2.138 Culture Isn’t an HR Problem — It’s a Growth Strategy

Culture is not a side project for HR. It is a core growth lever that shapes performance, customer experience and profit. In this episode Karen shares a practical way to treat culture like any other business strategy so you can unlock growth through your people. 

In this episode you will learn 

• Why culture belongs on your leadership agenda, not just in HR 
• How the Find Grow Keep framework turns values into daily habits and results 
• Simple diagnostic questions to spot culture gaps fast 
• Manager rituals that lift engagement and execution 
• What to measure, from leading indicators to lagging outcomes 
• First steps you can take this week to build momentum 

Make sure to subscribe to stay updated with new releases every second Monday!
 
Visit amplifyhr.com.au for more insights and resources.  

Also Mentioned in This Episode: 

Gallup — State of the Global Workplace report hub
https://www.gallup.com/workplace/349484/state-of-the-global-workplace.aspx  

McKinsey — Organisational Health Index research overview
https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/organizational-health-a-fast-track-to-performance-improvement 

Alex Edmans — The Link Between Job Satisfaction and Firm Value
SSRN working paper page with published details
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=985735 

MIT Sloan — Culture 500 project
https://sloanreview.mit.edu/culture500/ 

PwC Strategy and — Global Culture Survey hub
https://www.strategyand.pwc.com/gx/en/insights/global-culture-survey.html 

Deloitte — Global Human Capital Trends 2024 hub
https://www2.deloitte.com/us/en/insights/focus/human-capital-trends.html

Get our free eBook packed with practical strategies to attract, engage, and retain top talent. Perfect for business owners and leaders focused on building a thriving team. Download it at amplifyhr.com.au/downloadable/find-grow-keep

