3 Ways a Strong Culture Impacts Your Bottom Line
Even though culture has been a prevalent word in the business world for some time now thanks to Starbucks, Zappos, Southwest Airlines, and other leading companies, many executives still don’t see its importance when stacked up against the balance sheet. They see culture as a “fuzzy feeling” and intangible part of their businesses, meaning it often gets overlooked.
The costs of this oversight is quite scary through member and employee attrition, lack of primary financial institution relationships, and negative growth. On the flip side, if a company invests in its culture and makes it a primary driver of the business, the results outpace competition and uniquely set it up for sustainable success in the future.
Culture has a direct relationship to your bottom line because it is the foundation of your business. As a credit union, your business is not checking accounts and loans – it is who you employ, who you serve, and how you serve both of those groups of people. Your culture is what you believe as an organization and how it is carried out in everything that you do.
Here’s how it impacts your bottom line:
I LOVE credit unions! But many take the philosophy of “trying to be nice” to the extreme, which comes at a huge detriment to member service (and success). We often hire the wrong people, put them into the wrong positions and, the scariest of all, let them continually make costly service mistakes that impact members rather than acknowledging these people are the wrong fit and taking appropriate action.
Your employees should be an asset to your company – not a liability.
“If you hire people just because they can do a job, they’ll work for your money. But if you hire people who believe what you believe, they’ll work for you with blood and sweat and tears.” –Simon Sinek
Culture starts with your employees. Hire great people, treat them well, engage them and they will go from clock punchers to cheerleaders and avid supporters of your credit union. From a business perspective, this means more members, more products per member, higher loans-to-shares, and increased profitability.
The financial impact of a great culture where your members are involved is invaluable. Just like great press is the best free marketing, a strong culture creates brand ambassadors among your members and makes them so inspired and excited about your credit union that they do the marketing for you.
From another perspective, a great culture also lets members know what you believe, which is much more valuable than telling them about your products and services because it aligns them with your credit union. If your credit union serves members who deeply believe in your organization, it will show in the number of members who use your credit union as their primary financial institution. It will also show up in certain key metrics, like products per member, return on assets, and other drivers of the bottom line.
When I worked for a $50 million credit union, we spent several years changing from the inside out by focusing on our culture. The end result of this work was members literally coming in and joining because they had seen our culture in action with everything that we did. From internal efforts to make coming to work a more enjoyable experience to showcasing our culture at community events, it bled through. People want to be a part of something successful.
True believers work hard to help others see what they see and make true believers out of them as well. But it takes consistency. In my case, at our credit union, the greatest benefits were seen three years later! It takes a team focus on this long-time commitment, and on the other side, the value is priceless.
Building a strong culture is a long road requiring deliberate and consistent action, as is anything worth doing. But make a concerted focused effort on developing culture – on creating cheerleaders who create advocates who create true believers – and the result will be a strong, sound, growing organization.
This article originally posted at CUInsight on September 12, 2016.