Culture is the Top Line That Leads to the Bottom Line

When faced with decision-making in business we commonly tend to ask ourselves how our decisions will contribute to the bottom line. This is how we've been conditioned to think and behave in business -- after all profit is the fuel to the engine of subsistence and progress. Without profit we fear we will fizzle out and become irrelevant. An even deeper concern is for our very survival.

Then we discover the research, opinion articles and books by leading experts telling us about the importance of culture; that it relates to productivity, efficiency, employee engagement, turnover, customer service, communication and even innovation. We are further reminded with the frequently repeated Peter Drucker quote, "Culture eats strategy for breakfast", that it's paramount to success.

The culture experts tell us to focus on those things that affect the way people feel about their work and their company, which leads to improved efficiency, engagement, customer service, and so on. And yet, focusing on those areas of a company that improve the way people feel seems counterintuitive to what we've been taught about how to do business, as those areas of focus tend to lack measurability, and without measurability we have a hard time justifying them in financial terms.

What Is Culture Really?
Culture has been defined in a myriad of ways. It's been said that it represents the collective value system of an organization or its beliefs or personality. It's been described as the way things get done or the shared narrative of an organization. Truly, culture is many things and perhaps all these definitions are correct, and more. In a simplistic sense we could say that culture is the unseen human element that shapes how everything is done. Or even more simply stated we can say, culture is the human element.

The Human Element
Since the emergence of the industrial revolution we've measured, arranged, quantified, and analyzed every aspect of how things get done in organizations. No organization of a particular scale would dare consider not having a CFO and a finance department to track and quantify every last piece of measurable data. This is, of course, considered prudent and necessary.

And in present time we are being told that culture is important, that it determines how things get done, and that things consistently improve in a company with a strong and vibrant culture. But how do we affect culture when it has to do with fuzzy stuff like how employees feel, or shared values systems, or having a deeper sense of purpose? And more to the point, how do we quantify the value of focusing on these intangible attributes?

Culture Is The Top Line
Culture work teaches us that the top line of a company is the human element, which is the beginning point that leads to the bottom line, as it determines how we do things, how we convey our vision, how we treat our employees, how we work with suppliers and customers, how we innovate, and how we succeed.

The truth is that everything we do has a human element -- every product we make or service we render has been conceived, designed, prototyped, refined, communicated, promoted, packaged and delivered by humans. Even products manufactured on robotic assembly lines were conceived and designed by humans, and the machines that made them were designed and built by humans serving human needs.

In dystopian futuristic movies like The Terminator and The Matrix in which the world has been taken over by the machines, there is a subtext to these stories that illustrates how much is missing in these worlds without the human need for connection and purpose.

The fuzzy logic of quantum mechanics illustrates that while the physical universe appears highly ordered, in the tiniest quadrants of our universe (the world of sub-atomic particles) things don't seem to behave the way we think they should. From quantum physics we've learned that the mere observation of a sub-atomic particle can affect its behavior, demonstrating that even in our physical Universe the human element is important.

The Bottom Line
While many business leaders tend to think and feel that culture is important, the common impulse is to assess that culture will have to wait until more pressing priorities are under control. The truth is that there will always be current priorities that are more easily quantifiable in the near term than putting effort into culture.

The bottom line is what we get when we've processed everything through the top of the funnel -- coalescing ideas, values, people, and things to produce a net result. The net result is the bottom line.

Seth Godin wrote ^[1]:

Human beings thrive on the quest for total control, for a day that feels like it's up to us. That quest is compelling, but it turns out that we're in danger of building a world where the fruitless search for control is undermining the future we hope to create.

This is exactly on point. The quest for control over the bottom line is a quest for control over the quantifiable. "The future we hope to create" will come from questing in the realm of the human element.

How vs. How Much
Quantification is an awesome tool for decision-making, but it leaves out the human element. Quantification looks at how much. The human element looks at how: how do we feel, communicate, interact and relate. These are the fuzzy elements that we can't put numbers to, and since the human element seems fuzzy and unpredictable, we tend to strive for those aspects of an organization that are ordered, predictable, and measurable.

The top line leads us to the bottom line, because how we do things is equally as important as what we do. Even though we may be unsure of what to do to improve culture, by focusing on the human element -- the mere attention to how we do things, how we feel, the tone of an organization, its style, and intangible qualities -- we are leading ourselves to a much healthier bottom line.

The first step to strong and vibrant culture is to recognize and embrace the human element as the starting point that leads to the bottom line.

Glenn Geffcken is the co-founder of Balanced Is ^[2], a company with a focus on culture and identity, working at the intersection of purpose, connection and innovation, to help companies and individuals realize their greatest potential. Glenn is the author of Shift: Indigenous Principles for Corporate Change ^[3] and writes a bi-weekly blog, Heart & Mind ^[4] about bridging the gap between the heart and the mind in work and life.