Investing in culture during times of trouble

Posted by Chris Dornfeld

With the ever-increasing pace of change, organizations are not only under pressure to perform and transform, but they also face increased competition from all directions as they do it. And that doesn’t even include leadership changes, M&A activity, reorganizations or any number of typical crises that surface from time to time. Any of these pressures can result in bad behaviors and disengaged employees driving down performance, increasing turnover rates and eroding financial performance.   

Companies often struggle with culture in the best of times. Yet in times of crisis, when sustaining a positive culture should be the highest priority, it’s often passed over entirely. A notorious example: Two years ago, Uber faced a series of problems as a culture of widespread inappropriate and unethical behavior became known to the public. Immediately, the board stepped in and presented a 13-page report outlining 47 recommendations, such as changing the CEO’s responsibilities, increasing the visibility of the head of diversity, and enhancements to the audit committee. Although the company was obviously suffering from major cultural defects, the word “culture” appeared twice in the entire document. 

There is plenty of scientific and anecdotal evidence emphasizing the financial impact of culture. Many thought leaders go so far as to say it’s culture that ultimately sets apart the great companies. Gallup, for example, routinely releases study results demonstrating the powerful impact a purposeful culture can have—including a 10 percent increase in customer ratings and a 20 percent increase in sales, among a multitude of other dramatic effects. 

How should leadership go about confronting cultural challenges? How can leaders keep employees focused, motivated and engaged during times when there are many reasons for them not to be? A very large part of the answer needs to be your employee rewards and recognition programs. Valuable in good times, they become invaluable in bad. Here are six considerations for stepping them up when they’re most needed. 

1. Increase employee listening. 

It’s a natural reaction in tough times for employees to step back and slip into survival mode. One method for forestalling a skittish mindset is involving them in efforts to move the company in new directions.  

Ask for their suggestions on cost savings, increasing productivity, or other pertinent product or solution improvements. Ensure that they understand how important their input is for meeting the current challenges and reinforce their contributions with rewards and recognition. Typically, companies focus on increasing communication—pushing out constant information—when what employees want even more is to be heard and appreciated. 

2. Keep an eye on top talent.

All of your employees are valuable in their ways, and you’d like to retain all of them. But in difficult times, it will be your most talented and experienced employees who’ll have the widest options for looking elsewhere. Emphasizing appreciation is one solid way to keep their focus within your four walls. If you don’t already know their individual preferences for rewards and recognition—and you should—now is the time to discover what means the most to them. And then to discover graceful ways to provide it. 

3. Keep it real.

A sudden flurry of scattershot recognition during a rough stretch will not have the desired effect. Quite the opposite: It will more likely give the impression of panic and desperation. Instead, take the time and effort to provide employees with specific examples of why they’re valuable and why managers personally appreciate their service. This can be done either through an employee recognition platform or during in-person meetings, or preferably both.  

In other words, keep doing what you’ve always done with recognition; just do more of it. But if it can’t be done sincerely, leave it alone—it’ll cause more harm than good. 

4. Reinforce customer-facing personnel.

If your company is unsettled, sooner or later your clients or customers will pick up on it; possibly because your employees tell them. Even if they don’t know what or why, they’ll sense something is amiss and may begin to mirror employee behavior. Trust will need to be maintained at the front lines, and employees uncertain about their or the company’s future will not be well equipped to provide it. Refocus your appreciation and recognition efforts on these important employees, highlighting their daily contributions and rewarding significant efforts to retain customers. 

5. Champion the behaviors that represent your future.

There is no better indication of change than the effort to define the future and the behaviors that will represent your future culture. These types of conversations help employees orient their thinking away from the current state and direct their energy to what’s possible. Clarifying and then championing these ideal behaviors will also go a long way toward helping people feel better about the change. The more they’re celebrated, the more change will feel real. 

6. Increase investment in your employees. 

Often, problems lead to economic challenges and one of the first areas leadership looks to cut is employee recognition. Employee programs can be seen as “soft” targets, because they can be harder to defend than investments that drive growth (like marketing and sales). This viewpoint could not be more mistaken, for two reasons.  

First, it’s basically sending a message to employees that the company is in trouble and, by the way, we value you the least. Ouch. Second, it’s also fiscally irresponsible, as our data shows recognition programs positively impact both retention and financial performance. A recent case study for one of our clients showed that a well-designed recognition program produced up to a 500 percent return on investment. 

Far from cutting recognition, double down on it. 

With globalization and today’s pace of change, your company falls into one of three categories: those going through transformation, those about to go through transformation, or those that won’t be around in 10 years. It might come as a shock that most companies fall into the last category. If you’re not currently thinking about culture change and asking if your recognition programs are helping shape your company for the future, are you sure you’ll have to chance to do it later?

Topics: Culture, Employee Experience Platform, Recognition, Research, Rewards, ROI, Retain Employees, Thought Leadership