The traditional focus on the bottom line and cost-cutting wasn’t working before this pandemic, and Covid-19 has only shone a harsher spotlight on the inequalities of our country

01 SEPTEMBER 2020 – 10:00 IAN FUHR*

SA companies are battling the Covid-19 storm, using cost-cutting tactics that include retrenchments, short weeks and reduced salaries.

Here’s the biggest problem with these survival tactics: the traditional focus on the bottom line and cost-cutting wasn’t working before this pandemic, and Covid-19 has only shone a harsher spotlight on the inequalities of our country.

If we continue going down this path, it will be a race to the bottom. Cutting costs may help businesses survive in the short term, but the long-term impact of SA’s high unemployment rate is that the customer base for these companies will be eroded and lead to widespread unrest.

Instead of focusing on the bottom line, businesses can make a real difference to our economy and society if our corporate leaders embrace “cultureneering”. What this means is they need to focus on building a strong culture first and foremost in a company. This creates an adaptable business able to deliver exceptional customer service.

First, you need to look after your staff. A customer’s experience will never be better than the experience of the employee: you cannot expect people to look after their customers if they don’t have a sense of belonging or feel cared for themselves.

Get this right, and you’re not going to need to cut people’s salaries or jobs.

Culture-focused versus fixating on the bottom line

Practically, how does this approach differ from a traditional one?

First, a bottom-line focus puts profits before people. Culture-focused businesses, on the other hand, always put people before profits.

When you focus on profits alone, people are seen as a “cost burden”, rather than a value-adding asset. As you can imagine, people who think of themselves as merely expenses on the income statement don’t feel inspired to achieve the goals of the company – they see themselves as not very different to any other overhead that can be slashed.

In reality, culture doesn’t just help the bottom line; it is the bottom line.

In the alternative scenario, when employees don’t have a reason to believe in the leadership and purpose of the company, commitment, loyalty and customer service will slip.

Everyone has been through an incredibly stressful few months, and we’re not out of the woods yet. But if you really want to build a business that can navigate this storm, a good starting point is to remind everyone why they come to work – if it’s just for a salary, that’s not enough. People need a purpose: they come to work to serve the needs of their customers, and if they do that well, the money will follow. Service should always come before reward.

Culture-driven leaders

Culture-driven leaders are those who’ve earned the moral authority to lead. They know how to create a strong culture of service in a diverse and sometimes polarised workforce.

From a leadership perspective, there are a number of things that you can do to earn that moral authority. First, show genuine concern for the wellbeing of everyone in your organisation, their development and growth. You must create a place of safety where people can speak up without fear of retaliation if they have any problems or grievances.

In particular, work hard on the diversity of the company to reduce the odds of polarisation. Good race relations and diversity are an important part of the culture.

Culture always begins with purpose – the reason for being. Everyone in the organisation, starting from the top, needs to be clear why the company exists, and why they go to work every day.

The answers to these questions should always begin and end with the customer – purpose can never be about money, since money is the result of achieving your purpose. Everyone should be aligned with your purpose, which is the guiding light for every decision made.

The job of the leadership team is to instil that purpose through your core values. Of course, you can’t just state your values and then not live by them. If you are not consistent, you will not win the respect of your people. If you say one thing and do another, you won’t earn the moral authority to lead and your people won’t follow.

Right now, people are looking for stability and reasons to believe. The culture and the consistent message you share will provide a sense of common purpose. The key is to link what they do on a day-to-day basis to a larger purpose.

I hope that Covid will bring us to the beginning of the next world, where business takes on a more human face. Leaders have a financial and moral obligation to uplift the people of SA. A narrow focus on profit won’t achieve that, but a culture that puts people first can.

*Fuhr is founder of The Hatch Institute, a personal and business coaching company

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