For many, it’s hard to understand why leaders don’t invest more in their organisation’s culture.
Many of us instinctively recognise how culture can be a silent killer or an accelerator of success.
This article aims to support anyone who faces the uphill battle of persuading senior leaders to invest greater time or money in their organisation’s culture.
But first, let’s understand their perspective…
Any leader will have dozens (if not hundreds) of priorities vying for their attention and budget.
Although most will rationally understand the importance of culture, any investments in it are often perceived as nice-to-have.
This is exacerbated by the fact that it’s difficult (but not impossible) to forecast and demonstrate the ROI of investments in culture. In this sense, we are effectively asking for leaders to invest based on good will and faith, over other initiatives that have clear evidence of financial gain.
Many leaders also doubt whether we can create any meaningful changes in culture, even if they do throw money at their cultural issues.
Given these concerns, it’s probably unsurprising that many don’t invest more. This is especially true when leaders must justify their decisions to investors or Partners.
But, there are six costs of inaction…
Although leaders are right to be sceptical, here are six conversational avenues you can explore. Use them to get senior leaders reflecting on the cost of inaction when it comes to culture:
1. Regulation changes.
Since the global financial crisis, regulators have increasingly focused on cultural requirements. For example, the UK Financial Reporting Council published the corporate governance code in 2018, outlining the Board’s duty to steward a healthy culture. This council are also increasingly voicing concerns against companies who they feel are falling short in the culture space.
Consider asking a question such as, “Have I talked you through the cultural requirements we need to hit?”
2. Investor pressures.
Most investors don’t only track short-term financial performance. They also search for evidence that the organisation is healthy in a broader sense, including its culture. This information is often publicly available (e.g., via Glassdoor) and can shape perceptions and decisions.
Consider asking a question such as, “How are our cultural challenges shaping our investors’ decisions?”
3. Talent attraction.
Leaders conceptually understand that external perceptions of the organisation’s culture influence people’s decision to apply and join. Yet, real examples of where this is happening translate this conceptual challenge into a real business issue. Use direct quotations from Glassdoor and anonymous candidate surveys to create a conversation starter with leaders. Even better if you can share the additional hiring costs, in internal time and external recruiters.
Consider asking a question such as, “Have I shown you what’s being said on Glassdoor/in exit interviews/in interviewees who turned us down?”
4. Talent engagement and retention.
Again, most leaders rationally understand how culture impacts how people feel at work. It’s powerful to mine engagement survey and exit interview results for emotive quotations that underscore how the culture has influenced people’s engagement and choices to leave. Even better if you can cite the financial impact of this. For example, Gallup estimated that disengaged colleagues cost businesses 34% of their salary annually. 
Consider asking a question such as, “Have I talked you through the hiring costs this year yet?”
No senior leader wants to see their organisation fall behind the competition. Consider researching the investments and initiatives made in culture by competitors and use that to start the conversation. If your organisation is looking like the outlier, that can be powerful data that influences senior leader decisions.
Consider asking a question such as, “Have you heard what <Competitor Name> have done?”
6. Competitive advantage in the new world of work.
We see AI increasing in popularity, not least through the widespread use of tools like ChatGPT. Repetitive, simple tasks will eventually be conducted by AI and machines. This makes the ‘soft’, cultural parts of a business increasingly important since they cannot be replicated by AI.
Consider asking a question such as, “Have we considered how AI will impact the importance of our culture?”
Which conversation starter will work for you?
Each reason will carry different weight across leaders and organisations.
Our hope is that you can use at least one to prompt leaders to invest in culture, if that is indeed the right thing to do.
If helpful, pause and ask yourself:
- Who is the leader that you need to influence?
- Which of these six reasons are most likely to grab the attention of this leader?
- How do you present your case in a compelling fashion?
If you would like support communicating the business value of investments in culture, please do get in touch.
 Gallup (2013). State of the global workplace. Retrieved from: https://www.gallup.com/services/178517/state-global-workplace.aspx
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