Can your business culture help with cost control?

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This summer AccountingWEB has begun turning its attention to different aspects of cost control. Outsourcing has come under scrutiny as a cost-saver, and now it’s the turn of something that some (though not all) might see as less tangible – the culture of the business. In what way does embedding the ‘right’ business culture impact on costs and margins? Christian Annesley takes a look.

Many business owners are moved to take the plunge and launch their own venture because of a strong desire to work in a company context and environment with just the right vibe and values – somewhere they and those around them are happy to go every day and get to work.

And those values, if they are held onto and lived by those in the business, matter a lot when it comes to the way that a company runs, including its efficiency and cost base.

Why? Because if everyone is pulling in the same direction then the cost of getting things done usually comes down.

To illustrate the point, just consider these three examples (among many) of the cost to a business of a culture that’s gone off track:

  1. Defensive employees: Whenever someone senior points out an area that needs improvement or a problem that needs a remedy, employees react badly. Any business where honest dialogue is rare is a business at risk.
  2. Fear of risk-taking: If key staff are reluctant to introduce innovation, stop to consider why. If senior management have blamed employees for missteps in the past, that can knock confidence and make even the most confident of staff more risk-averse.
  3. Talented people, average performance: Talented people want to deliver great results, not only for your business but also for their CVs. If your star employees are delivering average sales, productivity and profitability, it usually means they are probably not getting what they need from the business.

Workplace culture and costs

Does that one-two-three strike a chord? Whether or not it does, many whose work it is to look at workplace disciplines and culture are united about the cost risks of a mediocre or negative business culture.

Workplace wellbeing consultant Francis McGinty argues that workplace culture is a huge influencer on cost efficiency – and so must not be neglected.

“Any organisation that ignores or at best pays lip service to the pressures that cause mental anguish is paying a very high price both in the human resources and finances they are wasting,” he said.

McGinty also picks up on that need for a business owner or boardroom to self-consciously live a vision and create the right culture – and that’s potentially a big piece of work.

“The first step, for any business that has lost its way is to clarify and return to that initial vision that got the business started. That also means designing an action plan to achieve it. Don’t be greedy, though: aim to make changes that you cannot fail at if properly committed – and then build on the success that comes through.”

McGinty says that once a business works on its performance priorities it may well quickly start to build a culture advantage by leveraging the behaviour strengths in the business and improving on the weaknesses.

“This all flows out of a process and a commitment to establish performance priorities and to be honest about strengths and weaknesses – as well as plotting a way ahead.”

Once a business has decided what to work on, pinpointing where improvement is needed, and then shared that journey with everyone, it becomes straightforward to ‘live the values’ of the business and to feel the benefit of a culture that measures performance and values accountability.

If any of this sounds too vague in this kind of narrative summary, McGinty makes the point that a culture-focused process is focused on accountability at every step.

“A business should do things like maintain a steering group and a system to manage priorities and goals. These reviews need to be adjusted to focus additional time and attention on the top performance priorities and the value and behaviour shifts identified. The focus must be on results and on supporting the behaviour shift through recognition, coaching, removing barriers, and so on.”

Communication habits and routines to support the newly minted culture also need to be transparent, genuine and creative, added McGinty.

“Once you’ve started on this work, there is no going back. It needs to be carried through – and the financial and cost benefits will flow.”

How 1610 Leisure embraced Facebook

One example of how to embed this kind of positive workplace culture is to be found at 1610, a not-for-profit leisure trust that operates a range of sports and leisure facilities across 19 sites in the South West.

Rebecca Sawtell, head of marketing and communications for 1610, has recently overseen a project alongside its finance director to embed the use of Workplace by Facebook across the organisation, which has an employed workforce of 200 plus a significant number of contractors.

“Adopting Workplace and embedding it in the business has come about after lots of work at 1610 on employee engagement,” said Sawtell.

“We have a young workforce and our existing intranet wasn’t getting the attention, plus it was mostly pushed down messages.

“So finding a way to get staff involved was the key, and Workplace was identified as a natural fit.”

But what had 1610 been trying to replace or enable by adopting Workplace?

“We are only a few weeks into the adoption, so it will continue to evolve, but there are lots of distinct projects across the business and email threads just haven’t been working for us. It’s been holding us back. But the forums you get on Facebook are a great way to maintain contact – uploading images and videos and sharing quick updates in place of email overload.”

What Sawtell is saying, in part, is that there was a gap for a project management tool that 1610 needed to fill. Workplace isn’t a replacement system, but a much-needed addition to the organisation as it looks to drive efficiency and cut costs.

Culture and cost at Dobell

Dobell is an online retailer of men’s smart clothing, and another that is seeing cost control benefits flow from its attention to the business culture.

It launched in 2006 in its earliest incarnation, but in the past three years has really scaled, rebranding the business from MyTuxedo and climbing from a turnover of around £2m in 2013 to £12m in 2016. Another leap in its top-line numbers is expected this year.

Keith White, editor and head of PR at Dobell’s Eastbourne HQ, says the growth experienced by the company has driven changes to back-end systems in parallel with the more public journey of the business and brand.

Dobell in recent years has massively expanded its range of products, changing the profile of its whole offering, and moved into new markets overseas. And it’s a change that in part has been enabled by promoting a healthy business culture.

“For example, we use BreathHR as a cloud-based human resources platform, to allow us to manage holiday and staff appraisals, plus employee-to-employee feedback and kudos, too” says White.

“That’s been crucial as we have grown so fast as a business that you need a means of scaling up confidently and transparently. Our headcount has been growing at 20% a year, for example. We now have over 50 staff and could easily reach 70 by the end of this year,” says White. “You need to culture right to grow like this with confidence while keeping your costs on track.”

 Eight apps for projects, culture and improved costs

1. HipChat Hipchat lets you build rooms around functional teams and bring people together for ad-hoc conversations.  

2. Slack Easy to learn with good integrations, including links and file uploads that show up inline, with all the conversations searchable. You can also create a Google Hangout from inside a chat room.

3. Campfire enables password-protected group chats, and its network agnostic and easy to customise.

4. Basecamp is a classic project management tool. It makes it easy for people in different positions at a company to easily share files and stay in the loop on projects and client information. It’s particularly good for getting projects up and running.

5. Redbooth is a task-tracking app with built-in chat software. So you can assign tasks and use the same window to communicate with members about those tasks.

6. Wrike is a task and project management tool that makes it easy to message a team member through tasks and activity streams.

7. Microsoft Lync is a unified communications platform that blends video, phone, instant messaging and collaborative work environments into one space.

8. Bitrix24 has group chat and video, document management, its own cloud, a calendar for planning, email, a CRM system, human resource capabilities and more.

 

 

 

About Christian Annesley

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