The following is a guest post from Jim Proppe and Jason Drake, managing partners at auditing and consulting firm Plante Moran. Opinions are the authors’ own.
How much does a bad organizational culture cost? And how much does an authentic culture impact an organization’s long-term survival?
Consider these staggering “hidden” costs of a bad working environment:
- 91% of staff are willing to leave a job within the first 30 days if they don’t like the organization’s culture.
- The total cost of replacing a staff member is estimated at three to four times their salary, with about 60% attributable to “soft costs” like training and onboarding.
- Disengaged staff cost U.S. organizations an estimated $1.9 trillion in lost productivity.
Such statistics suggest that emphasizing a good organizational environment — which includes genuine efforts to cultivate staff satisfaction — is not merely a soft, “nice-to-have” quality. It’s a hard business driver. A negative workplace atmosphere ultimately contributes to the sobering reality that only 25% of new organizations last 15 years or more.
Indeed, our experience has taught us that a people-focused culture is integral to any organization’s strength and longevity. The challenge, of course, is maintaining a great culture as the organization ebbs and flows over time.
Stay true to your company values
We’ve long seen a direct correlation between a supportive workplace environment for staff, overall client satisfaction, and ongoing organizational success. The good news is that these benefits are within reach.
![Jim Proppe, managing director at auditing and consulting firm Plante Moran](/imgproxy/J7VimmNyYw5WT3zyNRPdui5iQFxOxE8u2K_4x-LZ6vA/g:ce/rs:fit:427:427/bG9jYWw6Ly8vZGl2ZWltYWdlL0ppbV9Qcm9wcGUuanBlZw==.webp)
Any organization can set into motion a chain reaction that starts with hiring, developing, and caring for the highest-quality staff. This foundational dedication to staff then sparks their desire to offer excellent client service. Your organization’s stellar reputation with clients then wins more business from high-quality clients, creating additional opportunities for your staff — and the cycle starts again.
In other words, an organization that supports its staff's well-being will, in turn, sustain its own well-being.
![Jim Drake, managing director at auditing and consulting firm Plante Moran](/imgproxy/HpbEK9Ix5o6846ETqtMDc7dlPANbX3E-MkACNCwzIe4/g:ce/rs:fit:427:427/bG9jYWw6Ly8vZGl2ZWltYWdlL0phc29uRHJha2UuanBlZw==.webp)
Although many executives theoretically support the concept, prioritizing a staff-centered culture becomes challenging amid operational changes and market disruptions. Many organizations find it difficult to maintain culture as they increase in size and scope. We’ve often heard it said that growth threatens culture, but we would argue just the opposite — growth is essential to a good culture because it creates new opportunities for staff.
So, why do so many organizations struggle through expansions and transitions?
One answer: They may lack the steadfast application of core guiding principles and values.
An organization’s values are crucial to achieving durability. Without them, leaders are susceptible to making short-term decisions contrary to long-term interests. Therefore, as organizations change and the world around them evolves, they must rely on their core principles to drive decision-making. These shouldn’t remain static; they should be reviewed and updated periodically through a deliberate and thoughtful process.
Although every organization will have its own unique core principles and values, there are some universal steps to remain true to them over time:
1. “Respond” versus “react” to challenges that come your way. When difficult situations arise, try to avoid the sparkler effect. Sparklers burn with brilliant intensity, but their glow quickly fades. Likewise, it’s tempting in difficult circumstances to react too immediately and dramatically. Instead, organizations should thoughtfully respond. That includes listening to staff, looking through a long-term lens, and building responses based on a solid foundation of principles and values.
2. Hire well and re-recruit staff. Hire people who you can trust to make the right decisions based on your stated values. Then, “re-recruit” those staff members throughout their careers. This means proactively seeking ways to ensure they’re satisfied with their jobs — from formal, staff-led performance reviews to informal weekly check-ins. Doing so results in staff who are entrenched in the organization and who kick-start the cyclical chain reaction of excellent client service, new business, and new opportunities.
3. Maintain constant communication. Leaders at all levels must invest time and resources into effective, transparent communication. Even when the news isn’t great, being candid about what’s happening — and why — goes a long way toward generating trust and confidence in the organization.
4. Encourage staff to be leaders. Make it a priority to give staff the training and experiences needed to prepare them for future leadership roles. This approach fosters a sense of ownership, accountability, and engagement within the organization. It cultivates a sense of stewardship where staff want to eventually leave the organization better than they found it.
5. Actively live the values and culture. For organizations to endure, their principles and values must be uniformly applied in every interaction across the entire organization, from top to bottom. That means their values must also be readily accessible and visible to everyone in the organization — not merely displayed on the CEO’s wall.
Positive culture, long-term prosperity
Harnessing the power of a positive workplace culture isn’t always easy. However, we’ve seen that a truly engaging atmosphere is more than a vague, intangible asset.
In truth, the costs of a poor workplace environment are too high to ignore, and the bottom-line benefits of a healthy, people-centered climate are too significant to overlook. By prioritizing staff and steadfastly following core principles, organizations can beat the odds and flourish for years to come.