Who hasn’t seen the video of a passenger being brutally dragged off an over-booked United Airlines flight on April 9th? The incident became a public relations disaster, and has adversely affected both United’s stock price and revenue and cost the CEO a promotion to chairman. In contrast, American Airlines had a similar customer service snafu last weekend regarding a mother of twin toddlers who tried to bring a stroller onto the airplane. The company moved swiftly to right the situation and avoid any negative consequences.
The contrasting tales show how culture affects the bottom line.
The fact is, there will be customer service snafus, even in the best companies. Human beings work in companies, and human beings are imperfect and make mistakes from time to time. The proof of an organization’s culture is in the way it recovers from the service failure. In the customer service business, it’s called “service recovery.” How you recover from a service failure reflects the values and culture of the business.
Company culture is trending news in all industries. Recently, both Uber and United Airlines have been cited in the news as having culture problems. Why is culture so important? The bottom line is that culture affects a company’s bottom line!
Many studies have proven that a strong, positive company culture produces beneficial financial results. Even exacting academics who cannot bring themselves to proclaim culture as the “cure-all for what ails you” nevertheless admit that it matters. For every CFO who might be skeptical about the benefit of focusing on company culture, here are four impressive research studies that prove that culture affects your financial success:
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