The Impact of Culture and Engagement on An Organization

By Ajay Kulkarni

Updated Over a Week Ago

Minute Read

Enjoy our blog? Consider buying us a coffee!.☕️

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

We have innumerable examples of organizations that 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 the 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 four possible 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 that have fallen into 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 into Doom’s Day syndrome before being marginalized by the marketplace.

The diagnostics mentioned in this quadrant are a few hints that 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 “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 engaged with this organization.

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

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

Scenario 3 – Encouraging Culture and Low Engagement

I would call this scenario a “Positive Stroke.” This happens when an organization that demonstrates encouraging culture can really turn around low engagement within and outside by propagating cultural elements to its advantage. On the flip side, if the cultural 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 to 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.

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

Then, there is a large number of organizations that are either in The Trap or Positive Stroke situations. They form about 60% to 70% in numbers. The bulk of them sincerely makes an effort to improve areas of concern to move into an ideal state.

There are about 20 % to 30% of organizations that are role models, and we call them successful enterprises in the 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 the bloodstream 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 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 are 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 result of any effort or action. I agree, but 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 yourself constantly.

Culture is like 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 an 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 undertook 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 the 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 were the best-performing units.

Based on the initial study and diagnostics, we could bucket various subunits in these quadrants and prepare 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 the 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 Do Culture and Engagement Impact Your Organization?

If you have ideas that you feel like sharing that might be helpful to readers, share them in the comments section below. Thanks!

Would you like to contribute a post?

Ajay Kulkarni
Ajay Kulkarni
Ajay is a HR Strategist & Talent Analyst.
{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

Learn How Top Leaders Get Results... With Methods Proven Effective By Over 30,000 Leaders!