Why Employees Are Becoming More Important Than Customers, By Masterbrand’s Almudena Clemente

“Culture eats strategy for breakfast.” Despite this famous warning from legendary management consultant, Peter Drucker, lack of employee engagement remains high today, costing employers $550 billion, every year1. And even strong data like this hasn’t convinced management to shift focus to their internal culture and away from the more external, commercial focused one.

Culture is king

But as brand builders and managers, with a constant eye on all our stakeholders, external as well as internal, we’re starting to see a shift. Or better said evolution. One of the visible examples is the Great Resignation2 that started in the U.S. in 2020 and has spread across most of Europe. It is a clear sign from employees, an internal audience, that they are not happy with their company’s brand culture. In other words, brand culture matters now more than ever.

In fact, culture is, and has always been the strategic glue that unifies companies, optimizes processes, boosts synergies and creative thinking and, eventually, makes for happier and more engaged employees, people who are proud of what they are doing at work. A culture led by the brand, as the collective conscience that ties together and pervades the entire organization. A strong brand culture is the best soil for a strong brand.

What the studies say

A lot has been written about brand and company culture since Drucker. Recent studies and reports confirm his decades old hypothesis, clearly showing the correlation between employee engagement and stronger brand performance. As supporters’ entire brand experience, they have the greatest impact on company competitiveness, success, and long-term sustainability. Engaged employees outperform in terms of efficiency, innovation and retention rates and ratios.

According to a study by Lippincot, Go to brands:

Employees at the companies with the strongest brand engagement were 28% more willing to go above and beyond in their work.
These employees tend to have longer tenures at a company with a 27% higher stated intent to remain at the company.
On the other hand, companies with low employee brand engagement, progress and enablement had 12% lower revenue growth than the median.

Research by The Academy of Strategic Management Journal4, from Covenant University in the U.S., also demonstrated how internal culture affects the external brand value perception. Their study showed that brand culture plays a significant role in influencing the perceived value of offerings to customers.

Building strong cultures and brands from the inside out

As we mentioned earlier, management is finally taking notice to how these changes are also having further consequences on business, affecting not only employee’s mindset, but also their bottom line. According to Corporate Excellence5, 42.3% of organizations today are defining more responsible leadership models, building more human organizations. They are putting their efforts into offering their employees improvements in mental well-being, diversity and inclusion, work-life balance and even giving them a positive purpose to guide their daily actions.

Because Brand Culture is the engine that makes a company work in one way or another. It is the factor that makes the existence of your brand possible. Culture determines the way we behave, relate to each other, and even establishes the beliefs by which we function. It is a vital part of the construction and management of any brand.

Main takeaways

It is as important to have a good brand positioning as it is to have a culture that allows you to achieve it. Don’t forget that the culture of your brand is the culture of your employees, and not the other way around. Also remember:

Culture is becoming a more strategic pillar for the business success and long-term stability
Business management is shifting towards a more employee-centric approach
Brand strategy will be the compass that guides and nurtures your internal culture

And now is the time to ask ourselves, are we taking enough care of our own brand culture? Is it fostering the development and success of our company? Or do we need to have a thought about what more we should do to use our culture as a strategic pillar of our business success?

Sources