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How Does Your Company Culture Affect Profits?

Every manager and entrepreneur wants to find the best ways to keep expenses low while running a business.

Author:Darren Mcpherson
Reviewer:Daniel James
May 29, 2023
Every manager and entrepreneur wants to find the best ways to keep expenses lowwhile running a business. They should understand that profitability is essential for maintaining business momentum and helping your enterprise reach the next level. But profitability is not just about exceptional marketing, great products, and hiring the best employees (although it does help). Instead, you need to look at your company culture and how this can affect profits.
The company culture is a vital element of any successful business and more business owners have recognized why it is so important. If you want to give your business the best chance of success and an opportunity to evolve, consider the impact of a toxic workplace and how a better company culture can improve your profits.

Dangers of A Toxic Workplace


Whether you’re running a business or working as part of a team, absenteeism and presenteeism can hugely damage the company culture. This is usually caused by a toxic work environment where employees do not care enough to show up, or if they do, they operate at the bare minimum. Such issues occur because employees do not feel respected by management or they are written up and embarrassed for making a mistake, which causes untold stress, and they would much rather not do anything at all than risk being targeted by management or even office cliques.

My Way Or The Highway Leadership

Management is a skill that not everyone possesses, and even those with decent management skills are rarely perfect. However, while many managers will do their best and try to listen to employees to get other perspectives, other managers prefer to take a My Way or the Highway approach. Here, they are unwilling to listen to anyone else, and they may even dismiss any suggestion from others no matter how good or effective it could be. Their pride gets in the way of their judgment, and this can create an environment where no one feels their ideas are good enough to share.

Lack of Enthusiasm

Absenteeism, presenteeism, and the Highway approach can lead to a lack of enthusiasm throughout the company. Although employees do not need to love everything about their job (and few people actually do), they should still feel enthusiastic about some elements. This could include taking on projects, experimenting with new technology, or seeing coworkers. However, a toxic environment sucks the joy out of everything and makes it impossible to feel passionate about anything.

Increased Turnover

Many workplace issues contribute to increased turnover, which causes a wide range of problems for the business, coworkers, and management. Few employees can come into the business and hit the ground running. They need training, and the company needs to take time for interviews which can be a costly experience and the opposite of boosting profitability. Furthermore, increased turnover affects the synergy of the workplace and makes it difficult to build connections between coworkers. If this continues, the workplace becomes disjointed, and the culture could continue to change even more.

Poor Communication

There is a right way and a wrong way to speak to employees and coworkers, and you can likely guess which is the wrong way. An unprofessional approach to communication can involve multiple factors, including condescending speech or raising your voice, especially in front of other employees. Additionally, a lack of communication while still expecting the results you (as a manager) envisioned will cause problems because employees never know what they are supposed to do, and the manager will not provide the vital details to ensure success.

Why Improve Your Company Culture?

It should be clear why improving the company culture can make a significant difference to any business, regardless of its size. These points will highlight the importance of a better company culture for your business and profits.

Better Engagement

Employee engagement is a crucial aspect of any successful company yet too many managers assume that the old ways of doing things are still effective. While a pat on the back or a trophy for Employee of the Month seems like a good idea, it will not motivate employees to do better. Instead, consider the employee experienceand how this will reflect on your business. The more your team feels appreciated and recognized for their (often mammoth) efforts, the easier it will be to keep your team on task and satisfied with the company, which also reduces regular turnover to increase workplace chemistry.

Satisfied Customers

A better office or workplace culture does not just impact your employees; it can also make your clients or customers happier to visit and interact with. You might not notice, but a toxic environment can affect your customers’ enjoymentof frequenting your store or workplace. They will feel the tense atmosphere and may even see something happening that will put them off working with your business. If you want to maintain a steady and loyal stream of satisfied customers, it’s always worth improving your culture so they can enjoy the positive vibes if and when they visit.

Improved Efficiency

Likewise, a happy office is a more productive office, and a more productive office is likely to increase profits quicker. Your employees should not be afraid to make mistakes, and your office door should always be open to help with any concerns or uncertainties about projects or client promises. The more comfortable your team feels, the easier it will be to raise questions, work together, and find solutions without substantial delays. This can significantly improve your business operations and ensures the workday is less stressful since you should not feel rushed to get to the end of a project thanks to improved efficiency.

Supporting Goals

A better company culture puts everyone on the same page. They should know what they want and need to achieve, and everyone should work closely with each other to ensure these goals are met. It doesn’t matter if you are the owner of the company or a new employee; everything you do should be to benefit the business and help it achieve the goals set out for the week, month, and year. This focus on accountability will make your team more likely to go above and beyond for one another because they know their coworkers would do the same in a heartbeat.

Profit Begets Profit

Since profitability should be the most important aspect of any business (when looking at it in a strictly financial sense), you should look for any way to increase your profits which will then compound into even greater profits. Your company culture plays a substantial role in this, as it enables you to build on what you have already and improve existing operations to make them more successful and more appealing to your clients or customers. If you have done everything right beforehand, you will find it suddenly becomes much easier to earn more money thanks to the improved culture.

Better Performance

Additionally, as your business performs better, the more it has the chance to grow. The more you can grow your business, the broader it will reach, and this helps you increase your influence within the industry. Now that your business has stability, it can start looking at other ways to improve and make the entire process more efficient and enjoyable. This could involve upgrading systems or introducing new technology that makes employees’ lives easier. Or, you could consider using this money to reward employees with better pay or bonuses, which may motivate them and encourage them to stick around.

Strong Reputation

No one wants to work for a toxic company, and with more and more unhappy employees airing grievances and putting bad bosses on blast when they leave, you will find a lot of benefits from improving your company culture. A focus on the work-life balance among other essentials can improve your reputation and make your company one that people want to work for. In doing so, you can attract better employees to help contribute to business growth and reach your company’s goals much quicker than you may have anticipated.

Team Building

Since better company culture ensures you can retain more employees, you will also find that team building becomes a lot more effective. Some employees may wonder whether it’s worth getting to know each other considering the high turnover of a bad office\workplace, but a better culture means that they can build lasting relationships and begin to care for one another. The more your employees care about each other, the more likely it is that they will back one another up when needed. They will be happy to help out with projects or offer advice, and this will shine through to any new hires, clients, and investors.


Improving your workplace culture can have a myriad of benefits. Not only will it make your office (whether in-person or remote) a more enjoyable place to be, but it will also bring your team together. If your workplace generates positivity, you will see it reflected in the profits as your business reaches the next level and manages to go even further.
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Darren Mcpherson

Darren Mcpherson

Darren Mcpherson brings over 9 years of experience in politics, business, investing, and banking to his writing. He holds degrees in Economics from Harvard University and Political Science from Stanford University, with certifications in Financial Management. Renowned for his insightful analyses and strategic awareness, Darren has contributed to reputable publications and served in advisory roles for influential entities. Outside the boardroom, Darren enjoys playing chess, collecting rare books, attending technology conferences, and mentoring young professionals. His dedication to excellence and understanding of global finance and governance make him a trusted and authoritative voice in his field.
Daniel James

Daniel James

Daniel James is a distinguished gerontologist, author, and professional coach known for his expertise in health and aging. With degrees from Georgia Tech and UCLA, including a diploma in gerontology from the University of Boston, Daniel brings over 15 years of experience to his work. His credentials also include a Professional Coaching Certification, enhancing his credibility in personal development and well-being. In his free time, Daniel is an avid runner and tennis player, passionate about fitness, wellness, and staying active. His commitment to improving lives through health education and coaching reflects his passion and dedication in both professional and personal endeavors.
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