— January 24, 2018
A healthy culture is crucial to a successful business, as it influences everything from your customer service to your employee interactions in the break room. (If you’ve worked at a company with a toxic culture, you know how soul-crushing it can be.)
Cultivating a strong culture should always be priority, and that doesn’t just mean more ping pong tables and endless LaCroix. One lesser known way to do that is through something you probably already do: reporting. Good business reporting isn’t just a financial tool. It can help you transform your culture by providing true transparency.
Building a Stronger Company Culture Through Reporting
We know we all want to buy from brands that are transparent about their practices, their products, and their values. But we want to work for them, too. Employee satisfaction, engagement, and well-being are all greatly affected by how connected people feel to the company they work for—and transparency is a big piece of the puzzle.
But transparency isn’t achieved via an annual news conference or company retreat. It’s the everyday interactions and communications that make a big difference at every level. In fact, a 2013 Harvard Business Review survey found that effective communication ranked as the second most important contributor to success (just behind customer service).
The communication tools you use are the conduit for transparency, which is why reports can play a significant role. Reporting, whether internal or external, for clients or for a department, is the act of information exchange that cultivates a healthy company culture. Here’s why.
1) Reporting Connects the Dots
Reporting lets you see not just what’s happening in a specific area of your business but how it relates to a larger strategy, vision, or goal.
According to a 2013 Harvard Business Review survey, 70% of surveyed employees say they are more engaged when they “have clear understanding of how job contributes to strategy” and when “senior leadership continually updates/communicates strategy.”
You might think a KPI report on blog traffic is only relevant to the marketing team, but it might also show a designer how her blog artwork has contributed to an uptick in that traffic. When people understand why their work matters, their work matters more to them.
2) Reporting Cultivates Trust
Providing transparent reporting, whether it’s via an annual report or financial report, demonstrates integrity and vulnerability. People want to work for, stand behind, and promote a company whose values they share. But according to the American Psychological Association’s 2016 Work and Well-Being Survey, only 51% of respondents feel their values match their employer. It’s no surprise this misalignment can contribute to high turnover rates and low employee satisfaction.
That same APA study also found that 20% of respondents don’t trust their employer. Without trust, you cannot cultivate a healthy company culture. Reports can bolster or erode trust in everything from your product (e.g., crash reports) to your business practices (e.g., supply chain reports). Even if mistakes are being made or initiatives are failing, being willing to expose the good, the bad, and the ugly is crucial to maintain that trust.
We know this firsthand. At our monthly town hall meetings, our founders share year-to-date financials and answer questions about all aspects of the business. These conversations aren’t always easy, but they’re important to have out in the open.
3) Reporting Encourages Ownership and Accountability
A strong culture is one where people feel connected, engaged, and willing to grow, experiment, and even fail. Reporting encourages accountability, as employee efforts (or lack thereof) can be reflected in things like sales reports. This encourages people to take ownership of their work and their decisions, which helps people feel more confident and engaged.
It also keeps people accountable to each other. For example, we decided to adopt a profit-sharing model last year, so everyone in the company has been interested in the financials reported during our town halls. When those reports revealed our profit margin was smaller because we were going over-budget on projects, our entire production team became much more vigilant about scope creep.
4) Reporting Celebrates Success
Like all humans, acknowledging success makes us happier and more confident. When you can share a major win via a report it goes a long way for employee morale. Unfortunately, the APA study found that only 50% of respondents feel their employer values recognition. Whether you are looking to get recognition or celebrate someone else’s good work, reporting successes is a great opportunity to do so.
5) Reporting Eliminates Ego
No matter your industry, everyone has an ego. (And it’s probably worse in creative fields—we’ll admit it.) When it comes to decision-making, it’s easy for people’s feelings to get hurt. Whether you’re arguing over an email newsletter, product line, or sales tactic, it helps when you can quit arguing and look at some data. Reporting helps you extract insights that help you make a simple, objective decision—without claims of egotism or favoritism.
Remember: Put Culture First
Developing a healthy company culture isn’t an easy task. It takes effort, empathy, and effective communication skills.