Transcript

Welcome to Episode 138. And if you've ever looked at your numbers and thought, you know what our business needs more sales.
 And so then you hire into your sales team, you increase your marketing, you push your existing sales teams harder, but you're still plateauing or you feel stuck, you know, maybe the thing that's going to give you that growth isn't your marketing and sales processes, but it's your.
 Or culture the workplace culture is sometimes treated like an HR job, even though most people that I speak to will say it is really important.
 The issue that I find is that people will say it's important, but they're not intentional about it. They just assume that great workplace culture will magically happen and in my experience, too many people say that they have a great culture. But when I ask them, well, how do you know they can't evidence it?
 They haven't actually asked their people. They don't know their employee turnover numbers. They have no idea of the current sentiment of their people, perhaps beyond just their direct reports.
 Because culture is a choice that you'd need to make as a business as to whether it is one of your strategic levers. Because when you make it strategic, your business will get faster, smarter and more resilient.
 So this means you've got to be really intentional and always watchful of your culture. So here's what I'm going to cover today is why? Why do we need to be intentional and watchful of our culture? Second, what is culture in a practical term? And then some mechanics that link culture to revenue and profit?
 Talk through a simple framework you can use, perhaps not surprisingly, called Find Grow Keep, and I'll talk through a 90 day plan that you can use to start today to really leverage your culture to grow your business.
 So starting with why, why do we need to be intentional about culture? You know, when people hear culture, some people think of perks. Some people think of words on a wall. You know, one business owner said to me, I thought that if I just, you know, treated people well and I paid them well, then they would stay. Why are they leaving?
 And I want you to think of culture as the way that your business repeatedly gets work done. You know, we often say it's it's just the way things get done around here. You know, it's shared habits and decisions that show up every day.
 But especially when you are under pressure, you know and that particular business owner, although they may have been treating people well, not everyone in the business was especially under pressure. So culture touches every.
 Customer interaction. Every project, every sale, every handover, and there's plenty of evidence that strong cultures outperform, you know, large global studies show that engaged teams deliver higher customer ratings, around 18% higher productivity and 23% higher profitability.
 And that's from Gallup's long running research across 10s of thousands of teams. There's also a link to long term financial results. McKinsey’s organisational health work finds that the healthiest companies deliver roughly three times the long term results of unhealthy ones.
 And we look at finance research. Alex Edmonds analysed best companies to work for lists across decades and found that firms with high employee satisfaction earn 2 to 4% a year in abnormal stock returns over long periods.
 So what we can take from this is that when you're intentional about how your people work together, you will get Better Business results and notice, I said intentional culture cannot be accidental. It's the worst way to let culture happen.
 It is shaped by what leaders choose to measure, reward and model. So This is why culture has to be part of your growth plan. It's got to be one of your strategies and not just an assumption.
 So you know, culture, as I said, it's described as you know how we do things around here. But it is made visible the 1st way that's made visible is the stories that people tell what gets praised, what gets blamed, what gets hidden.
 The second is the systems you run. You're hiring. You're onboarding your goal, setting your feedback, your rewards, and the third is the symbols you show who gets promoted, what behaviours are tolerated, how are decisions made.
 I ran a leadership workshop recently at a new client. I've never been to their office before, and the moment I walked in the door, someone was over to me, not the receptionist, just someone walking by and said are you OK? Can I help you? Can I get you a tea or coffee?
 And someone else was walking by to go to the bathroom. They asked me the exact same thing. I went into the boardroom. I started setting up. Someone actually came by and stuck his head in the boardroom and said to me, are you OK? Can I get you a tea or coffee? I had to have a chat with him. It turned out he was one of the senior APAC managers.
 For the business, so also wasn't his role to do that. But that is a signal of their culture that is a very strong symbol that they care about each other. They care about their visitors and their clients. You know, they're probably really, really good at collaborating.
 So yeah, ask yourself that you know, what are the things that I'm hearing in terms of the stories people are telling? How are our systems and what are the symbols that we're showing?
 You know, independent data sets can really help us see the reality behind the words. So MIT has something called Culture 500, which uses employee reviews at scale to show which values people actually experience. So it's a massive data set of 1.4 million employee reviews from Glassoor that lets you benchmark cultural values, and then it links them to business outcomes. So this is one way that explains how culture isn't just words in your marketing your website, but it's actually the words your employees use about the behaviours they experience. So the how.
 Do things around here.
 So let's use five mechanics to join the dots to revenue and profit. The 1st is speed and execution, so a clear trusted culture reduces friction. You know, we talk about friction a lot in customer experience. It's no different with employee experience.
 When people know the expectations, decisions happen faster, projects move, you know, speed really shows up. We get faster times, to quote, we get shorter onboarding for new hires. We have less rework to do.
