portfolio value from 2002 to 2012. Performance is expressed as average
- Standard & Poor’s 500 4.12%;
- Good to Great 5.32%
- Firms of Endearment 13.1%
- Best Companies to Work For 16.39%
A study in Australia’s workplace performance measured service firms’ productivity and identified that high performing workplaces have a profit margin three times higher with 15.63% (average) to low performing workplaces. The major factor to improved wealth creation is a workplace culture that has a focus on employees, customers and innovation driven by authentic leadership.
Wealth through an employee culture
Fulfilling employees basic and growth needs leads to highly engaged employees. Engaged employees are enthused when they can use their talents and discretionary effort to make a difference to the business’ success. And they stay with the company saving on staff turnover costs of 50% to 150% of the annual salary. Examining participants in the 2013 Best Employer Awards, a 5% improvement in engagement was associated with a 14% increase in profitability.
The entire workforce needs to build an engaged workplace: Individuals need to take ownership, have clarity and take action; managers need to build relationships, coach and have regular dialogue; and executives need to develop trust, open communications and lead the required workplace culture. Authentic leadership and highly developed people management skills are essential. In addition, an employee focused culture develops
- job satisfaction,
- a sense of belonging, emotional and physical safety (WH&S
- self-esteem through the development of skills to fully function in
- a value, feedback and recognition system for contributions made,
- fair treatment of all through transparent processes and the rewards
Wealth through a customer satisfaction culture
High performing companies spend time and effort to understand their customers, seek feedback and integrate this into new or updated service and product offerings or process improvements. A customer focused culture has to be responsive to change, has an external networked rather than internal organisational view, and values relationships, partnerships and collaborative efforts between customers and employees.
Wealth through an innovation culture
Innovative organisations seek to develop new products and services, operational processes, managerial methods and structures, and marketing methods. They have the mechanisms to generate ideas and translate them into innovation outcomes, making innovation a conscious business activity with a development process, allocated resources and management attention. An innovation culture allows the freedom to try; allows for calculated risk and failures; allows for time to think, imagine and reflect; creates avenues to glean diverse views and support collaboration; taps into people’s motivation; and builds flexibility and positivity into its workforce.