In this technological age, we have come to accept 3D technology as the norm – so why are we still happy to look at our bottom line in 2D? Why do we still view it as a simple equation of revenue – expenses = profit?
Ken Blanchard describes the triple bottom line as the organisation being the provider, employer and investment of choice. We are living in a time when people have increased choice. Monopolising any market has become close to impossible. Harnessing your employees’ passion can give you the edge you need to stand out from the crowd. If you are the employer of choice, you will most likely be the provider and investment of choice.
Imagine the potential that our expenses have to multiply our revenue instead of accepting that they will subtract from it. This is exactly what culture has the power to do. If we start looking at the salaries we pay and the offices we keep as investments rather than expenses, I am convinced we would take better care of them.
The reality is that you need people to make money. If your employees are not engaged to deliver quality work in line with organisational values and goals, you will have poor products/services to sell, few people to sell to and high running costs to boot. If you don’t invest in your culture (lead factor) you will not make a sustainable profit (lag factor).
What if the salaries that you pay give you double the value in billable hours? What if the office that you rent buzzes with passion that makes clients come to you? What if the utilities that you pay enable a space of collaboration that adds value to your brand? That is the true value of culture.
But is this wishful thinking or can we make it happen? I know we can and here is how:
Let the change start with you
Ken Blanchard believes that organisational culture will change when individuals change their behaviour. But here we find the question of what came first – the chicken or the egg? Does the culture inspire engagement, discretionary effort and a dedication to keep learning and improving ourselves or do we change the culture when we bring these things to work?
I see this as a symbiotic system. Change will happen if enough people change. We must realise that the ripples will follow, feed off each other and become self-sustainable, but someone has to initiate the change. And why can’t it start with you?
Let your purpose be your guide
In this ever changing world that requires us to innovate constantly, there are few things that can help us stay the course. But if you are intentional about developing your culture in line with your purpose, it will sustain your organisation’s foundation (values), performance (measurement), conscience (disciplinary code) and ultimately your profits.
Culture is the heart of the organisation and it is sustained by a connection to a shared purpose. According to Forbes, there’s nothing like an inspirational vision to propel an organization to greatness.[i]
According to Deloitte’s Culture of Purpose 2013 Report, a sustained strong sense of purpose contributes to long-term success. Businesses with purposeful culture report that their employees are more likely to perform well and the businesses concerned experience strong financial performance. They also have a distinct brand, a clearly-defined set of values, greater customer satisfaction and better employee engagement.
Change is not optional. Kodak, Nokia, Blockbuster and Yahoo can all attest to this. But if achieving your purpose is why you want to change, your culture will provide the how and external factors will highlight the what.
Don’t spend – invest
The logic is simple. If you rent a house, having a place to live is an expense. If you buy a house, addressing that same need becomes an investment.
Statistics from New Century Financial Corporation indicate that companies with happy employees outperform their competition by 20%, earn 1.2-1.7% more than their peer firms, and are 2.1% above industry benchmarks.[ii]
When you employ someone, you need to provide means, ability and care. You have to give them the tools they need to perform, empower them with the skills and take a genuine interest in their personal well-being and development. This gives them the opportunity to develop into an asset for the culture and the company. If your employees feel that you are investing in them, they will bring their discretionary effort, be more productive and consequently add value to the bottom line.
Thus, don’t look at your bottom line like it’s flatlined. If your heart is not beating, you are dead. Your business is no different.
This article was first published in the March 2017 edition of People Dynamics, the official publication of the Institute of People Management.