 And Deloitte's human capital trends report calls this human performance where you design work around people and how they create energy and capability to get together. Growth gets easier.
 #2 customer experience. So your culture sets the tone for how people treat customers. If teams feel safe to escalate issues, fix root causes, customers will feel that difference. And of course it shows up in retention referrals and also your power to price because suddenly you can have.
 Higher prices than your competitor because your service is so much better, you know, think about whenever you've had something that's cheap but you're like, oh, I just hate getting that product or I hate dealing with those people. You get to the point that you are willing to pay more.
 So, you know, think about those Gallup numbers that I've mentioned before. Better engagement tends to link with better customer ratings. #3 is innovation. So you know, it is all about processes. You know, a culture that rewards learning, they share wins and mistakes and value.
 Are more likely to try small things. They're more likely to say OK, let's you put all those ideas on the wall and let's see what sticks. And that culture 500 data I mentioned before shows that employees notice and talk about values like innovation and agility inside companies.
 That are moving fast.
 #4 is talent. So strong culture attracts stronger candidates, which means of course we have cheaper and faster hiring. They reduce early turnover, which saves you a lot of money. So if you've ever spent time replacing a key person, then you know.
 The cost, there's a PwC Global Culture survey that shows this from a slightly different angle, and it says that leaders that report that culture is a real source of competitive advantage, especially in disruption.
 #5 manager leverage. So managers, some would say everything when it comes to culture, and you know, Gallup's research shows that manager quality explains a large share of swing in team engagement.
 So equip manage with simple rhythms. You know weekly one on ones clear goals, clear performance expectations. Because when managers are unclear or unsupported, their performance will drift. So when we line these things up.
 You know, culture stops being intangible. It is a system and it's a system that can move our numbers.
 So getting into our Find Grow Keep framework so at Amplify HR we organise culture into those practical pillars. So think of it like a people system for business growth. So Find is how we attract and choose people who are a match for our values and for the role.
 Of course, if we don't have values, we have to work that out first. As part of this pillar, you know it includes role clarity, structured interviews, you know, realistic job previews. It also includes just really clear onboarding processes. So our new hires can get productive quickly.
 Grow is how we build capability, it's goal setting. It's regular feedback, coaching, simple development plans. It's making sure that our managers have the tools to turn their strategy into what has to happen on a week to week basis.
 So if you remember that manager point, you know when managers have simple rhythms, the engagement and performance lift that Gallup describes is more likely to show up in your numbers.
 Heap is how you create an environment where people want to stay and they want to do their best work. So it covers recognition well, being fair pay and also how you handle conflict. You know it's also looking at well being and you know I spoke about this in an earlier episode. Well being is not a perk. You know, Oxford and Harvard associated research like stronger well being with better.
 Data retention and production, so you know all of that just shows up in results. It also includes listening mechanisms like Pulse surveys, skip level chats, so leaders can get early signals if something's not quite right. So each of the fine grade key pillars is backed by simple processes, simple cadences.
 You know, it's not complicated, but the key to everything when it comes to culture is it has to be consistent.
 So to give you an example, you know, I'll share a short story about a client and professional services with about 40 people growth installed and the issue was just that friction that I was talking about in the business. You know projects were starting late, handovers were messy, new hires were taking too long to get up to speed.
 So you know, we apply the fine grow, keep methodology over 12 weeks. So in fine we looked at the things like the critical behaviours that are needed for success and then how do we put that into the job descriptions and the interviews you know, how do we clean up the onboarding so that we have just really simple processes.
 Yeah, in grow, how do we get the managers to be really comfortable and confident with useful weekly one on ones you know just a three question agenda, what's going well? What support will you need from me? You're setting quarterly goals that link to the company priorities and making that visible.
 In keep looking at recognition programmes, how do we train managers to give specific behaviour based feedback so you know we do this process over three months and then after 12 months we then measure success through predefined metrics. So we look at things like employee turnover, absenteeism, engagement scores.
 And in this case, in addition to that, the management team reported fewer issues, more agility, more ability to get products to market and none of that's a change the marketing or sales processes. But it's a change in the way the work happens.
 That changes when you start to actually be intentional and consistent with your culture processes.
 So although 99% of leaders will tell you they understand culture, in my experience about 90% of them, don't you know, once you dig a little bit deeper, you start to get objections. So I'll give you the top four. First one, it's culture soft. You know I need hard results.
 And culture is not soft. It's actually the hardest part of your business to change is the hardest part of your business to copy from your competitors. You know your competitors can buy the same software as you. They can be in the same office as you.
 They cannot buy the way your people think and act together.
 And that market evidence that I've mentioned before from Alex Edmans shows that a better employee experience tends to compound in financial terms overtime.
