Culture & engagement aren't soft, they're actually pretty hard

Employee engagement. Corporate culture. Those two terms – hot buzz terms in human resources, and business and finance journals alike – oftentimes make “serious” executives roll their eyes. Those so-called serious executives say they’re “soft” terms that are all touchy-feely and don’t really contribute to bottom line results.

These are the same guys that look at scientific research, polling and case studies, and if it doesn’t agree with their anecdotal opinions, long-held beliefs, and of course their wealth of experience, they discount it. The truth of the matter is that there are tremendous gaps – in all areas of business – between “what science knows and what business does” (I ripped that off from Daniel Pink. Check this out: http://www.ted.com/talks/dan_pink_on_motivation.html).

There’s a certain amount of arrogance that needs to be set aside – on both sides – because, as with most things, the best solution probably lies somewhere between what science knows and what the serious executive does. The truth is that even if you really do know everything, chances are you don’t remember it all, so keep an open mind – there are other smart people out there with valuable insights that won’t always agree with our long-held opinions.

In an interview with Sean Silverthorne, Harvard Business School Professor Emeritus James Heskett talks about the issue of culture and his new book, The Culture Cycle: How to Shape the Unseen Force that Transforms Performance. Heskett says that, "organization culture is not a soft concept. Its impact on profit can be measured and quantified."

I’d also contend that unless a company deals in something that no other company deals in – something unique in the marketplace – the only real sustainable competitive advantage any company can have is it’s employees. A company with a strong corporate culture that recognizes the value of employees, and encourages innovation and input gets more from those employees – engagement.

Yep, they go hand in hand. Engaged employees are the ones that go the extra mile because they want to, not because they think it’ll get them brownie points. They actually care about their companies, because their companies have demonstrated it’s a reciprocal relationship.

Here’s another unsettling fact: Up to 75% of mergers and acquisitions fail. You know what the number one reason the leaders of those companies cite as the reason for that failure? You guessed it, the lack of attention to culture.

Research is pretty clear on the bottom line return of engagement too. Companies with engaged employees show a 22% improvement in net profit. 22%! That’s huge! You know what else they get? Less turnover and absenteeism – more huge savings for the company.

Here’s the kicker though: It IS a reciprocal relationship, and employees have to do their part too. Employees who sit and wait for the culture to come to them are going to miss the boat. It’s an active relationship that requires effort from both sides.