What REALLY Boosts the Bottom Line? Workplace Culture

Gustavo Grodnitzky Culture Trumps Everything, Organizational Culture, Organizational Effectiveness

“Middle management is where culture goes to die.”

I routinely make this statement in my culture presentations – often receiving something between giggles and guffaws (also referred to as “knowing laughter” in the speaking world). I follow that up with anecdotes showing that managers manage tasks and bottom-line numbers, while leaders lead people.

Now, finally, science, in the form of this study, provides support to my statement and all my anecdotes. (If you can sense the excitement in my keystrokes, it’s only because I am indeed excited.) In it, lead researcher Matthew Quade, an assistant professor of management at Baylor University’s Hankamer School of Business, finds that:

  1. Managers who focus on tasks and bottom-line numbers rather than relationships and connectedness have low-quality or poor relationships with their employees.
  2. In response, employees feel disconnection from the supervisor. (I would add also the organization, although the study did not specifically consider an employee’s connection to the organization.)
  3. As a result, employees withhold performance. This is important, because your employees’ willingness to go above and beyond is the only competitive advantage you cannot buy, sell or trade — or have borrowed, copied or stolen.
  4. When a manager focuses on tasks and numbers and the employee values relationships and connectedness, the damage in performance is more severe.
  5. Even when both the supervisor and the employee focus on tasks and numbers, performance still suffers. That’s because exceptional performance is driven by your culture.

This last finding is particularly interesting. As a consultant, I often encounter managers who swear by culture fit.  It is often framed as, “If we find and hire people just like us – those who are focused on the bottom line – then we are assured that we will get the best performance.”  If you are a manager or leader in an organization that hires for culture fit and you are certain your people are driven to the best performance possible by bottom-line results, please reread bullet #5 above. The data simply don’t support that belief.

Even when both the manager and the employee are driven by bottom-line results, the negative effect of that bottom-line focus is not mitigated. It is the supervisor’s focus on the social exchanges and interpersonal aspects of the relationship (connectedness) that adds to the bottom line.

Want a solution?

If you are a leader who focuses on tasks and the bottom line, or you’re in an organization that has historically done so, what can you do?

Here are my suggested steps – supported by the research:

  1. Understand that your bottom line is a result of your culture. Outstanding financial performance and outstanding organizational culture are inextricably linked, and culture comes first.
  2. Ensure that when you are focused on the bottom line that you are also showing consideration for effects any changes will have on employee relationships, well-being, and perceived ethical behavior.
  3. Interest in employee relationships and well-being must be If you focus on relationships just to improve the bottom line, that is not genuine. People sense insincerity like dogs sense fear. Your efforts will be for naught.
  4. Consider tying another meaningful metric to your bottom line, such as developing metrics for your organizational cause or purpose. When you add metrics to your cause, you will be adding metrics to your bottom line. People work harder for cause than for cash. If you focus on achieving your organizational cause – through the development of your culture – the profit metrics will follow.

I’d love to hear your questions or comments. If you would like to discuss this topic further, just drop me a note.

Keep cultivating your culture!