Is Profit a Must for Great Culture?

Ed Baldwin Culture, Ed Baldwin, Employee Engagement, Employment Branding and Culture, HR, Learning and Development, Retention, Training and Development

When I take a quick scan of any Best Places to Work list, I pessimistically always wonder whether these places would be on the list if they weren’t profitable. 

Do you feel having a great culture mandates that you must also have a healthy bottom line? Does big profit always precipitate enviable culture?  While I haven’t taken the time to do the math (and I don’t have a team of researchers working for me, yet) I suspect the answer is YES.    

Sure, there’s the occasional start-up, not-for-profit or long-standing organization that consistently commits to having a great culture and workplace regardless of profitability.

But these companies are rarer than the way I order my steak. 

And for every one of these exceptions, there is a herd of insanely profitable companies on these lists that allocate copious amounts of money and resources to ensuring their employees have a great place to go to work. 

Now I also know there are companies out there that are insanely profitable that don’t give two shits about their company culture. And if they do profess a people-first approach, it’s just to extract more profits from their cost of labor. Hell, I’ve worked for a few of them. 

But this much is most certainly true. It’s way easier to create a great culture when you’re swimming in cash than when you’re only marginally profitable or losing money.  If you’re not profitable, the struggle to create and keep a great culture is REAL. 

And yet, most of us don’t work for an insanely profitable company.  Most of us fight (and/or beg) for budget and resources, and yet we all yearn to create a great culture and work environment for our employees. So what’s an HR pro to do? 

Here are my suggestions. 

When done well, each of them can be executed very frugally and yet they can still form the foundation for a Best Place to Work – whether the organizations that run these lists acknowledge it or not.

  • Solicit employee feedback, and use it.  Those last three words are key.  If you ask employees for feedback and then don’t do squat, that’s worse than not asking at all.  Ask and act on those things you can impact. 
  • Develop flexible work practices.  So many companies fear the worst when contemplating such policies.  Employees will be less productive, less connected, and take advantage. The science and data says the opposite. Take the plunge and employees will return their appreciation in spades.     
  • Train your managers to be strong people leaders.  We’ve all heard the adage that people join companies and leave managers.  It’s true, a great manager cures a lot of employment ills.  And a shitty manager means all the other perks don’t matter.  Make sure you rid yourself of shitty managers and train your managers to be the best in the business.
  • Create development opportunities.  Everybody wants to get better.  Everyone.  Don’t convince yourself otherwise.  Then, don’t translate this tip so narrowly as to sending your people to a conference, or paying for their MBA.  Sure, that’s nice, but lots of companies can’t afford that.  But what you can afford is to allow your people to cross-train in another department, shadow someone they admire and look up to, or have your leaders set aside time for mentoring.  In my experience, this practical and applied training is appreciated more than going to a boring seminar away from family or losing endless nights attending class. 
  • Ensure there’s a great feedback/review process.  Communicate with your employees about how they are doing.  Keep them informed.  Shoot them straight.  “You’re awesome at this, you need to get better at that.”  And communicate feedback regularly.  At least once per quarter.  If you’re not willing to invest 30 minutes every quarter then maybe you’re not as committed to a great workplace as you think.

If you work for a marquee employer with top compensation, 100% company paid benefits, 4+ weeks of PTO, an in-house Starbucks, and free chef-prepared meals in your breakroom, congratulations!  You’re in the stark minority.  This post was not written for you.  I’m fairly certain you didn’t read this far down anyway.   

But for the rest of us, crafting thoughtful ways to fulfill each of the bullet points above will have you playing in the big leagues in no time.  If your company excels at all five you’ll be able to confidently go toe-to-toe with even the most enviable companies with loads of Best Places to Work plaques in their reception area.

Hell, maybe you can even attract some HR pros from those marquee teams who want to do real work.