Corporate Culture and the Cost of the Disengaged Employee

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What is corporate culture?

Well, that question requires a lengthy explanation, but here’s the short answer:

It depends on who you ask.

Corporate, or “organizational” culture seems to be one of those “I’ll know it when I see it” concepts.

We’re all familiar with the idea, we’ve all experienced it and yet, when asked to define it, well, there are many different views on what it is.

WHERE’s a good place to start in order to unearth an answer?

Google, of course. Google the phrase “corporate culture” and you’ll have your choice of dozens of sites, many offering quotes that will “inspire your team.”

Here are just a few examples:

“Why is culture so important to a business? Here is a simple way to frame it. The stronger the culture, the less corporate process a company needs. When the culture is strong, you can trust everyone to do the right thing.”

– Brian Chesky, Cofounder and CEO, Airbnb

  Until I came to IBM, I probably would have told you that culture was just one among several important elements in any organization’s makeup and success — along with vision, strategy, marketing, financials, and the like… I came to see, in my time at IBM, that culture isn’t just one aspect of the game, it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value.”

– Louis V. Gertsner, Jr., former CEO of IBM

 Culture guides discretionary behavior and it picks up where the employee handbook leaves off. Culture tells us how to respond to an unprecedented service request. It tells us whether to risk telling our bosses about our new ideas, and whether to surface or hide problems. Employees make hundreds of decisions on their own every day, and culture is our guide. Culture tells us what to do when the CEO isn’t in the room, which is of course most of the time.”

– Francis Frei and Anne Morriss, co-authors of Uncommon Service: How to Win by Putting Customers at the Core of Your Business

Here’s how defines organizational culture:

“Organizational culture consists of the values and behaviors that contribute to the unique social and psychological environment of an organization, and includes an organization’s expectations, experiences, philosophy, and values that hold it together. It is expressed in its self-image, inner workings, interactions with the outside world, and future expectations. It is based on shared attitudes, beliefs, customs, and written and unwritten rules that have been developed over time and are considered valid.”

organizational culture

While multifamily professionals may define culture in very different terms, we are, as an industry beginning to agree on one thing:

Company Culture IS Important.

But WHY is company culture important?

Every organization operates through a code of behavior that is driven by the collective values and beliefs of those individuals in the organization. Often this “code” is articulated in documents put forth by the company’s Human Resources department. Documents that outline what behavior and practices are acceptable within the organization, and which practices are not.  But both defining and “enforcing” a corporate culture are not as simple as articulating policies and procedures in an employee handbook.

The fact is, culture operates outside the handbook and often below the surface. In property management, while policies are necessary of course, what actually happens within each region or individual community is often far different from what is “allowed.”

This “below the surface” influence on employees is what truly determines how people treat each other, how they learn and communicate, which practices they choose to follow, and which practices they may choose to ignore. Obviously, culture affects everyone in the organization, and at the same time, every employee, in the proverbial continuous feedback loop, contributes to it.

how do you fix broken company cultureHOW does one fix a broken culture?

So, when your culture isn’t ideal (ideal culture being one that A Great Place to Work defines as a “high-trust environment that  fuels performance, attracts and retains talent, and drives success”) ; what is a leader to do?


A recent Gallup State of the American Workplace report provides fascinating insight into the factors that impact employee attraction, satisfaction, performance, and retention in workplaces across the U.S. In it, Gallup reports that the US is in the midst of an engagement crisis, with a staggering 2/3 of US employees disengaged at work.

The proof is in the numbers: Gallup also discovered that organizations scoring highest for employee engagement earn 2.5 times the revenue of the lowest rated. They also found that teams within an organization that rates in the top 50% on both employee and customer engagement perform 24% higher financially than teams that fail to engage their employees and customers.

engaged employeesWHAT is the lesson for multifamily organizations?

Property management teams with a strong organizational culture, where employees feel both engaged and enthused about their work, can reasonably be expected to outperform others in a variety of ways. They may go the extra mile for your customers by being willing to stay late for a prospect, provide a more personalized experience for a new move-in, or spend a little extra time patiently helping an elderly resident in need of assistance.

Contrarily, disengaged employees lack enthusiasm and pep in their step, and are often the first ones out the door at quitting time.  The contrast in such behaviors adds up over time, and the effects become exponentially more significant as they become norms across the organization.

Cultures that proactively nurture employee and customer engagement have a significant advantage over disengaged cultures.

In a culture of engagement, employees and customers are both happier. Employee tenure is longer and resident turnover rates are lower.

And, a culture of engagement is evident where it matters most: In the bottom line.



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