Organizational culture is a complex and nebulous topic for management exponents and practitioners. However, culture plays a vital role for an organization’s sustenance and growth.

We have innumerable examples of organizations which have successfully grown because of apt culture being expounded. And it has been a critical constituent of their DNA.

Culture defines mood and enthusiasm within an organization, which has a direct impact on overall engagement of employees and its customers.

Culture cascades an onus of that apt culture creation. And propagation rests with leaders driving the organization.

If we look at a two dimensional approach factoring in culture and engagement, one can come up with possible four scenarios as illustrated below:

Scenario 1 – Discouraging Culture and Low Engagement

I call this “Doom’s Day”. If any organization falls in this quadrant, it is unlikely that it will survive in the competitive world. We have witnessed innumerable companies who have fallen in this trap and vanished in thin air. It wouldn’t be prudent to just measure success in monetary terms and revenue growth alone.

Companies crunching great numbers but failing in coherent culture and higher engagement have moved in to Doom’s Day syndrome before being marginalized by the marketplace.

The diagnostics mentioned in this quadrant are a few hints which any organization can take cognizance of, and seek immediate measures to move away from this situation if it wants to pursue a path of progress.

Scenario 2 – Discouraging Culture and High Engagement

I would name this as “The Trap”. To my mind, this is an interesting scenario. In spite of witnessing discouraging culture, there are high engagement levels. There is something solidly going right which keeps employees and customers being engaged with this organization.

That could be because of good products and services, early advantage of innovation, or high involvement of employees in their work engagement.

However, there is a caution as it has a danger to fall in to scenario 1 if quick measures are not taken to address culture challenges. The upside is that if the focus is on creating encouraging culture, it has a potential to move in to The Bliss, which every organization aspires to be in.

Scenario 3 – Encouraging Culture and Low Engagement

I would call this scenario as “Positive Stroke”. This happens when an organization which demonstrates encouraging culture can really turnaround low engagement within and outside by propagating culture element to its advantage. On the flip side, if culture element is eroding fast, the organization can get trapped into Doom’s Day syndrome.

Encouraging culture has robust intent of being genuine in its approach. It can identify pain points and tweak the practices which will help improve engagement levels.

Encouraging culture and enhanced engagement levels will open the doors of being blissful! Who doesn’t want to be in that state?

Scenario 4 – Encouraging Culture and High Engagement

This scenario is certainly “The Bliss”. Organizations which are in this scenario certainly should be proud of being in this state. This is the most difficult scenario to be in as it has its own challenge to sustain and proliferate.

The whole eco-system looks and aspires to be like them, and if they falter in either culture or engagement or both, organizations pay the heavy price to rebuild or regain their position.

If any organization is in this state, it becomes the trendsetter and future ready for a foreseeable period. We have quite a few solid examples of such organizations which are aspirational to most of us to be in.

A rough guesstimate hints at about 10% to 15% of the organizations are in the Doom’s Day syndrome at any given point of time. They barely survive for some time and make genuine efforts to improve culture and engagement or simply vanish from the market.

Then, there are large number of organizations which are either in The Trap or Positive Stroke situations. They form about 60% to 70% in numbers. The bulk of them sincerely make an effort to improve area of concerns to move into an ideal state.

There are about 20 % to 30% organizations which are role models and we call them successful enterprises in true sense. Wait a minute, this sounds familiar to our ears as business leaders! Yes, this is in fact like the  (un) popular Bell Curve theory indeed.

Defining Culture and Engagement

How do we define Culture and Engagement? How do they impact organizational existence and growth? What are the critical elements of both? And finally, why are only these two dimensions considered?

Well, let me start by defining culture and engagement as I understand.

Culture is like a blood stream of our body. It creates, sustains and enhances the organization’s health. It is all pervasive and evenly distributed. It provides energy and nourishment to every element of the organization. Its vitality is the very purpose of an existence. Organizational values, ethics and belief systems go into making a culture.

Engagement is like the food we relish. Are we not loyal to our favorite food? Most certainly. It creates interest, spreads happiness, and promotes enthusiasm. It is said that if organizational leaders focus on creating an apt culture, employees and customers will ensure great engagement.

If the leaders focus on culture, the business’ growth and success is a near guarantee. This is true in all conditions, be it professional, social, or personal environments and situations.

That is why culture and engagement go hand in hand. In my view, these two elements drive the very purpose of human existence and progress.

All other factors revolve around these two elements. Some may argue that engagement is a resultant of any effort or action. I agree, only if we want to consider engagement as an outcome alone.

However, engagement is a journey and not a destination in itself. Engagement is dynamic and changes every minute. It allows you to course correct constantly.

Culture is like a software and programmable. It is binary in nature. Either you have it or don’t. Each habit or belief is like different codes being written in organizational context.

Writing good code is an art coupled with logic. Good code makes a great program, benefiting all stakeholders. Similarly, imbibing good culture is vital for organizational progress.

The Impact

In one of my previous organizations, my team and I had undertaken a study to check and gauge the impact of culture and employee engagement on customer retention. This study was conducted at the front facing business function which has a direct influence on customer buying behavior and company’s revenue growth.

It was like a “rubber meets the road” scenario. Measuring culture and engagement levels in that business unit was a true testimony of this topic.

We did notice that where there was low engagement and unfavorable culture in a sub unit, performance was extremely poor. Similarly, units with high engagement and favorable culture, they were the best performing units.

Based on initial study and diagnostics, we could bucket various sub units in these quadrants and prepared a blueprint for action planning.

With a concerted effort and involvement of all internal stakeholders, we could see great improvement in low performing units and the high performing units surpassed and set new benchmarks in business excellence.

The whole business life cycle curve shifted to right and created a new cycle of excellence itself.

A Leader’s Focus

In a nutshell, every leader needs to focus on creating and nurturing a positive culture which will result in higher engagement and organizational growth.

In the fierce market scenario, we have little choice not to focus on this. It is the real differentiation for long-term success and growth!

How Does Culture and Engagement Impact Your Organization?

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Ajay Kulkarni
Ajay is a HR Strategist & Talent Analyst.