Yes....Culture Does Come First

Comments reinforcing the importance of the customer or client in business are beyond ubiquitous. “The customer comes first,” and “The client is always right,” are concepts taught in every business school and to every young professional.

There is a powerful argument that principle is wrong. As is the argument employees come first.

There is no question the customer pays the bills. No matter how unique and compelling a product or service, without customers willing to consume or utilize that product or service, there is no revenue, and therefore no business.

Moreover, without committed, skilled employees, it is difficult, perhaps impossible to retain customers. Sir Richard Branson, the Virgin founder, makes this case in his compelling “employee first” philosophy, spelled out in this piece from Inc.

Yet a more powerful argument suggests a strong, aligned organizational culture empowers, retains and attracts employees and can overdeliver the promise made to clients and customers.? In fact, research shows a strong, aligned culture has a profound impact on employee recruitment and retention.

So, culture really comes first.

The amount of research linking organizational culture to employee retention is significant. High level perspectives can be found at the MIT Sloan Management Review, Gallup, Harvard Business Review, and from many other research and consulting organizations, including our own DHR Leadership and Organizational Consulting practice.

How important is retention? Research by American Progress suggests cost of turnover is roughly 20% of salary, however highly compensated executive turnover can be as much as 212% of compensation!

But culture also plays a powerful role in talent recruitment. LinkedIn research shows 66% of candidates identify culture as the top criteria in evaluating career moves! While anecdotal, we have found organizational culture is in the top two or three criteria for all candidates with which we engage,

Here is the strategic challenge. You and your competitors are in a street fight for talent. Whether your competitors recruit executive talent themselves or rely on executive recruiters, they are seeking competitive advantages in that talent brawl.

Culture can either be your greatest strength or your greatest vulnerability.

All executive recruiters with a sector focus (our team’s is the real estate sector) know which firms are culturally vulnerable to talent raiding. When engaged to fill a position, recruiters first go to their “most vulnerable” list. Whatever those vulnerable firm’s natural turnover might be, the talent market accelerates that turnover rate. The talent market is far more efficient that may be expected.

In the end, culture attracts great talent and great talent drives successful customer and client engagement.

As Christine Greybe , President of our global Leadership Consulting Practice, notes, “It is important (for leaders) to be intentional about shaping your culture, clearly communicating your fundamental beliefs, and aware of the behaviors you tolerate. Your culture will have an impact on retention, employee satisfaction and overall performance.”

In our business we are successful when we recruit the best talent for our clients and when that talent “sticks” with the client for years.

By that measure, our greatest recruiting successes emerge when our clients consciously and deliberately manage a strong, compelling culture…better, more durable, talent aligns with them.

As it will with your organization, if you place culture first.