The ROI of company culture

I recently published a blog post on the importance of culture as a competitive advantage in today’s business world. In May, we flew close to 1000 employees to Madrid. Why? To strengthen our sense of purpose, boost the professionalism, knowledge and team spirit of our people, strengthen the identity of our division and make us better together. To invest in our culture.

We call it an investment, but ROI (return on investment) is more complicated when investing in culture than anything else. For many, culture is something that cannot be seen or measured; instead, it’s something that can only be experienced. So here are some of my thoughts.

The impact on customer experience

I had my first ever trip with a low-cost, much-disputed airline a few weeks ago. My flight was delayed, and when I finally got on board, the plane was freezing. I had little space, no room to store my things, and the seat had no cushioning, so my back started aching after the first 20 minutes. No one greeted me, and no one smiled when offering food and drinks. In fact, they were arguing amongst themselves while pushing the trolley. It made me sad, knowing that these employees most probably don’t have the same rights or working conditions that many of us take for granted. No wonder it is visible in their behaviour.

While I reflected on my experience, I remembered a case study I did during my education. The case study was about the culture and results of Southwest Airlines in the US, an airline well known for their unique culture and healthy results. Their formula for success is a strong, continuous focus on values and culture, linked to their vision “To become the world’s most loved, most flown, and most profitable airline.” Employees define themselves by using the three values of having “a warrior spirit, a servant’s heart and a fun-loving attitude”.

All new hires in the airline are evaluated against these values. The company culture is so embedded with these values that after the hire, all employees are instilled with them. Southwest Airlines has an elaborate employee recognition programme, invests heavily in employee engagement and provide platforms for employees and management to meet, socialise and celebrate. The company receives 43,000 recommendations a year, from both inside and outside the company. “Basically there is no need to monitor the currency of our values, as they are what makes Southwest tick,” says Ginger Hardage, the airline’s CCO.

Humans are very sensitive to the behaviour of other humans. We are energised by and seek out behaviour that affects us positively. The employees at Southwest Airlines create a sense of pleasure that significantly affects the value for their customers. The customers feel seen, appreciated, safe and content. This experience leads them to come back for more, and also increases the willingness to pay more for the product, although Southwest is also considered a low-cost company.

INVESTING IN CULTURE: Ellen Marie and CIO Finn Uldum on stage in Madrid, where they flew close to 1000 employees in May.

Strong culture helps attract top talent

If you care about your employees, the chances are that your employees will care about your customers. Extra care given to your customers can favour your business reputation, help attract new customers and ultimately impact your revenue. A strong company culture with actively engaged employees creates a reputation that strengthens your brand in a challenging recruitment market; happy employees will advocate for your brand.

Only your culture can attract the world-class talent you need in order to be successful in the future. Top talent doesn’t have to settle for mediocre company culture, and this is increasingly important as the working population decreases in many parts of the world.

If you care about your employees, the chances are that your employees will care about your customers.

Company culture can be measured directly by identifying specific qualities that determine your company culture and assigning metrics to them. Are you seeking out an innovative culture? Then create a vision where this is visible and align your values. Hire changemakers. Create enablers/incentives and define your metrics. Metrics directly linked to behaviour are the most powerful to achieve the desired culture.

HAPPY EMPLOYEES: The employees at Visma Custom Solutions enjoyed three days of learning, knowledge sharing and social activities in Madrid.

Employee satisfaction decreases turnover

There are other metrics naturally linked to culture. In 2012, Gallup researchers studied 49,928 work units, including nearly 1.4 million employees to quantify the effects of engaged employees and strong culture. Work units in the top quartile in employee engagement outperformed bottom-quartile units by 10% on customer ratings, 22% in profitability, and 21% in productivity. Work units in the top quartile also saw significantly lower turnover (65% in high-turnover organisations, 25% in low-turnover organisations) and absenteeism (37%), and fewer quality defects (41%).

Engaged workers believe in their organisation and are trying to make a difference. This is why they’re usually the most productive workers.

Just imagine the benefits of having a mission that gives purpose and direction to the work your employees do each day, giving them the drive to do what needs to be done to succeed in the long run. Consider the value of every employee being able to make decisions at the level where the best information is available, without ignoring or passing along problems. Imagine the productivity of innovation and change happening where the value is created, every day. A healthy combination of vision, culture and clarity can make this happen.

Take a sneak peek of our conference in Madrid:

Why Visma Custom Solutions are better together

When we were going to Madrid, we created a campaign with the tagline “Better together”, emphasising the value our employees create, shaping the future and impacting society by developing IT-solutions that lead to “Better environment,  Better possibilities, Better health, Better lives and a Better future”. The “Better Together” message is powerful and creates a great sense of pride for everyone in our company.

For me, the behaviour of all my colleagues and the unforgettable moments at the Madrid conference generated a great feeling of pride and unity. Seeing tears well up in people’s eyes when our Division Director Carsten Boje Møller entered the stage and wished us all welcome. Launching the “Better Together” movie. The volume and laughter in the breaks accompanied by bursts of joy from colleagues seeing one another after a long time apart. The strength of the applause and the energy of the audience. The nervousness, pride and sense of achievement from all our employees on stage who shared their experiences. The overwhelming reception and comments. Seeing everyone all dressed up and excited about the grand gala. Oh, and the fact that everyone enjoyed each other’s company until late and, despite this, waking up to a full auditorium in the morning.

I hope that this feeling is present with everyone who took part in the experience and that they brought it back home with them. Boosting our sense of unity and purpose, impacting our product and customer experience, and strengthening our employer brand. All our products are affected by employee culture and engagement. In much of our business, we sell hours. Our pipeline of people is our most important asset, making culture equally important. We were “Better Together” in Madrid, and our challenge now is to become “Even Better Together” in the future.

Want to join us in developing IT-solutions that matter? You can find open positions here.

Ellen Marie Nyhus is HR Director in Visma Consulting. She has 13 years of HR experience, of which the last six years from several companies in the Visma Group. She has a broad HR competence, and devotes much of her time to training senior executives, middle managers and HR staff.
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