Addressing Revenue Loss Through Culture & Communication
Countless factors contribute to revenue loss. In 2020 alone, 81 percent of U.S. businesses lost revenue because of the COVID-19 pandemic. Industry trends, supply chain issues, and other external factors can all contribute to revenue loss.
However, there are times when this downturn is a result of something happening internally, like communication and culture. This culture and “people-side” of revenue loss is often overlooked, yet is just as often a factor at play.
In December 2019, the software and app development company Slingshot decided to bring culture to the forefront. They decided that communication, internal and external, decision-making, and content would all revolve around who the team is and what they do.
This lead to a seemingly insignificant change. David Galownia, CEO of Slingshot, says: “Taking a look at that led us to call ourselves Big Kids and Daredevils: a group of creative fun-loving people who like projects that are exciting and engaging.”
The company had seen an average growth of 10 percent annually since operations began in 2005. However, after implementing all the elements of their ‘culture reset’ in February of 2020, they’ve seen nearly a 50 percent growth increase.
Your first instinct may be to look at the more “practical” or obvious areas of the business to address revenue loss. In doing that, you overlook the internal issues at play. Breathe profit and success back into your business by taking a look at culture and communication.
How Culture and Communication Can Lead to Revenue Loss
Every company has its own internal challenges. Stressful deadlines, toxic work cultures, and remote work adjustments have all plagued organizations in recent years. As a result of COVID, company culture and communication is becoming even more challenging.
In fact, a 2021 PwC survey found that few leaders think culture can survive in a purely remote environment, with only 5 percent agreeing that you don’t need to be in an office to maintain company culture.
Even more challenging, there’s no global cause for revenue loss. Ultimately, a combination of issues is what leads to a lack of productivity, engagement, and overall loyalty to the company, which in turn translates to that loss of dollars and cents.
McKinsey looked at more than 1,000 organizations employing more than three million individuals and found that those with “top quartile cultures,” as measured by their Organizational Health Index, post a 60 percent higher return to shareholders than companies with “median quartile cultures” and 200 percent higher than those in the bottom quartile.
How to Identify and Prioritize Issues
There is rarely one single issue surrounding communication and company culture that leads to revenue loss. More often than not, it’s a mix of problems that have developed over time that lead to a discontented organization and toxic culture. Some of the common communication and culture issues related to revenue loss include:
An unclear vision or constantly changing priorities
Fear or anxiety about the organization’s future
Loss of respect for leaders
Employee burnout
Rampant workplace gossip
Issues with internal politics like unearned promotions, conflicts between teams, and personal problems with managers
Leaders navigating new virtual leadership challenges
Lack of recognition and genuine care by the management
For Bryce Welker, CEO of CPA Exam Guy, the issue was a lack of feedback—people in the company were not sharing their ideas or speaking out against Welker in meetings, even if their knowledge trumped his.
While Welker had been careful about the talent he brought on, their numbers didn't change much in the first 6 months. When he realized no one was speaking up, he decided to make a cultural change.
“I resolved to let everyone know that I wanted this company to be a place where people could feel free to voice different views and opinions, even and perhaps especially when they were different from my own. What I wanted to create was a culture of constructive criticism and argument so we were constantly refining ideas and approaches.”
The result? The company has seen a 100 percent revenue growth over the last year, which Welker firmly believes comes down to the cultural shift.
While Welker was able to recognize this issue, internal issues can be challenging to identify and prioritize with internal resources alone. It’s hard to see the real issues at play when you are entrenched in them.
That’s why it’s important to bring in an objective third party, such as an executive coach or consultant. This person can bring an objective perspective and be a confidential source for strategizing and receiving support when the changes decided upon become challenging.
While this support will be necessary, it’s not a magic wand. The process of shifting from toxic or non-existent company culture to one where communication, engagement, and productivity are at an all-time high will take time.
How to Make Meaningful Cultural Change
The shift to a stronger company culture with better communication will look different for every organization. However, there are some key factors that can help you begin moving in the right direction and keep revenue loss at bay. Here are a few strategies to consider:
Create a culture that people can’t imagine leaving. This lowers your turnover costs while inspiring people to work harder to achieve the company’s goals.
Strive to create aligned messaging. This prevents confusion related to employee priorities and allows everyone to work toward the same goal.
Develop programs tied to the individual employee contribution. Employ gratitude and recognition to boost motivation. This might look like sharing positive words or providing mentoring opportunities, or awarding gifts to employees who are most successful.
Reconsider your leadership style and the executive presence you embody. Everything you do sends a message, not just the words you choose. Take an active approach to identify how you are perceived in your organization through a confidential 360 review so you can identify key areas for growth.
Invest in leadership development. You’re likely not the only one who needs to shift their leadership style. It may be a cliche that employees leave managers, not companies, but it’s true. “Poor relationships with managers and coworkers,” was a commonly reported reason for leaving a job in iHire’s 2020 talent trends report. High turnover can lead to revenue loss when gone unchecked, and that can stem from the culture your managers are creating and their lack of communication. Investing in regular leadership development company-wide is a simple strategy to start addressing the root issue.
Revenue Loss Often Starts Internally
While your employees can drive your business forward, it’s up to you as the organization’s leader to develop the culture and communication that will keep them engaged, motivated, and loyal to the company.
If you and your managers are stoking uncertainty and creating a stressful culture, then your employees will respond in kind. Focus instead on maintaining a clear vision, creating a culture that employees love being part of, and investing in developing your leadership team to address revenue loss.
ABOUT LEADERSHIP IMPACT STRATEGIES
LIS builds proven leadership and team programs for discerning mid-market organizations who value building a collaborative, innovative culture and increasing company value by investing in their people. (‘Side effects’ of this approach include increased revenue growth, higher employee engagement, greater production and problem-solving, effective teams and reduced turnover rates.)
Our approach focuses on building deep-seated leadership capabilities within leaders, equipping them with the necessary knowledge and practical insights to lead in the future of work. To do this, we address both critical team leadership strategies as well as the building blocks of self-leadership to strengthen personal effectiveness.
Programs include Leadership Fundamentals, Leading Effective Teams, emerging leader programs, virtual leadership training, executive coaching, consulting and custom-built programs. Using data, we consistently measure the metrics of our programs to ensure both immediate training results and identify a path for sustainable growth after the training event.
LIS and our team of highly experienced coaches and facilitators remain committed to building and delivering innovative, results-driven programs that continue to drive positive change.
Information: https://www.leadershipimpactstrategies.com/