Poor culture doesn’t only affect business by deterring talent, it can also be a real turn off for consumers. Whatever way you look at it, business culture affects reputation. Businesses are under increasing scrutiny from the media, consumers, employees and other stakeholders. The digital age commands it.
Poor practice in businesses used to be hidden away from consumers, but not anymore. Tech has changed consumer behaviour. Buying decisions are influenced not only by product reviews but also by company reviews and commentary on a wide range of social media platforms and review sites, such as Glassdoor.
Poor business practice is much more easily exposed (Uber, ESPN, Monster Drinks, Sports Direct, and Ted Baker are just some that have been ratted out). The fact is you can’t hide bad business culture anymore.
Back in 2017, The Independent reported that nearly half of UK consumers abandoned brands because of poor corporate behaviour. Consumers are increasingly interested in the ethical behaviour of the companies they are buying from.
As a result, growing a positive company culture is no longer optional. To survive in today’s marketplace, businesses have to create a culture that both their employees and their consumers can connect with. Good culture is an essential ingredient of business success.
How poor culture is affecting SMEs in the UK
In 2018 there were 5.7 million SMEs in the UK, which accounts for 99 per cent of all businesses.
According to a report on The Culture Economy, by Breathe HR, poor workplace culture is costing the UK economy £23.6 billion every year.
Company culture is the missing piece of the UK’s productivity puzzle. Businesses with a positive culture have motivated, engaged, happy and highly productive employees. Conversely, organisations where culture is poor are haemorrhaging profit through demotivated staff, high employee turnover and poor performance. And it’s not just employees who are either engaged or put off by a business’s culture. Consumers care too.
Breathe’s report highlights the fact that “People are increasingly demanding and expecting that business plays a positive role in their lives and that of their communities.” Poor culture isn’t good for business, the economy or for society as a whole. The conscious consumer has arrived and is going nowhere.
The impact of Millennials on business
Millennials are slowly becoming the bulk of the workforce. Engaging Millennials as both employees and as consumers is incredibly important for businesses. Culture and technology are the answer. Let’s take a look at each of these as engagement tools.
Millennials are faced with the prospect of expensive homes, no pension and not being able to quit working until they are well into their seventies. As a result, they want more from employment. Flexible working, better work-life balance and better benefits are more important to Millennials than they have been to past generations.
Millennials are also swayed by corporate social responsibility. Organisations which are taking a stance on social issues are respected and sought-after by the Millennial generation, both as an employer and as a brand they can buy into.
Millennials are the most tech-savvy generation so far. They’ve grown up on it, almost been bottle-fed it, so any business behind with the times when it comes to tech won’t hold appeal. Social media enables consumers to interact with businesses like never before and Millennials in particular are demanding more from their relationship with their favourite brands.
Culture is brand
Culture and brand used to be quite separate entities, but that’s not the case anymore. A strong business culture is hugely influential when it comes to brand. Culture feeds the brand’s narrative and connects consumers to it. Consumers who identify with a business’s ideals are much more likely to get behind it.
According to Flux Trends, “consumers increasingly want to know if the brand they are buying fits in with their worldview and ethical standpoint.”
Positive culture, happy employees, happy customers
Consumers are drawn to exceptional customer service. Supported, well-trained, empowered employees are critical for exemplary customer experience. A positive business culture is an essential ingredient for this.
Doug Conant, former CEO of Campbell Soup, once famously said “To win in the marketplace you must first win in the workplace.” Company success can be defined by the happiness of its employees and the happiness of its consumers. Employee engagement has a strong connection to consumer satisfaction. Successfully delivering both comes down to business culture. Positive feedback from customers also plays into employee engagement, further motivating employees.
Patagonia gets it
US outdoor apparel maker, Patagonia, takes employee engagement and business ethics seriously. It makes the business attractive to consumers too. Committed to its employees, Patagonia spends around $1 million every year subsidising onsite childcare facilities for employees. An internship programme pays for employees to work for up to two months for a non-profit environmental organisation of their choice.
Back in 2017 the business replaced its web homepage with a black screen, which read "The President Stole Your Land", with the sub-heading "In an illegal move, the president just reduced the size of Bears Ears and Grand Staircase-Escalante National Monuments. This is the largest elimination of protected land in American history." Patagonia sacrificed its ecommerce to deliver the message and direct its consumers to take action.
The brand’s first ever television ad wasn’t to promote Patagonia products. It was a bid for customers and environmentalists to stand up against the Trump administration and defend public lands. Consumers love Patagonia. It’s one of the best environment, customer and employee friendly companies around.