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New year, new you … new organizational culture?

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Kevin Oakes and Katheryn Brekken
Kevin Oakes is the CEO of i4cp and the author of "Culture Renovation: 18 Leadership Actions to Build an Unshakeable Company." Katheryn Brekken is a Senior Research Analyst at i4cp.

With the new year underway, many of us have already made resolutions in an effort to improve personal health . ..but what about the health of your organizational culture? Like those who have already given up on their new year’s resolutions, improving cultural health often is abandoned quickly because it’s considered too time-consuming to really change, more effort than it’s worth and the organization is suffering from ingrained habits that are just too hard to break.

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But, for the intrepid few who persist, improvements will be realized. In fact, upgrading personal health has some of the same benefits as organizational health. For one, it’s good for longevity. It’s also good for energy and productivity. However, improving a company’s culture has an added benefit: It’s an incredibly accurate indicator of better financial performance.

I wonder how many people would suddenly hit the gym if they knew it would eventually make them wealthier.

In a brand-new study released by i4cp, conducted in partnership with HR Executive, high-performance organizations (those with better revenue growth, market share, profitability and customer satisfaction) are six times more likely to have a “fit” culture than low-performance companies. Make sure you show that statistic to the culture skeptics in your company.

The study, Culture Fitness: Healthy Habits of High-Performance Organizations, shows the many benefits of a healthy culture over time. One big one: In an era where productivity is waning, the study found that cultural fitness is directly linked to productivity. In fact, regression analysis revealed that culture health explained nearly 20% of increased organizational productivity over the past two years.

Like those who believed a dry January would get them back in shape, companies often resort to unproven theories to change. For example, several have forced employees back to the office in a desperate attempt to immediately improve productivity, only to discover that wasn’t the magic potion. Instead of worrying about where someone works, they should refocus their attention on culture improvements if they truly want to be fit for the marathon ahead.

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Just as marathons are usually won by runners who are in the best condition, companies with the most in-shape cultures enjoy many advantages over others in the race. For example, fit cultures report:

  • Higher employee net promoter scores (eNPS). Companies with healthy cultures reported excellent (71-100) eNPS scores 9X more often than their unfit counterparts.
  • Higher engagement. Healthy cultures were 5X more likely to report an increase in employee engagement scores since the onset of the pandemic.
  • Better talent attraction and retention. Very fit cultures are 4X more likely to have experienced improved retention and 3X more likely to have strengthened their ability to attract top talent since 2020.
  • Better productivity. Fit cultures are 2X as likely to have experienced increased employee productivity during this same period.

See also: 3 benefits of being a more self-aware HR leader

Like a finely tuned athlete, healthy cultures develop healthy habits. When asked to select their top culture traits, the healthiest commonly cite the following:

Culture Trait of Fit Cultures Frequency Mentioned vs. “Unfit” Cultures
Employee-focused 7X
Inclusive 6X
Quality 6X
Learning 5X
Innovative 4X
Collaborative 4X

Conversely, just like you or me, unhealthy habits can be hard to break. And in unfit cultures, toxic habits tend to multiply over time. The study found nine common habits consistently cited by organizations with unfit cultures. We labeled these “The Toxic 9.” They are:

The Toxic 9: Traits of “Unfit” Cultures Frequency Mentioned vs. “Fit” Cultures
1.      Bureaucratic 16.5X
2.      Non-inclusive 14X
3.      Disrespectful 12X
4.      Chaotic 11.5X
5.      Complacent 11.5X
6.      Cut-throat 9X
7.      Hierarchical 8X
8.      Insensitive 8X
9.      Conflict-avoidant 8X

These toxic cultures all suffered from the same symptoms: disrespectful behavior, lack of trust among leaders and employees, an unsafe environment for expressing opinions or concerns, an atmosphere that tolerates bullying, pay inequity, lack of recognition and a lack of inclusiveness, among many others. Unfit cultures also have leaders who are four to five times more likely to disregard poor behavior when making decisions about advancement, compensation, succession planning, performance ratings, awards and recognition, and high-potential employee designations. Ignorance is not always bliss.

Related: It’s time to put your company culture and human connections before your budget

Like those of us who wake up after Thanksgiving weekend and are determined to take off those extra pounds, fit cultures are six times more likely to address issues as soon as they are identified.

So, it’s probably time for your organization to stop procrastinating and do the same. Take a proactive approach and get your culture in shape for the season ahead. It’s a new year …what better time to make a resolution for a fitter culture!