Corporations and institutions with relative high visibility have a lot to lose when internal misconduct is exposed. If you are an institution, such as a school, prison, or government body, internal misconduct can strongly shake the public’s confidence in how that misconduct will impact the groups and communities being served. Embarrassing, pervasive issues, such as a business party culture, can really drive down faith in your brand. If you’re a large corporate chain, such as Walmart, or McDonald’s, your corporate culture is subject to criticism from current/past employees, with heavy emphasis on how that corporate culture effects both productivity and the workforce.
Just one week after ringing in the new year, McDonald’s current CEO, Chris Kempczinski, has announced that he plans to bring an end to the business party culture embroiled in their corporate atmosphere. According to The Wall Street Journal, Kempczinski, “…is seeking to restore a more professional culture at McDonald’s after what some current and former employees described as an environment influenced by his predecessor’s late-night socializing with some executives and staffers at bars and flirtations with female employees…” This business party culture was pervasive. His predecessor, Steve Eastbrook, was terminated in November of 2019 after he confessed to having a relationship with an employee. What is particularly problematic about these circumstances is that healthy corporate culture begins with leadership. When leadership behaves ethically within the organization, employees are more likely to follow that example. When executives, managers, and supervisors are not held accountable for bad behavior, it sends a message to the rest of the organization that poisons the well of corporate culture.
But inappropriate personal conduct is not the only challenge
currently facing McDonald’s culture. Strains imposed by the franchises’
renovation program has franchisees challenging their relationship with the
corporation. In addition, unions are still reeling from a decision handed down
by a national union-organizing supervision board, which states that the
corporation will no longer be liable for labor violations committed by its
franchisees. Labor advocates who made their concerns apparent to the board were
ignored, and the decision came down with a 2-1 vote. In the background,
employees continue their cause of “Fight For 15,” in reference to their desire
to have McDonald’s starting wage raised to $15 per hour.
Kempczinski’s promise to diffuse a business party culture within the corporation is a promising start—however, in order to make meaningful changes to the corporation, there needs to be a top-to-bottom evaluation of internal processes, and of the behavior exhibited by leadership—both in the public view and behind closed doors. That is why so many institutions and corporations are subjecting their internal operations to a corporate culture audit to ensure that they won’t be caught unawares about the debilitating, pervasive issues within their organization. Regardless of quality, corporate culture moves in a cycle. The actions of leadership filter down through the workforce, influencing productivity and engagement from employees. Employees either contribute positively or negatively to the corporation as a result of that leadership, and that leads directly back to leadership in a supervisory capacity. For the sake of a long-beloved American corporation, let’s hope that Kempczinski follows through on his promise for change.
Every CEO wants to believe their employees are clocking in for more than a paycheck every day. They believe in their corporation’s mission and perceive their employees to be just as enthusiastic and engaged as they are. They believe their employees’ compensation is more than enough motivation to fully dedicate themselves to the company’s mission in their day-to-day operations. However, a recent study conducted by Glassdoor has shed a very different light on employee engagement with regards to corporate culture.
Glassdoor surveyed 5,000 adults across 4 different countries, including the United States, and found that salary is not the only factor in an employee’s satisfaction with their job. Job seekers are upping their standards when applying for jobs. The study concluded that 70% of applicants would not apply to a company unless its values align with their own. This will only become more prevalent as time marches on, with data points on age producing some unexpected results. The study defined the demographic of millennials as individuals aged 18-34. Those individuals indicated they valued a company’s culture more than the level of compensation. This is significant, because millennials are currently the largest employed generation in the workforce.
As they age, corporations will feel the pressure to change their corporate culture so they can retain existing employees and create a healthy corporate environment for future employees. Social media and smart technology are largely responsible for this shift in the attitude of job seekers. Not only is news and information about corporations ubiquitous and accessible, but current and former employees also have platforms like Indeed and Glassdoor to share their employment experience with the world. With a constant communication line to the rest of the world, the line between one’s work life and personal life will only continue to become more blurred. As such, daily happiness and satisfaction within one’s job is more important than ever.
The study went on to state that 74% of employees who participated in the survey said they would leave a position if the company’s culture has declined. Amanda Stansell, the senior economic research analyst for Glassdoor, points to all of these as reasons why corporations must take their current culture into account, “Even if the company culture is good, it can change, especially if they aren’t reactive and constantly measuring employee satisfaction and actively working to improve it.”
