With so many new variables affecting the bottom line of businesses, the true value of a company is no longer adequately measured by simply looking over financial statements. In the United States, for example, half of all business assets are now intangible. Other major economic powers like China and the UK find themselves in almost identical situations. As a result, companies are forced to adjust core elements of their organization to meet the unique demands of the 21st Century.
Understanding Intangible Assets<
Intangible assets lack a physical form, but are crucial for properly determining the value of a business. Especially in our knowledge-based economy, these intangibles often decide the fate of a company. To drive this point home, merely consider the power of a brand name. A strong brand image is arguably the most powerful asset a company possesses. Yet, it can't be touched or easily quantified. However, without name recognition many major corporations would quickly be filing for bankruptcy.
Other vital intangible assets include big data, intellectual property and company culture. The last one, in particular, is a driving force behind long-term growth and prosperity; because of this, HR departments should actively invest in and promote healthy company culture.
Work Culture and Company Manifestos
Quality work environments lead to brand loyalty, infectious employee enthusiasm, and a significant reduction in labor costs. In fact, job-seekers have been shown to prioritize work culture over big salaries and juicy bonuses.
In order to get employees invested in company culture, it's helpful to have the core values of your brand clearly outlined in a company manifesto—one that is displayed prominently and practiced by all departments (including upper management). Always remember, when managers operate within established cultural norms, employees more readily accept and partake in the culture.
Core Elements of Healthy Company Culture<
An ideal culture develops gradually as people work together and reach mutual goals. For example, the most successful companies strive to create a culture of ownership. Meaning, employees aren't simply treated like cogs in a profit-hungry machine. Instead, individuals genuinely feel like they have a stake in the company's success, regardless of their rank.
To manifest a vibrant culture, it's essential to provide all the resources required for nourishing the education and development of employees. When coupled with a transparent system of accountability, conditions quickly start becoming favorable for talented, goal-driven individuals to prosper.
Measuring Company Culture
Even the best cultures have the potential to spoil with time. Countless factors contribute to cultural decay, such as incompetent leadership, dogmatic thinking, poor communication and the inability to enforce core values. Once important elements start to breakdown, bureaucracy and ineffectiveness are sure to follow.
To prevent systematic failure, it's important to keenly be aware of your culture's health. However, like most intangible assets, culture can prove challenging to measure effectively. Although customizable surveys are cost-efficient and easy to create, the information garnered is entirely dependent on honesty. Furthermore, employees are prone to rushing through surveys without giving much thought to the questions.
In order to maximize accuracy and return-rates, surveys must be brief and timed for optimal impact. Ideally, they should contain a maximum of five questions that directly relate to an event or situation that is fresh in the minds of employees. Although having heaps of data is always nice, the best way to assess culture is by sitting down and engaging face to face with those who experience it daily. With this in mind, ensure direct lines of communication are readily available.
Conclusion
In the end, employees are people who want to feel valued and know their voices are being heard. Open communication, transparency and mutual respect go a long way in easing tension and creating group cohesion. Never forget that a people-centric culture increases profits and converts your employees into brand evangelists. Needless to say, the culture of your company is an intangible asset that cannot be ignored.
