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Perspectives

Culture vs. employee engagement

Avoiding the runaway strategy bus (or getting it under control before it crashes)

Only 12 percent of companies surveyed in 2016 believe they understand their work culture, and in 2015 less than half reported they were prepared to tackle employee engagement.

We're having a #TBT moment

We're thinking about the classic '90s movie, Speed. You remember it—there's a runaway bus that can't drop below 50 mph or it will explode AND the driver is critically injured—dun dun dun…. Cue Keanu Reeves and Sandra Bullock jumping in and guiding the bus safely through traffic while diffusing the bomb and saving the day. What brought this to mind (other than a recent TV movie marathon on a rainy Sunday afternoon)? It's a situation we see play out repeatedly in the workplace.

Taking a passive approach to culture and employee engagement

Some leaders unintentionally set up their organizations in this way by taking a passive approach to corporate culture and employee engagement. Dramatic, we know, but stick with us for a minute. The organizations are cruising along on the path to executing their strategy, and things are going pretty well, so no one pays much attention to the driver or vehicle, helping them navigate their journey until things start to veer off course. By then there are often timing constraints, transformations, leadership transitions, or other complicating factors that create additional tension and barriers to getting back on course. In one scenario, the organization is a little derailed on the journey to executing its strategy or it misses earnings for a quarter; in extreme cases, we may see the consequences play out on the front page and in the blogosphere, harming corporate and employer brands in the process.

But things don't have to get this far. With some thoughtful planning and management, leaders can effectively match the driver of strategy execution—culture—and the vehicle—employee engagement—to set themselves up for a strategy execution ride that's less Speed and more Driving Miss Daisy.

Many leaders know they need to do this–in fact, nearly nine out of 10 executives surveyed cited work culture and engagement as important or very important in Deloitte's 2016 Human Capital Trends Report. Yet, only 12 percent of companies surveyed in 2016 believe they understand their culture,1 while, in 2015, less than half (46 percent) reported that they are prepared to tackle the engagement challenge.2 This means there may be a veritable highway full of runaway buses, creating the potential opportunity to break away from the gridlock through a unique competitive advantage—your inimitable corporate culture, powered by an engaged workforce.

Taking a proactive approach to culture and employee engagement

Organizations that take a proactive approach to creating a culture defined by meaningful work and deep employee engagement can outperform their peers. Companies that proactively manage culture demonstrate revenue growth over a 10-year period that is, on average, 516 percent higher than those who do not.3 However, companies should recognize that culture and engagement—while linked—are two different concepts.

Culture is a system of values, beliefs, and behaviors that shape how actual work gets done—"the way things work around here." In contrast, engagement is about employees' level of commitment to the organization and their work—"how people feel about the way things work around here." Both are critical to business performance, hiring, retention, and innovation. For example, organizations that actively manage their cultures typically have 30 percent higher levels of innovation and 40 percent higher levels of retention.4 Additionally, companies with highly engaged workforces outperform their peers by 147 percent in earnings per share and their employees are 87 percent less likely to leave.5

Enabling your organization on the strategy execution highway

With stats like these, it's clear to see why actively managing culture and engagement is critical to enabling your organization on the strategy execution highway. Easier said than done. Culture and engagement are living things that need to be reinforced and adjusted over time as strategy, circumstance, and people change. For culture, this requires adjusting the knobs and levers that drive actions and performance, actively managing behavioral and process changes that can have the most lasting impact on the bottom line, and pulling through the emotive engine to make those connections stick. For engagement, this means measuring and managing engagement at the line level, in an ongoing, always-listening process that enables organizations to actively hear and respond to their employees in timely and focused ways. This might include not only using a comprehensive baseline survey but also taking more frequent pulses—at least quarterly—to dig into the issues.

While it's possible to address these internally, using homegrown solutions, it's important to bring in your own Keanu—in the form of data-driven insights—to develop an informed path forward. At Deloitte, we leverage the power of our proprietary tools, CulturePath and EngagePath powered by the Simply Irresistible OrganizationTM, to effectively measure and improve culture and engagement. We find these analytics-driven tools with dynamic data visualizations to be particularly useful in helping to create common understanding across executive teams and business leaders around concepts that can feel nebulous.
Regardless of the tool that your organization uses, understanding the components of both culture and engagement and how they shape the path to reaching your strategy is critical and must be actively managed, or leaders could risk putting themselves and their organizations in a Speed scenario.

1 Global Human Capital Trends 2016, The new organization: Different by design, 2016.
2 Deloitte, Global Human Capital Trends 2015: Leading in the New World of Work, 2015.
3 Kotter, John and Heskett, James, Study on Corporate Culture and Performance, 2011.
4 Bersin, Josh, Becoming Irresistible: A New Model for Employee Engagement, Deloitte Review, Issue 16, 2015.
5 Gallup, The Engaged Workplace, 2013.

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Learn more about our HR solutions:

CulturePath: A comprehensive diagnostic solution that helps organizations drive precise and targeted cultural change. Request a conversation to learn more about CulturePath.

EngagePath: A solution that provides a comprehensive view of employee engagement by capturing data across organizational groups and topics, helping drive business results. Request a conversation to learn more about how EngagePath can help your organization.

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