitudes, values and beliefs manifested in behavior. You can “feel” culture when you walk into an office. Culture can be bad if it’s founded on toxic beliefs, unethical attitudes and sketchy values. In that way, culture can be strong and morale can be low. Culture leads to high morale when it is intentionally shaped and bought into and lived by all employees.
Unhealthy organizations often have low morale — which contributes to high turnover and low rates of retention, and has been directly linked to a company’s ability to attract (and keep) top talent. In recent years, job seekers and workers alike are increasingly looking at workplace culture, tapping platforms like Glassdoor to help them decide whether to stay where they are — or decide where to go.
Creating a thriving, positive workplace culture doesn’t “just happen,” nor will installing a foosball table instantly fix a company. Culture has to be created and worked on all the time, just like any other metric of agile success. All the foosball tables in the world won’t help if your employees are afraid to be seen using them.
Some companies believe it’s impossible to measure the health of an organization. The good news is that there are now reliable, non-squishy ways to measure an organization’s culture. One trend we see among our customers is using eNPS scores to measure culture objectively, and working objectively to improve based on employee feedback.
Prioritizing culture and employee happiness needs to start at the top to be successful. Leadership should be the driver of company values, setting and recognizing good examples of work, and should be the first to address and fix issues when things take a wrong turn.
As Patrick Lencioni wrote in “The Five Dysfunctions of a Team: A Leadership Fable”:
“Not finance. Not strategy. Not technology. It is teamwork that remains the ultimate competitive advantage, both because it is so powerful and so rare.”
A healthy workplace culture doesn’t just benefit employees. It’s for management, too: Once you see the benefits of building a healthier organization, you’ll want to keep building your culture — for your employees, your investors and all of your stakeholders — as you realize that culture doesn’t counter growth, but acts as a multiplier.
Taro Fukuyama is co-founder and CEO of Fond (formerly AnyPerk), an employee engagement company that offers perks and rewards products used by hundreds of companies across the U.S. Fond was founded on a desire to help companies build places where employees love to work, since happier employees make for better business. Fukuyama is part of the first Japanese team to be admitted to and graduate from the Y Combinator program. Prior to co-founding AnyPerk in 2012, he studied Law at Keio University in Tokyo. Reach him @taro_f.
This article originally appeared on Recode.net.
