Corporate culture: Tread carefully during restructuring

by HCA05 Aug 2009

Redundancies, restructuring and rebuilding are unfortunate realities continuing to be faced by businesses today. Albeit understandable that a prominent level of attention is given to employees who are leaving the organisation, due attention must also be given to the employees that remain, and their role in maintaining and building relationships with customers. Unique changes and transitions within the business landscape face us daily. These realities make finding the answers to two key questions more imperative for business success today than ever before:

  1. Would you recommend our brand, product or service to a friend or colleague?
  2. Would you recommend working for this company to a friend or colleague?

The crux of the challenge for business leaders is establishing a tangible connection between the degree of customer loyalty on an external level, and the degree of employee engagement on an internal level. Now more than ever brand loyalty from both customers and employees is critical. In a time when a majority of businesses are reducing their workforces, maintaining deliverable value and internal standards of quality and satisfaction are instrumental in shaping and delivering on revised business strategies.

There is mounting quantitative evidence that the link between employee engagement and customer loyalty is significant. For example, Fortune 100 clients report "there was a 1,000% increase in errors among disengaged versus engaged employee populations; and 75% of high-performing companies hold managers accountable for engaging their employees". Businesses can no longer create and disseminate messages in a vacuum and expect to maintain strong reputations and relationships with their employees or clients. But what can senior managers do to regain some of this lost control to rebuild ailing relationships that will come to par following the increasing numbers of redundancies and loss of 'loyal' clients across the industry?

The answer lies in the ability to quantify two key business drivers - customer loyalty and employee engagement; and then to shape the strategies and culture based upon this data. Talent management and leadership have taken on renewed importance as competition to attract and retain high performing loyal employees becomes increasingly fierce. Thus, the employee experience becomes just as important as the customer's. As the competitive playing field has levelled in that every company has access to the same technology, companies have begun to realise that differentiation is related to their ability to attract and retain quality human capital.

Whilst companies are reducing, restructuring and rebuilding their workforces and organisations, it is imperative that they partner with experienced advisors who sit outside the organisation to provide a learned perspective on their sourcing, assessment and development needs. Optimisation of human capital is virtually every company's goal with the price being a level of discretionary effort that results in loyal employees and customers. Delivering superior customer experiences boils down to making an extra effort internally, one that is consistently better than the competition. The employee experience is based on a 360-degree outlook: culture, values, beliefs, flexibility and balance are integral to the decision to become an employee. Then, desires, expectations, growth, development and participation contribute to the overall contentment in a position.

However, there is more to it than just the individual employee's perspective. The workplace, environment, leadership and brand all interact to shape the corporate culture. Finally, compensation, benefits, recognition and promotions determine the employee's decision to stay with a particular company, or to look for a better opportunity. Research confirms that these 'bread and butter' issues are seldom what drive commitment or discretional effort. It is the less tangible dimensions of employee engagement that virtually all companies are after, but few recognise or understand how to achieve it.

The companies with the greatest reputations have rigorous employee sourcing, assessment and development programs that set the organisation up to cope with, for example, change both internally and externally - especially in the context of economic stress or high risk situations - and ensures an overarching practice of delivering on a positive reputation in all that the company does.

Reputation, from a simplistic perspective, requires a focus on the talent that remains in the organisation during a restructure, the attraction of experienced and suitably qualified talent and robust development and retention strategies to build employee loyalty, and, in the end, customer attraction and loyalty. Albeit the attention for today is on minimising costs to survive, leaders also need to look to the future and ensure their workforce is prepared for the next economic chapter.

About the author

Craig McCallum is general manager for marketing: specialist recruitment & consulting services at Chandler Macleod Group. For more information phone: 02 9269 8879 or email: craig.mccallum@chandlermacleod.com

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