CONNECTING CULTURE TO PROFIT
BY ROSE KELLY
Where is culture taking your business?
Culture and how to create it is becoming the HOT topic in Real Estate circles of late. A great culture sets the scene for managers to fully engage their people and connect their efforts to profit.
Engaged teams are more productive and hence more profitable…sounds simple but many fail to identify the links and make them work. When we talk about high performing cultures, we hear about things like… recognition and feedback, rewards, passion, energy, team relationships, communication, fun, flexibility and celebrations. These are all stimulants to an engaging and high performing culture, but great culture on its own is not enough.
Culture is an important step in creating the right environment for success but that is essentially what it is. A business with a positive culture will have put in place the mechanisms, the frameworks, the events and the processes to stimulate and support a high performing workforce, but it is the implementation that follows which is equally important.
We all have a view of business success. Many would argue that money is not their driver, however profitability is certainly a universally accepted metric for that success. Profitability in a real estate business is a challenge for many business owners. However, the challenge gets easier when we break it down.
Of the hundreds and hundreds of businesses I have looked at, there is one common feature in their profit and loss. It is the significance of the spending on staff. Whether sales or property management, the percentage of revenue which is attributed to the people part of the business is significant and consuming on the profit and loss statement.
It stands to reason then that if we could improve the output for the investment in people we would be improving our profit levels. What we are talking about here is how to link people to profit and how to bridge the gap between culture and output. I have simplified this into a 4 step process with each step being measurable and therefore manageable.
It goes like this…
Culture, engagement, productivity, profit.
Think about those 4 words…
Culture – we know there are stimulants to good culture but how do you actually execute it? Firstly, the value of good conversations. Open, engaging and honest conversations which really go the level required to stimulate change are the key to trusting relationships. Trusting relationships underpin good culture.
Engagement – some of you will have seen my previous video /article on this but essentially it is the level of connection our team members have with the business purpose, mission and outcomes… how switched on they are when the come to work. Don’t be mistaken in calculating this. Less than 14% of the population are actively engaged in the Australian Workplace, which means that less than 14% are prepared to extend themselves for the sake of the company, and to provide what is considered discretionary effort. Engagement is essentially the responsibility of the Leader / Manager. Employees show up engaged at the start, but it can quickly wane without the right conditions.
Productivity – the level of output they create – this is about a whole range of things from staff roles and responsibilities, to efficient and agile processes to maximising the use of technology and automation. Obviously highly engaged staff give you the best chance to maximise productivity. They are inherently prepared to give that bit more. However, most businesses (particularly Property Management businesses) are bogged down by REWORK – inefficient systems, errors, losses, duplication, poor use of technology and the list goes on.
I trust you can see where I am going…
A great culture sets the scene for managers to fully engage their people. Engaged teams are more productive. Higher productivity results in less staff costs per unit of production (sale or management) ie higher profit.
I encourage you to adopt this model in reviewing and maximising your bottom line. However, you measure success in your business, it is a whole lot easier when you are making the profit you want and expect.