Forbes also noted in recent months that many corporations are expanding internal investigation teams in order to address pervasive internal issues more efficiently. The more we know about the cycle of corporate culture tells us when leadership is engaged. CEOs and management must engage with their employees beyond their quotas and productivity level. Some leadership may believe things like a pitch-in or birthday parties for employees are enough to keep employees happy, but the problem runs much deeper. Employees want to see leadership actively improving daily operations by listening to employee feedback and instituting new strategies that contribute to the health of the workplace. This means supervising communication lines and holding apathetic employees accountable when they contribute to stalls in operations. It is an opportunity to lead by example for the entire workforce. When employees see engaged leadership, they feel validated in their part of driving success within the corporation. This leads to increased engagement within the workforce, which leads to increased productivity. Increased productivity means happy leadership, which starts the cycle anew with happy employees.
When a corporation is functioning as a well-oiled machine, it can be easy to neglect the corporate culture in day-to-day operations. If productivity is up, leadership remains happy—but executives and management must make a focused effort to take an interest in their employees’ happiness in the workplace. This prevents employee apathy, improves daily operations, and overall, contributes to the long-term health of the company. The company retains employees at a higher rate, which decreases turnover expenses, and creates a fortified workforce essential to promoting success.
The biggest mistake executives make when trying to improve their corporate culture…
The corporate culture within any company, without question, effects their bottom-line day to day. Just to name a few avenues, this occurs through operations, interpersonal relationships between employees, and a level of engagement from leadership that requires consistent enforcement of their established mission and values. Because a corporation’s internal culture often remains hidden from consumer view, it’s not uncommon for leadership to simply restructure operations. Unfortunately, if every aspect of a company’s culture is not examined, this solution is just a band aid.
The Ice Berg Metaphor
When concerning a corporation’s culture, we often use the iceberg metaphor as a means of defining it. Ten percent of a corporation’s values and culture are above the water where the public and consumers can see it, and the other 90% lies below the surface. It’s that 90% that directly affects a company’s employee morale, productivity, and bottom line. A corporation often places its highest priority on how they are perceived by their consumer base, and therefore that 90% of company culture and values are either placed on the back burner, or corporations find themselves at a complete loss of how to get in front of the issues.
Some other band aid fixes for happy employees include things like discounted vending machines in the breakrooms, or regular celebrations of major holidays and birthdays. These lovely notions might improve culture for a day or even a week, but the pervasive internal problems will remain.
Happy employees are engaged employees. When a corporation’s culture is healthy, employees feel invested in the success of their companies. The company’s success becomes internalized as their own success, and they are more likely to be plugged in, to take initiative, and to think outside of the box when it comes to problem-solving.
When employees are leaning into their positions and actively working towards a company’s goals, that leads to smoother daily operations. Engaged employees are constantly finding ways to improve their processes so they can generate higher rates of productivity within their positions
When daily operations are streamlined, this yields higher levels of productivity within the company. An employee’s daily duties are no longer a monotonous checklist, but a recipe for success for their company. An engaged employee’s success is the success of everyone in the corporation, and the same is true of productivity. A single employee’s increased productivity is the entire company’s success. Not only does this set an example for all employees, but increased productivity is what helps a company grow, mature, and prosper.
This one is a no-brainer. Anyone who has ever been employed knows that a happy boss makes a happy employee. Leadership sees the increase in engagement and productivity and lean into that success. Good leadership will reward that success in tangible ways that will have long-term effects on the company’s culture. They promote or give raises to those employees who are giving 100%, empower those employees through collaboration and development, and are more open to the thoughts and ideas of employees who are contributing to their success.
When leadership is actively encouraging employees through a pure manifestation of the company’s mission and values, employees feel as if they are making a difference within their organization. This increases the feeling of purpose and desire for cooperative teamwork. These feelings inspire employees to continue their pattern of success through the diligent, genuine practice of a company’s established mission and values. Increased morale means happy employees, and that’s where the cycle begins anew, exponentially influencing a company’s success with each cycle.
Structure is Not Culture
The network of operations within a company will never have a direct effect on company morale. Poor daily operations due to structure are really just a symptom of unhealthy corporate culture—a manifestation of poor culture at work. To diagnose the problem, many corporations turn to independent firms to conduct corporate culture audits in order to identify the problems within a company or organization. These firms measure a company’s daily operations, their quality of communication, and interpersonal relations among employees—just to name a few factors. When a corporate culture audit is comprehensive and curtailed to the organization, the findings can be invaluable to leadership that seeks to grow and mature in tandem with their values.
As mentioned above, employees who see a consistent display of established values from leadership, they’re more engaged and productive. It’s one thing to have the company’s mission statement and list of values posted online or on the wall within a workplace. It’s a completely different ballgame when leadership puts their money where their mouth is, and serves as an example for the entire workforce. That example can have a ripple effect creating an interpersonal trust between employees, in which they all feel like they’re on a team, working towards the same goal. It is in the nucleus of that atmosphere where real change and growth begin.