The Most Beneficial Ingredient for Innovation, Stakeholder Relationships, and Investments
Artificial Intelligence, climate, risk, and sustainability. If you’re a corporate leader - manager, individual contributor, senior executive, or board member- these are all topics you’re likely to consider as part of your mid-year business strategy review.
In executing mid-year plans, remember the one thing that undergirds those business themes - corporate culture. Positive corporate culture has strategic benefits for a company by supporting employee productivity, stakeholder engagement, and increasing investment capital.
Work Flexibility and Upskilling as a Foundation for Positive Corporate Culture
Work Flexibility
Employees have always valued flexible work policies, the post-COVID era just sealed in flexible work as an accessible component of a company’s culture. In making the hybrid work argument, we’ve seen statistics about how creative and productive employees are when they can set their own work locations and times. But huge hurdles still stand in the way of employees and even their managers being able to enjoy and offer hybrid work benefits. New York City is just one of many cities pushing back on remote work, given the dent it is causing in the city’s finances.
“New York City businesses are losing customers and revenue with people working remotely. The workers coming into Manhattan are spending $12.4 billion less per year than they were before the pandemic, according to a Bloomberg report citing data from Stanford University economist Nicholas Bloom’s WFH Research team.” 1
Despite the financial straits some regions are seeing, a company’s bottom line can benefit from hybrid work when you look at reductions in expenses.
Tales of the financial toll remote work has on companies and cities are headline news, but not the tangible savings associated with remote work:
Reduced utilities bills
Limited relocation expenses
Lower costs of in office tech, repairs, and furnishings
Reduced food services expenses
These cost reductions benefit the company, and are in addition to the savings employees see from decreased travel and commuting.
Upskilling
Beyond remote work policy, positive culture supports employees when focused on upskilling based on future employment trends and demand. Given the global shift into renewable energy and the circular economy, industries are arming employees with knowledge to pivot from one area to another.
Opinions abound about the strength of sectors like coal and oil & drilling. But, the evidence is clear. Growing numbers of people see steady shifts to products like electric vehicles, wind energy, and solar power.
According to a 2022 Pew Research Center Survey:
“67% say the U.S. should use a mix of fossil fuel and renewable energy sources” 2
Phasing workers into jobs that support these new sectors supports individual employee growth as well as the progress of the business into possible new markets and new products. Neither the business, nor its employees will be left behind- it’s a win for both.
Stakeholder Engagement as a Foundation for Positive Corporate Culture
Labor Unions
With workers wielding power and voicing concerns around working conditions and safety, organized labor unions continue to be an important stakeholder for businesses.
Starbucks gives a clear example. Although as of second quarter 2023 certain stores are planning to remove unions, it became clear over the last year that managing relationships with unions benefits the company’s progress.
“The unionized New York City Roastery workers went on strike for a month and a half at the end of 2022 due to hygiene and safety concerns after a bedbug infestation. They finally went back to work after coming to an agreement with corporate to get the issues fixed.” 3
Suppliers
Suppliers can either ease a business’ operations process, or be a stumbling block delaying deliveries at best, and shutting down operations at worst.
In addition to supplier reliability and pricing, businesses are wise to review their suppliers’ policies on climate, environment, human rights, and employee safety. While some countries are enacting strict directives on supplier due diligence for companies (e.g., EU’s corporate sustainability due diligence directive) it behooves companies globally to begin considering how to engage product suppliers, buildings and facilities vendors, and all companies in their value chain. The values and principles of your corporate culture should be reflected in that of your vendor to truly benefit from a positive workplace culture for all who support your productions and operations.
Communities
Communities where businesses operate are increasingly, and rightfully, being seen as important stakeholders. It’s about time! Business who build, drill, or extract on indigenous lands, without partnering with them, continue to face backlash. According to Michael Posner, Assistant Secretary of State with the Obama Administration, “but in any industry where you’re trying to get something out of the ground that’s valuable, there’s likely to be a conflict and there’s likely to be infringement on an indigenous population that’s in those places.” 4 This happens to other marginalized communities; a business may set up shop in an area bringing an outside workforce, without the slightest efforts to employ those in the neighborhood.
Business leaders looking to expand must understand the value of the land to the people who live there. Partnering with the community and putting a plan in place before expanding into an area may mitigate water shortages, biodiversity issues and other challenges that impact the livelihood of communities who rely on the land.
Investor Engagement as a Foundation for Positive Corporate Culture
Investors consider corporate culture, especially how a company manages financially material issues that impact revenue and costs, when making investment decisions. A positive culture includes measuring employee engagement. Success in this area can lead to employee well-being, and high creativity and productivity, which in turn manifests as product innovation and low costs associated with worker turnover, onboardings, and recruitment. The resulting lowered costs – and what leads to it- is what catches the eye and interest of investors. Strengthening stakeholder relationships, for example enforcing compliance while keeping open dialogue with customers may curb cybersecurity and customer data privacy issues, mitigating costly liability while supporting company reputation. A commitment to good governance, employee engagement, and stakeholder relationship building demonstrates the company as less risky and more attractive to investors. Most investors are not looking for perfection, but they do want to see business leaders and boards that have plans to make improvements in these areas, a commitment to measuring progress, and the discipline to course correct as needed.
Positive Corporate Culture Summary
Positive corporate culture benefits a firm and should be continuously measured and evaluated in each area of the organization. Employees who feel valued deliver higher performance, internal and external stakeholder engagement creates trust in the organization, and investor confidence in a company's future could lead to greater capital investment.
Sources
Kelly, Jack. “New York City Is Losing Out On $12 Billion Annually Because Of Remote Work” Forbes, February 14, 2023
Funk, Cary. Kennedy, Brian. Tyson, Alec. “Americans Largely Favor U.S. Taking Steps To Become Carbon Neutral by 2050” Pew Research, March 1, 2022
Fantozzi, Joanna. “Starbucks workers are starting to ask to leave the union” Nation’s Restaurant News, May 16, 2023
Schreane, Keesa. “Gambling on Green: Uncovering the Balance Among Revenues, Reputations, and ESG” Hoboken. John Wiley & Sons, Inc. 2023
