How Team Culture Secretly Drives Your KPIs

​Quick question: what makes a good team? That’s the question that every type of organization, from businesses to nations, has been grappling with for millennia. Naturally, there’s no single answer. Some teams have focused on performance, technical skill, and honing expert knowledge. But no matter the level of excellence achieved, many of these organizations have still failed.

​However, one factor comes to the forefront again and again. It’s what drives everyone from employees and elite athletes to teachers and managers to go the extra mile, achieve their goals, and show up the next day ready to do it again. What is it? Team culture.

What is Team Culture?

Most definitions of team culture are vague statements that conjure a general sense of positivity. They say things like, ‘team culture refers to the shared values, norms, attitudes, and beliefs that shape the collective identity of individuals within a team.’ That’s not very helpful, is it?
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Let’s cut the abstractions and jargon and put it simply. Team culture is the way people treat each other at work, what people think and feel about their work, and how they perform their work. Team culture is to a business as a cyclist is to a bike; you can have the best setup tuned to perfection, but without anyone to give it power and direction, it’s not going anywhere.

What ISN’T Team Culture?

Perks aren’t culture. Perks might determine what employees encounter when they show up to work, but culture influences the way people feel and how they act when they show up to work.
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Perks often get confused with team culture because for decades, growth-driven businesses failed to devote resources to anything that wasn’t obviously driving results. But then these businesses full of high-performing professionals started noticing that their teams were burning out. When these businesses finally came to the realization that the pressure was actually holding their teams back, their knee-jerk reaction was to make employees more relaxed and comfortable at work.

Soon, the world saw a wave of corporate game rooms, slides, and nap-pods flood across their LinkedIn feeds and the pages of business journals. But these perks missed the mark, and the ping-pong tables went unused. Why? Because the perks didn’t actually change the way teams communicated, gave feedback, or collaborated. They didn’t change the culture.

Here’s How Building a Team Culture Impacts the Bottom Line

Team culture is largely invisible, but its impact isn’t. Team culture has direct and measurable impacts on organizations.

1. Healthy Team Cultures Make Businesses More Profitable

According to a report from McKinsey, organizations with a strong culture are more profitable. The businesses with the best team cultures are delivering 60% more profits to their shareholders than businesses with average team cultures, and 200% more than those with the worst cultures.
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Additionally, team culture engages employees, and that’s one of the most valuable things a business can do. How valuable? Engaged teams can see a nearly 20% increase in productivity, while teams with disengaged employees can damage productivity by as much as 40%. ​

2. A Healthy Team Culture Makes Your Business Adaptable

Change can be a challenge, but healthy team cultures can adapt and work through it. A team culture built on healthy and efficient communication, shared goals, trust, and genuine buy-in can shift directions faster than a team culture that’s fragmented.
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When a healthy team culture exists in an organization, employees feel comfortable and empowered to share their thoughts and concerns openly. When a team has that level of trust and confidence in their colleagues, it allows them to share information rapidly, accelerating the rate at which they adapt. 

3. Team Culture Helps Your Business Retain Talent

Losing key employees hurts your bottom line big time. According to SHRM, the cost of replacing a talented colleague can be three to four times their annual salary. That means that in industries with stiff competition, a healthy team culture can ultimately be the key differentiator that gives your business an advantage.

If you want to avoid an uncomfortable conversation about recruitment costs in your next quarterly budget meeting, focus on engaging your teams. When your team culture is engaging and healthy, employees are almost 90% less likely to leave.

How to Build a Team Culture

Building team culture isn’t a one-time thing. In fact, it’s never finished. But that doesn’t mean building a team culture is a Sisyphean task; rather, think of team culture like an organism. You need to take the time to raise it, and you need to care for it throughout its life.
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If you’re an HR pro or a People Manager struggling to build or maintain a healthy team culture, know that you’re not alone. As remote work becomes increasingly common and employee expectations continue to change, trying to keep a pulse on the numerous factors that impact team culture and engagement is only getting harder. We’re here to help.

Lauber Business Partner’s consulting on employee engagement can help businesses like yours identify roadblocks and develop a strategy for moving past them. If you’re ready to make work better, get in touch with Lauber Business Partners today.

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