Are You Paying Culture Taxes?

Written by Tim Wat.

For more information or to contact Tim, email him at Tim.Wat@GRITTBusinessCoaching.com.

Difficult work, culture. Many of us have suffered through it. It can be a suffocating experience. Unfortunately, some of your employees may be living through it right now. For many busy owners, leaders, and managers, we think of our company culture like the quality of the water fish swim in – they inherited it, they just have to live with it – and they certainly don’t have the resources or means to try to improve it.

But a difficult work culture has a cost. Employees dread coming to work. Many are demoralized. Communication between staff is strained and tense. The energy, passion, and joy of enjoying one’s calling is not a part of their daily lives. A few of your better performers are quietly putting out feelers for a more enjoyable place to work. Productivity suffers. Energy that should be spent on innovation and production is wasted on “covering one’s bases” and other self-protection activities.

There is an aggregate cost of difficult work culture. We call that cost the payment of a “culture tax”. But who can tell us how much this “culture tax” adds up to?

We may suggest an estimate on the annual cost – the Journal of Applied Psychology has published several academic research articles by Christopher Rosen, University of Arkansas, Russell Johnson, Michigan State University, and others, suggesting that “workplace incivility” and related behaviors costs the organization an average of $14,000 per employee annually. That’s a staggering amount and significantly larger than most managers might guess.

The research defines workplace incivility as “low intensity deviant behavior with ambiguous intent to harm the target, in violation of norms for mutual respect”. Many of us know what this looks and feels like – the office bully, the micromanaging boss, that ‘difficult’ gatekeeper. The researchers suggest chronic workplace incivility leads to low-level retaliation and responding-in-kind, and eventually results in employees losing their patience, tolerance and self-control – leading to more of these incidents and a downward reinforcing spiral.

Consider the culture established throughout your company. Are there nagging symptoms of “culture tax” – lost productivity, absenteeism, lackluster customer service, lack of employee engagement? Are there “tribal wars” between sales and operations? Is there a nagging suspicion your most valuable resource class – your human resources – could be delivering better performance? You may be struggling with the tell-tale symptoms of “culture tax” without identifying it.

Even after realizing the existence of culture tax, many managers ask, “How can I afford to improve my culture?” A better question may be, “How can I afford to not invest is remediating such a costly drag on my return on assets?”

There are several practical steps to improving corporate culture. We agree with many who believe quick fixes and one-off efforts are seldom effective. Worse, they often signal a lack of sincere commitment to fixing root issues.

At GRITT Business Coaching, we believe one of the first steps is assessing where you are and taking honest stock of the situation. We use standard benchmarking and analysis tools like eNPS scores and OCAI assessment to take a deep dive look into your environment. An effective organizational consultant or coaching partner should be able to provide meaningful insight and analysis of your company’s current culture condition, and suggest practical steps that deliver measurable results.

While culture tax is a real and destructive cost in many organizations, the good news is there are proven, effective methods and strategies to reverse course and transform your human culture into a sustainable competitive advantage.

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Tim Wat
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1 comment

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    David Ritzman

    So good, Tim! Peter Drucker’s message is even more relevant today in challenging, divisive times as when he first spoke it…”culture eats strategy for breakfast.” Employees executing it will fail if the appropriate culture is not created by leadership. Love your first step of a culture assessment! Thanks for sharing!

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