A 2022 Gallup poll found that a whopping 68 percent of U.S. workers are “disengaged at work.” Disengagement was identified in highest concentration among millennials and Gen Zers, who incidentally constitute the largest percentage of the U.S. workforce. This means that a majority of American workers aren’t working to their highest potential; lack motivation, interest, and inspiration in their jobs; are prone to distraction; and/or can harbor negative or indifferent attitudes towards their organizations. A sampling of headlines from the last quarter of 2023 were:
- “Job unhappiness is at a staggering all-time high” CNBC
- “Employee happiness falls to three-year low” The Hill
- “Why is everyone so unhappy at work right now?” The Wall Street Journal
- “Americans are ‘unhappier at work’ than they’ve been in years” Fox News
This is bad, and costly, news for organizations. One study on employee engagement found that organizations in the U.S. lose between $450 to $550 billion yearly because of employee disengagement. And it’s nothing new. Low employee engagement has been the trend for decades. As unfortunate as that is for organizations, how big of a deal is it really? It’s an employer’s market right now, right?
Well, it still costs an organization around 20 percent of an employee’s salary to replace someone who has left. (Not to mention the impact it has on the rest of the team to absorb the work and the time it takes to get a new employee up to speed.) U.S. employers spend $2.9 M per day looking for replacement workers. This can be a huge hit when you consider that nearly three-quarters of employees could take or leave their job. Even more worrisome, unhappy workers often have a ripple effect that impacts the rest of the organization, causing the problem to grow.
So how do you engage your employees?
It starts with organizational culture. It feels like every other article from business schools or workplace experts is emphasizing the importance of corporate culture and the role leaders play in it. There’s a reason for that. Scholars and analysts have been sounding the alarm on organizational culture for a while now, but data shows leaders are having very little lasting impact.
For employees to be engaged and happy at work, they need a culture and environment where they are seen, heard, valued, and one that lets them safely bring their full, authentic, best self to an organization. This is the type of culture that breeds innovation, growth, creativity, collaboration, motivation, and the highest-performing teams. Why? Because this kind of culture is built on equity and the foundational understanding that organizations navigate a multitude of cultural differences across race, gender, national culture, generation, and other dimensions that heavily influence how employees show up every day.
Cultural competence and understanding are key to communication, collaboration, teamwork, productivity, and navigating conflict. Individuals with solid grounding in cultural competency and organizations that have equitable policies and practices are the foundation for a healthy and thriving company culture. But I am getting a little ahead of myself.
What does organizational culture even mean?
Think of organizational culture as the collected values, expectations, norms, behaviors, policies, and practices of the organization’s members. It’s the way people are treated, rewarded or reprimanded, and the daily interactions they experience in their jobs. It starts with the presence and messaging from top leadership, but is an amalgamation of many different factors: the products and services produced, marketing and messaging communicated, recruiting and how the organization is positioned, onboarding and the expectations employees have.
What is at stake?
Organizational culture is the most impactful element of employee engagement and job satisfaction, and it’s often an afterthought. A meta-analysis of all organizational audits The Winters Group has conducted over the last three years found that for every 1 percent increase in employee perceptions of equity and justice, employee job satisfaction rose by 20 to 30 percent. I want to pause a minute to let that resonate, because it is powerful. There is a significant, measurable correlation between the health and vibrancy of organizational culture and the engagement and satisfaction of employees.
Where should you start?
Culture change and people management can be daunting because it is essentially a “soft” discipline. These are people’s opinions and feelings, which are inherently subjective; it’s not like you are measuring widgets. There is both an art and science to the process.
To effectively build a thriving culture where everyone is seen, heard, and valued in a way that is transformational, sustainable, and measurable, you need to understand where you’re starting from. What is the current culture of your organization and how does it impact your team? This requires gathering data — both quantitative and qualitative.
Though it is an additional cost, best practice dictates that you engage an outside organization to gather this information for you. It is an additional expense, but you’ve heard the expression, “garbage in, garbage out” when it comes to data, right? If an internal team is gathering the data, often employees don’t feel free to be open and share their honest feedback. No matter how “anonymous” an organization promises it is, very few people want to risk sharing potentially negative feedback if it could impact their career — regardless of how disengaged they are. To create an effective roadmap forward, you need a clear picture of where you are starting.
The outside partner can review any data you already have, for instance: demographic data, HR data, salary information, surveys, etc. Then they can gather additional information from focus groups and interviews to put together a comprehensive picture of where things stand.
From there, assemble a cross-functional team that includes senior leadership and any other stakeholders that are responsible and accountable for cultural initiatives. This team should be diverse and represent voices that are often overlooked or marginalized. This team needs to come to alignment on how to embed an equitable cultural strategy into the overall mission, vision, goals, and objectives of the organization. The strategy created must live at the same level and become integrated with the same KPIs that govern financial and operational success. When you have completed your strategy, you should have clear metrics that will measure the effectiveness and impact of your culture change efforts.
