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You Can’t Fix Culture by Cleaning House

ByRobert Logemann, Last Modified
Jun 24, 2019
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In times of change and difficulty, leaders need to pay more attention to their workforce, not less. Employee satisfaction can have a significant impact on company's performance, especially during difficult times.

According to a 2017 study published in the Journal of Financial Economics, companies that see improvements in their employee-sourced ratings tend to significantly outperform those whose ratings decline. Employee feelings matters – and as tempting as it might be to clean house and dismiss naysayers during times of change, doing so will harm morale, undercut engagement, and halt your business's upward trajectory.

I've seen the fallout firsthand. Some 20 years ago, I served as the director of manufacturing for a firm that was undergoing a massive organizational overhaul. At the time, the company had just welcomed a new CEO to optimize its structure. The new leader was inarguably brilliant, having previously been fabulously successful as the president of one branch of a well-known conglomerate. He wanted to transplant the systems that had worked so well for him at his old company into the new, cleaning out any cobwebs that remained of the old order in the process.

His strategy? To promptly sweep out or disregard anyone who had been in the organization for over four years. It was a decisive dismissal – and one that came at a significant cost. He might have saved himself a little time and a few arguments by sending potential critics out the door, but they took an incredible amount of invaluable accumulated knowledge and experience with them. By refusing to take the time to engage with longstanding employees, the CEO lost the very assets that would have helped him rebuild the company to be stronger, better and more successful. Needless to say, the leadership change didn't go as well as the company hoped.

You can't change a company's culture with brute force – no matter how talented you are. Below, I offer a few tips on how employers can use employee goodwill and satisfaction to build the foundation for a new and positive company culture.

1. Don't push good employees to the curb.

Changing out old hands for new is almost always a mistake. Sometimes, struggling companies do need to conduct layoffs to reorganize or scale back their operations – but hollowing out a company's workforce for the sake of limiting dissent is rarely a productive move. Such layoffs typically have significant cultural side effects. Research has consistently shown that layoffs have a profoundly negative impact on office culture and productivity. They tend to foster insecurity, increase the risk of employee burnout, tank job satisfaction, erode interpersonal trust and drag down officewide morale.

As that morale diminishes, the business may even experience higher turnover, poorer job and company performance, and lesser employee engagement. In most cases, the cost to a business's culture significantly outweighs any benefit a leader might receive from cycling out employees.

If layoffs are truly necessary, leaders need to conduct them in a way that is fair, compassionate and well communicated. If remaining employees understand why a restructure is happening and what they can expect that reorganization to look like, they will be more willing to support the change and maintain their engagement in the company's work.

2. Establish a philosophy of clear communication.

When I explain my philosophy toward communication, I like to reference Jack Welch. In a 1999 interview with The Wall Street Journal, the General Electric leader pressed the value of repetition, saying that he often felt as though if he had to share an idea or corporate message one more time, he would gag. And yet, the repetition works. In my experience, communication must always be both consistent and unrelenting to be effective in the long run.

If leaders fail to maintain clear messaging, the company grapevine will inevitably fill the silence with misinformation and rumor. Employees are only engaged when they feel secure in their employment. If they don't have a sense of where they fit in the company's new direction, they may disengage – or even seek other employment.

It's a CEO's responsibility to give employees a clear sense of direction and purpose by turning a company's growth strategy into a vision that everyone can buy into. If properly framed and enthusiastically communicated, a CEO's vision can inspire the people they lead. Employees will be more motivated to help if they feel personally invested in the company's development and have a clear idea of what they need to contribute to the change initiative. To that end, it is critical that management makes a point to hear employee questions and concerns. This allows management to build a better relationship with the company's employee base, allay employee concerns in real time, and resolve potential misunderstandings before they become problematic.

3. Ask employees for input.

An employee's value extends far beyond their formal job responsibilities. Workers can play an invaluable role in optimizing a business's operations and launching a company toward greater achievement. However, engaging with those employees can be somewhat of a challenge.

In the current workplace atmosphere, the stereotype of an effective boss being dictatorial and commanding is painfully outdated. Research into the psychology behind management and workplace behaviors tells us that employees achieve the most and are at their happiest when they work within a culture that fosters mutual trust and respect. Businesses that are defined by dictatorial direction tend to have employees who are less communicative, and thus less collaborative or willing to point out problems when they arise.

The winning strategy for creating a positive and supportive culture? Conversation. Companies can only reap the benefits of an engaged employee base when there is an open, respectful line of communication between its leadership and workforce. Employees are on the front lines; they know what operational misalignments take up too much of their time and can point out frustrating communication gaps in an instant. If management takes the time to ask for employees' input and create solutions based on their responses, they will benefit in two ways. First, the company's daily operations will be optimized. Second, employees will be more willing to buy into leadership's vision because they know that their experiences matter to the company.

4. Make employee appreciation a priority.

Employees are chronically underappreciated. According to a 2017 survey from the employee engagement platform TINYpulse, only 26% of employees feel as though their employers, managers and colleagues value them at work. This is far from ideal. Jobs are – and should be – more than a paycheck for most people. Employees need to feel as though both they and their time have value to their employer; they need to feel appreciated.

These appreciation measures don't have to be extreme. While a companywide event might be exciting once in a while, employees also value smaller events that invite their input and celebrate their accomplishments, such as periodic emails from the CEO or occasional town hall meetings. During times of change, these reassuring gestures are all the more important to keep up morale and improve goodwill between a company's leadership and its employees.

Taking care of your employees might seem like a simple strategy to apply during a complex company restructure, but its potential for change is overwhelmingly positive. Support your employees; once you do, you'll see organizational returns you never expected.

Robert Logemann
Robert Logemann
See Robert Logemann's Profile
I currently serve as the CEO for the Tyden Group, a leading manufacturer of track and trace systems, and have built my career around optimizing business and management processes. My focus has centered on helping struggling companies in a variety of industries -- from medical technology to consumer goods -- find success.
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