The impact that corporate culture will have on corporate valuation is critical. Sometimes culture is the elephant in the room that no one sees or is focused on. Corporate culture is critical to the progression and growth of the organization.
The organizational leadership, belief system, and vision of the organization is critical to setting the tone for the overall organization. Starting with the overall purpose and mission is what will magnetically draw great employees to want to be part of the organization. The corporate purpose and belief system is the bridge that connects with the employees and customers. To create the greatest impact the purpose needs to emotionally connect with the employees. The ripple effect is that they will be magnetically drawn to the organization and will want to stay at the organization long term for the right reasons. The process and how a company goes about implementing this is also key to setting the tone. The experience for the employee and the customer is the realization of the vision.
A key component to positively impact the corporate culture is not just the casting of the vision and purpose of the organization but the leadership leading by example. The motivated employees will become Raving Fans that can’t resist telling others about the organization they are part of. What if all employees at every level was a profitable and productive revenue generator for the organization to all that they come into contact with. When storms come up these raving fans internally will work harder with a great attitude to help the organization weather whatever the storm may be. The emotional connection between the employee and the organizational belief systems will create fire and drive. In essence steam that can power a large train will be created, the 212 degree effect. Its that extra degree that will power the organization to reach goals that originally, may not have been possible. Thus, the culture being magnetic and sticky will also be scaleable and sustainable as long as the leadership maintains or betters this positively charged culture.
Whether the organization is preparing to sell or not, when an organization is producing positive steam culturally paired with positive financial results, the value of the organization is worth far more than one that doesn’t have this type of environment. The positive measurable benefits will be threefold. 1. Increased Referrals 2. Increased Revenue per Customer 3. Increased Advisory Status with the customer.
The Impact – Short Term & Long Term
The measurable ROI will be greater as a result of the positive and magnetic corporate culture. Future employees and customers will be magnetically drawn to the organization. Thus providing a continuous pipeline of ideal customers. The organizations critical indicators will be able to validate this by the increase in overall revenue. A great example of an organization that works diligently to always have a great culture is Google. They go above and beyond to create an environment that enables their employees to continually innovate. Obviously the valuation of Google has done quite well and appear to continue for some time.
The Bottom Line
The bottom line is that the leadership that sets the tone for a positive and innovative culture will reap the benefits of a very valuable and magnetic organization.