 Number two, we don't have the time. You know, we're already spending too much time on on people and culture in this business.
 I would argue that's because you're doing it reactively, so you know you've got HR issues. You're constantly having to work out all this rework, you've got misunderstandings. Maybe you're doing firefighting, you're investing that time differently in those clear rhythms, for example, will save you time every week.
 Yeah, going back that Deloitte research, the design of work either gives you energy back or it trains it. So if we choose design and be intentional with our culture, we're going to get more time back.
 The third, we're too small for this, for any small business.
 The smaller you are, the more everyone matters. It really hurts when you're a small business and someone leaves or someone's on extended leave. You know, getting your culture right now means that it'll scale with you, get it wrong, or don't be intentional now and you are scaling the problems.
 So you know the basic practises that we look at in our find go, keep methodology do not require big teams, they do not need big budgets. They do need clarity and consistently.
 #4, this is HR's job, so HR supports and designs leaders own the behaviour.
 If the leadership team doesn't model the culture, it does not matter what your HR person does. It doesn't matter how good they are. Doesn't matter what programme they design. If the leaders are not doing the right things.
 Your culture honestly has no hope. Culture is a leadership system that HR will help you to execute.
 So are you going to treat culture as a growth strategy? If you are, you probably need a short list of of signals, so keep it simple and you want to look at leading and lagging indicators, so leading things like onboarding success.
 How many new hires have completed a structured onboarding plan and hit the key performance indicators that you gave them by day 30 and day 60?
 Manager rhythm. What is the percentage of managers that are running one on once? What's your learning cadence? What's the percentage of teams that are actually reviewing the lessons learned at the end of the projects that they're doing?
 What's your employee sentiment? Do you have short monthly pulse checks on clarity, workload recognition? Do you have a nice big yearly engagement satisfaction survey so you can really understand and get into what's going on in the business?
 Lagging indicators time to productivity for new hires. How long is it taking? Is it getting better? Is it getting worse? What's our customer retention? What's the referral rate? How many people are being referred from our customers?
 What's our cycle type? From quote to invoice for our main services? What's the voluntary turnover of our strong performers?
 Yeah, just pick three or four and review the monthly with your leadership team because the power is in the conversation and the action, not even having a nice dashboard. If you want an external sense check, you can use that culture 500 style thinking.
 So ask whether the values you want, such as innovation, execution, are actually being experienced and talked about by your people.
 So over the next 90 days, here is a step by step plan that you can run in your business even if you're starting from scratch. So weeks one and two, you want to align your leadership team, define the three behaviours that matter the most this year. So for example, we keep our promises, we speak up early.
 You know, secondly, we want to agree on the three commercial outcomes that matter the most. So we want to reduce the project cycle time. We want to improve customer retention.
 And then share examples of what good looks like and what it doesn't look like, which is just as important. So this helps to make it concrete weeks three to four. We're mapping our current system. So what's our people journey on one page? How do we attract people in how do we interview offer on board goal setting feedback recognition, growth, exit.
 The whole thing circle the moments that matter where small changes could remove some friction.
 And choose the top three. What are the top three? They're going to support those commercial outcomes?
 Weeks 5 to 8. We're building simple rhythms, so we're launching those one on ones for managers. We're introducing quarterly goal setting. We're starting to have a recognition programme or ritual at our team meetings.
 Weeks 5 to 10, I want you to fix one hiring or onboarding gap. Everybody has them. Update your interview questions. You know, create your onboarding plan schedule check ins with your new starters weeks 11-12
 You're going to be listening, and then you're going to be reviewing, so run a short pulse check so you could do that listening, you know, review your lead and lag indicators and then choose. One thing is to stop one thing to start one thing to continue.
 Yeah.
 And of course, you want to make sure you're announcing the changes and why you're doing them. And if you run this with intent, things will start to feel smoother inside the business. You're going to start to see movements in customer experience. You're going to start to see less people wanting to walk out the door or actually walking out the door.
 And this creates the growth in your business?
 So if you take what I do from today, then it's this culture is not an HR task to tick off. It is a system that makes your strategy real when you decide how people work together, you will unlock the growth in your business.
 And if you want help to apply the Finder and keep methodology in your business, our team at Amplify HR will of course love to partner with you. We work with small to medium sized businesses as an on demand HR partner through a fractional HR model and also through implementing that 12 week Accelerate programme.
 So you can book a free discovery call and we can map your first three actions together. The link is in the show notes and if you've received value for this episode, I'd love it if you could leave a rating or a review over at Apple podcast or Spotify so someone else can also find the episodes to help with their business episodes released on Mondays. So click subscribe and you'll be notified of when that's available. Thanks so much for joining me if you have any feedback, questions or ideas for future episodes, head on over to amplifyhr.com.au or connect with me on LinkedIn and we can start a conversation.