Change management
Once you have your strategy developed, that’s when the changes (and potential wider conflicts) begin. Change can bring up fears, apprehension, and resistance. How is it going to impact the organization? How will it impact my place within it? Am I going to fit within the new direction of the company and am I qualified and prepared for the new expectations?
Early in my career, my then company brought in a facilitator for a team-building workshop. I don’t remember the facilitator or the purpose behind the event, but I remember vividly one of the exercises we did. The facilitator had torn off a number of those large flip chart pages and taped them up strategically in different areas of the room. Each page had a different picture on it. One had an ice cream cone, one had a person having dental work done, and one had a picture of a face with a neutral expression. We were asked to get up and go stand by the picture that represented our feelings about change. I immediately went over to stand by the picture of the ice cream cone. When I glanced around, everyone else in the room was standing by the picture of the dental work. People have very immediate reactions to change and those reactions factor heavily into how supportive (or not) they will be toward any efforts to change organizational culture.
Effectively changing an organizational culture requires leveraging change management principles. My colleague, Kevin Carter, who serves as the Vice President of Strategy and Assessments for The Winters Group, developed a model of change management specifically for culture change. He often talks about the emotions and fears wrapped up in culture change and how they impact each stage of the ADKAR model of change management (Awareness, Desire, Knowledge, Ability, and Reinforcement.) Implementing a strategic organizational culture improvement initiative while neglecting change management principles will set you up for failure.
Culture change is not simple. It’s not quick, nor is it easy. It requires people, including and especially leaders, to learn and unlearn, accept uncertainty, adapt to ebbs and flows, and accept periods of progress and regression. Most importantly, it requires self-awareness and reflection that many might be unused to or uncomfortable prioritizing. This is also work that people might have little to no foundational understanding about.
There is little, if any, cultural competence education embedded in standard U.S. K-12 or higher education learning. Efforts to develop and deploy programs that emphasize social-emotional learning have received swift and aggressive pushback from conservatives and haves become a lightning rod for school districts across the country. It’s true in business settings as well. Visceral reactions to even the concept of self-understanding and cultural awareness can cause disruptions at the very onset of your efforts. Many on the team might initially struggle with understanding why the work is important in the first place. (Addressing this should be part of the strategic plan mentioned above and is a key function of change management.)
Cultural competency and understanding is a challenge outside of organizations. Adding to this, the “culture wars” have become increasingly polarized and harmful.
The role of DEI in organizational culture
In the culture wars, Diversity, Equity, and Inclusion are right on the front line. Corporate DEI efforts hit a flash point in 2020 after the murder of George Floyd. Companies were hiring Chief Diversity Officers at a furious pace, establishing ERGs, and throwing money at DEI trainings. Many were “look good, feel good” initiatives that checked the boxes for corporate culture, but didn’t require much effort or mental investment. It was a fire sale, with leaders not necessarily caring about a vision or strategy for DEI, or even focused on effective measurement or metrics. It was an urgent push to do “something” and respond to the changing landscape, but little thought of planning into what that meant or how it fit within the overall organizational goals. Many of the efforts were “one and dones” or surface level initiatives like cultural appreciation events or corporate donations.
Then came the backlash. As people’s memories and fervor faded and economic conditions changed, leaders looked for areas to cut back — DEI was a juicy target. As with any initiative, those without prior planning, strategy, or metrics and goals often don’t produce measurable results that matter. Thus, leaders going back to evaluate the effectiveness of DEI efforts that weren’t thoughtfully and intentionally planned out felt justified in cutting those programs. It was essentially an exercise in maintaining the status quo. The onslaught of oppositional legislation against these initiatives, like Florida’s Stop WOKE Act and the Supreme Court decision that ended affirmative action in higher education had a chilling effect on this work and was another signal to some leaders that it would just be simpler and easier to walk away from DEI and let the organizational culture evolve organically.
What’s next?
As we embark into 2024 — a year sure to be polarizing with a major election on the horizon and continuing global unrest — culture and cultural competency should be at the forefront of our minds. This is not only an opportunity, but an imperative for leaders to commit to and support the development and cultivation of a healthy, vibrant, and thriving corporate culture. More than ever, it will serve them, not only in attracting, engaging, and retaining top talent, but it will also help them weather the volatility and uncertainty of the sociopolitical challenges yet to come. At a time when the words “diversity,” “equity,” and “inclusion” have been weaponized, it will require fearlessness and steadfast conviction in the face of resistance and pushback that they may face. But it is critical when you consider the cost of not acting. Investing in the work it takes to create a culture of safety where everyone is seen, heard, valued, and can bring their full, authentic, and best selves to work every day is an investment in an organization’s present and future success.
How would you rate your organization’s culture? What is the number one thing you would like to see improve? Let me know in the comments!
Further reading:
Research: Employee Retention a Bigger Problem Than Hiring for Small Business
U.S. Employee Engagement Needs a Rebound in 2023
Less than a third of U.S. workers feel engaged at work, Gallup finds : NPR
