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The High Cost of Failing to Create an Innovative Company Culture

Recognize This! – Failure to create a strong company culture costs billions.

Yesterday I discussed some of the wisdom on why anger doesn’t belong in the workplace from Robert L. Johnson, founder and president of the RLJ Companies (in the New York Times “Corner Office” column).

Mr. Johnson’s insightful comments didn’t end there. Later in the article he pointed out the importance of organization culture:

“If you really want to build something that’s going to be around for a very long time and be stable and grow, culture has to be paramount. People have to know how your culture operates and works. … It’s easier in that kind of culture to introduce new products and new technologies or new services. When the culture breaks down, it’s real hard to be innovative because you’ve got built-up barriers to interpersonal communications. …  So innovation slows down, and changes don’t happen as rapidly as they should and you get that rigidity.

“At the end of the day, people make up companies. And if the culture allows for a lot of interaction and a lot of free-flowing ideas that are not considered threats to anybody, that company will be more innovative.”

Isn’t that the point of corporate culture – to create an environment in which employees thrive and the company meets/exceeds its success goals?

Not getting this right is very costly. A UK report by the Chartered Management Institute (CMI) found “a loss of £900 per employee and a total loss of £19.3 billion” annually due to bad management practices. Ashley Ward, director at talent management organisation European Leaders, commented on this report:

 “An efficient working culture stems directly from the very top of an organisation. If a business leader actively promotes a happy work culture based on openness, transparency, good communications and gender diversity, the organisation will be far closer to the top of its game and employees will view it as a good company to work for.”

Does your culture support the success of your employees and your business?

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