- General Interest - Business
Why Corporate Culture Matters
September 01, 2021
The Great Resignation (a term first coined in 2019 by Anthony Klotz, an A & M University management professor) has been wreaking havoc with Canadian employers and feeding into a challenging period for employee recruitment and retention. COVID-19 and working remotely have added to the Great Resignation with many people re-evaluating what they want in their lives. And as employees consider their options, organizational corporate culture is a factor that is bound to influence their decision-making. For companies, shifting to hybrid work environments or full virtual environments, focusing on how to keep teams connected to corporate cultures and values will be key.
In our latest episode of Innovative Accountant (WealthCo’s monthly podcast), Chief Operations Officer Sophie Blais discusses WealthCo’s corporate culture and some of the strategies we use in building an entrepreneurial team dedicated to delivering a superior customer service experience.
Corporate culture really does matter. Consider the following:
- Robert Half reports that 40% of Canadians would pass on a job if the corporate culture of the organization wasn’t a fit for them
- Having staff who are highly engaged can lead to an over 200% increase in performance
- Forbes reports that companies with strong corporate cultures experience four times more revenue growth
The business case for having a strong corporate culture is solid. And as such, it is a factor that we pay attention to in our investment decision-making process. Here are some of the key corporate culture hallmarks we look for when considering our investment partners.
It’s not just that the direct costs of employee turnover are high (and they are high – depending on the role, this cost can vary between 20% to 213% of their annual salary). Once you factor in the indirect costs (including loss in productivity, disengagement, and lost institutional knowledge), it becomes apparent that high turnover can have a significant impact on the bottom line.
While low turnover is also a benchmark of a healthy corporate culture we may need to accept that attrition may be higher in the short term. Employees are an appreciating asset, and those organizations that have figured out how to keep their teams happy and contributing for the long term, will reap the financial rewards of their longevity.
A Culture of Meritocracy
Meritocracy in the workplace is when an organization takes a merit-based approach, as opposed to a hierarchal-based approach, to considering opinions and ideas. Wired defines the workplace meritocracy as follows:
“In a meritocracy, everyone has the right to express their opinions and are encouraged to share them openly and often. Those opinions are listened to, and decisions are then made based on those that are deemed best.”
The benefits of a meritocractic workplace include:
- A culture of free-flowing thoughts and ideas
- An empowered and engaged workforce
- A collaborative environment
- Heightened innovation
Individual and Corporate Accountability
At WealthCo, we specifically seek to hire intrapreneurs. An intrapreneur is an individual who takes full ownership of their role within the organization, is fully accountable for results in their area of responsibility, and approaches the role as if it was their own business. This heightened sense of accountability within our teams has had huge impact.
There is a very good reason why parents have such a heavy focus on teaching accountability to their children. Establishing clear expectations and those oh-so-important boundaries, instituting consequences where needed, these are all elements of teaching young (and not so young) ones about accountability. Having a clear sense of accountability is critical, in life, and especially in the workplace.
Clearly defined expectations eliminate any guesswork which heightens efficiency and makes for happier team members which in turn boosts productivity. By taking the opportunity to educate when expectations are not met, and be forthcoming with recognition when expectations are well met, this all feeds into a culture of accountability, one in which organizations can truly thrive and grow.
Strong corporate cultures foster healthy companies. And healthy companies are better positioned to recruit and retrain exceptional teams. Exceptional teams deliver superior client experiences which, in turn, leads to growth.
What is in the WealthCo Corporate Culture Toolkit?
At WealthCo, we take a very strategic and comprehensive approach to ensuring an optimal cultural fit within our team. And thanks to this approach, we’re thrilled to have built a very high-performing, entrepreneurial, and cohesive team. Here are a few of the key tools in our organizational cultural toolkit.
Kolbe has been a fantastic tool for WealthCo as far as ensuring a suitable fit for new hires. While employee turnover is expensive, the cost of a wrong hire, someone who is not quite right for the role or not aligned with an organization’s corporate values, is enormous - approximately seven times the cost of their annual salary. Kolbe feeds into step one in our talent lifecycle process: talent acquisition.
Kolbe is a personality assessment that specifically measures instincts and how people take action. As part of WealthCo’s interview process, candidates are asked to take a Kolbe assessment. This gives us insights into whether the candidate is well-aligned for the role they are interviewing for. Doing so enables us to avoid some of those dreaded and costly wrong hires.
PRINT is another personality assessment that has been a gamechanger for WealthCo. PRINT gives insights into one’s core motivations. Where Kolbe tells us how people take action, PRINT tells us why they do so. Together these two assessments give tremendously rich insights into how an employee performs best and how to best work with them and motivate them.
Success Enhancer Coaching Program
We’ve tried annual reviews. We’ve tried bi-annual reviews. Until we adopted the Success Enhancer Coaching Program (SEC), we hadn’t really discovered the optimal performance management strategy. But now we have it.
The SEC is step four in our talent lifecycle process. The program provides for ongoing feedback between a leader and team members. Elements of SEC include:
- Weekly one-on-ones between managers and their direct reports where feedback can be shared and those (sometimes necessary) tough conversations can take place;
- Establishing “Rocks”, a process in which team members engage in individual goal-setting to align with their division and the broader organization on a quarterly basis; and
- A quarterly review which provides opportunity for a deeper dive on progress on a team member’s individual Rocks as well as general performance.