Connected culture is a system designed to empower business value creation. Connected culture occurs when an engaged group of people work toward a common purpose.

Value is created through the connection of people within the business. While profitability is important, it is not the goal. It is a result. The goal of connected culture is a socially responsible workplace that offers a great environment for employees and employers alike.

A Theory of Value

Connected culture is a theory of value that understands value as a holistic concept. When we analyze value, we look at it in both quantitative and qualitative terms.

Click to view an article published in the BMO Global Asset Management newsletter on the theory of value presented in our book Hire Your Buyer.

 Financial Focus – Quantitative Value

Quantitative value is based on measurements. It uses numbers and mathematical analyses. Financial numbers such as cash flow, industry averages, and comparables are examples of quantitative value.

Most investors and valuators use a quantitative analysis when assessing the value of a business. Market valuations of a business’s hypothetical price range are heavily weighted to quantitative factors in an attempt to be objective.

People Focus – Qualitative Value

Qualitative value is based on intangible factors like trust, engagement, and innovation. You cannot count these qualities the same way you can count how many times a person swings a hammer. As a result, this type of value is subjective.

Most investors and valuators are skeptical of qualitative factors because these factors cannot be measured directly. To many people, lack of measurement indicates speculation. They are more comfortable with the tangible.

At Connected Culture, we believe that operating a business that weights quantitative factors heavily, without paying attention to people issues, is on a path to internal strife and dispute. At the same time, we understand that an over-reliance on qualitative factors, without attention to finance, leads to comfort and complacency.

This chart demonstrates how a connected culture purposefully integrates both:

connected culture chart

The Business Case

While trust and engagement cannot be measured directly, it is possible to assess the impact of these intangibles on the success of a business.

The research firm Great Place to Work conducts millions of annual surveys on workplace trust and engagement for public companies. In 2017 it reported that the best companies, ranked by employee surveys on trust and engagement, outperformed the rest of the stock market by a 3x return.

Experience shows that small private companies with good business foundations can reasonably expect 400–1,000% increases in value over a five-year period by developing a connected culture.

People working in a connected culture provide discretionary effort. They work on the business as they work in it. A manager who only counts how many times a person swings a hammer will miss the human dimension of mindfulness and purpose available to everyone. Once the human dimension is engaged, the culture starts to connect and the effect is exponential.

It is not about working harder, it is about focusing on what creates value and working smarter.

best companies provide nearly 3x return

If you want to learn more about developing a connected culture for your business, then get in touch.

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